Concluding remarks
The ambitious goal of Denmark is to double renewable energy consumption to 30% in 2025. With constant energy consumption this results in 4% per year growth in renewable energy consumption.
At the same time the government aims to reduce the overall consumption of energy by 1.4% annually from 2010. This is highly ambitious compared with the trend from 1980 to now, where energy consumption has been almost constant. The government’s plan translates into a net growth in the renewable energy sector of 2.6% yearly for the period. Based on past evidence, it is unlikely that this can be implemented without prolonging the subsidies.
Applying the experiences from Denmark
Denmark has been a first-mover in the wind industry for over ten years, and its leading companies have been able to maintain a very strong global position. This has been a consequence of a concerted policy to increase the share of wind in Danish electricity generation such that Denmark now generates the equivalent of almost 20% of the electricity it consumes using wind turbines. It has been a policy only made possible through substantial subsidies of around 2 billion DKK yearly ($300 million) supporting the wind turbine owners. This indirect subsidy has in turn generated the demand for wind turbines from the manufacturers. Exactly how the subsidies have been shared between land, wind turbine owners, labor, capital and shareholders is opaque, but it is fair to assess that no Danish wind industry would exist if it had to compete on market terms.
The labor force in the US is 155 million in 2008 (est.). The present number of those employed in the US wind industries is 85,000 making up 0.05% of the US workforce (in Denmark the wind industry employs 20 times this number). Obama’s stated ambition to increase the employment in the wind industry to 250,000 may be achievable if Denmark’s policy of high level of subsidies is followed. However, a central issue is how this is going to be financed, and furthermore how 20% wind electricity is to be integrated into the existing energy system. Finally, it should also be considered that the US electricity consumption per capita is almost twice the consumption in Denmark, so wind intensity would roughly have to be twice the intensity of Denmark. The proposal from President Obama does not explicitly deal with these difficulties and does not appear well documented.
As mentioned above, the Danish wind industry is a strong export industry, and this makes a direct comparison with Obama’s plan difficult with regard to actual job creation in the wind industry. It seems highly unlikely that large country’s wind industry such as the US – having a population of more than 50 times the population of Denmark – would be able to replicate the Danish share of exports of wind turbine technology. In that way a US expansion is expected to be predominantly domestic, and at the same time the industry is probably going to face foreign competition from companies such as Vestas, Siemens and new low cost producers in countries like India.
Based on the Danish experiences with wind power, subsidies to wind need to be significant or corresponding taxes on carbon-based electricity need to be increased substantially. The Danish experience also suggests that a strong US wind expansion would not benefit the overall economy. It would entail substantial costs to the consumer and industry, and only to a lesser degree benefit a small part of the economy, namely wind turbine owners, wind shareholders and those employed in the sector.
01.09.2009 - 
