Danish Wind Energy Co-operatives
Part 2

The Wind Turbine Owners, Parliament (Folketing), and the Public Authorities

A majority in the Danish Parliament consisting of the "Left Wing Socialists" and the centre parties supported the development of wind power. Otherwise it could not have been done. In addition to their interest in the environment, they realised that there was a potential for job creation and export possibilities that would bring foreign exchange to the country.
One could believe that once the legislative assembly of a country had given the "green light", then one could just get going, helped on the way by public authorities and administrations. But it would never be like that in Denmark.
The Woodland and Nature Administration of the Ministry of the Environment are looking after their own interests - it often means that they throw obstacles in the way of the development of windpower, but that doesn't seem to worry them.
The Customs and Tax Administrations maintain their rules severely with the consequence that this often means that it is difficult, or even impossible, to adjust to something new like wind turbines - but that doesn't seem to worry them either.
County Councils and Borough Councils who have the decisive word in the planning process effectively determine politically whether a majority does like wind turbines or not and do not care whether that creates obstacles for the development of windpower.
The Nature Conservation Board which is the highest authority to which citizens can appeal, only represents attitudes which safeguard provisions for animal life and the value of "delightfulness". The result is that the wind turbines are doomed almost every time, and they don't care.
In short, not a single public authority will lift a finger to support the development of windpower. They only do what they are being pressed to do by the so-called "green majority" in Parliament. They have not been able to stop development but they have delayed it and they have made it a tough fight for DV and the turbine owners to get the turbines up and running.

Planning - A Two-Edged Sword
The resistance has not diminished over the years, and within the last few years, a new effective weapon against the wind turbines has been introduced - Planning.
You simply make a tight plan of the whole country: borough after borough. You involve everyone who, in any way, might have anything against wind turbines: nature conservation people, ornithologists, sportsmen like hunters and anglers, or whatever. All point out areas where they feel there should be no wind turbines.
The Woodland and Nature Administration demand a free zone of 3 km. from all coast lines. (Denmark has a 7.000 km. coastline which will have the effect of deducting 21.000 square kilometres from the total area of Denmark of 44.000 square kilometres)
When in addition to that you deduct towns, woodlands, lakes and preservation areas, then everyone can see there will not be many areas left where you can put up wind turbines.

Restriction on Ownership
Due to the resistance that has always been in the public administration - not least within power stations companies and in part of the local population - to the establishment of wind turbines, Parliament and Ministers of Energy have, over the years, felt forced to tighten the conditions.

Residency Criterion
In the late 1970s when the development started, it was possible to erect turbines as big as you wanted to or were able to. The only limitation was that all members of the guild should live within the same electricity supply area - taking into consideration the accounts are control, all members had to live within a distance of no more that 3 km. form the turbine. This was Called the criterion of residence. The idea was - according to the theory - that it was right that if anyone in the local area suffered any inconvenience, they should also be the ones that should have the advantages.
Well-to-do people of the cities should not be allowed to invest in wind turbines and have the advantage of receiving cheaper electricity without being affected by the problems at the wind turbine sites. That also fits well into the ideology of the co-operative idea that you establish your enterprise in the area where you live and among the people with whom you share your daily life, for good or bad.

Consumption Criterion
In the middle of the 1980s, the rule was adapted so that guild members now should live within the same borough + 10 km (There are from 3-4 to 15-20 boroughs in an area of electricity supply). At the same time a consumption criterion was introduced. Every guild members could only have shares in the wind turbine production corresponding to his own consumption + 35 per cent; however, always with a minimum of 6.000 kWh. This was introduced after pressure from the power utilities who wanted to prevent individual, often well-off people from buying big wind turbines and becoming private electricity producers.
The power station people wanted central management of the electricity production and were against the public support of the wind turbines. DV could accept the principle as they represent individual persons and guilds who want to make their own electricity, free from pollution.
In principle DV could accept the criterion of residence as well as the criterion of consumption, we just found them too narrow. We therefore started to work politically in order to have them modified.
This was partly achieved in connection with the new Law for Wind Turbines, which was passed in 1992. Here the criterion of residence was extended so that guild members could live in the same borough or in the neighbouring borough. This was a good thing! It meant that guild members could be collected from 3-5 boroughs.
In the Law for Wind Turbines, the criterion of consumption was also extended so that you could subscribe for electricity from a turbine corresponding to your own consumption + 50 per cent and always 9,000 kWh, irrespective of consumption.
The wind turbine owners' proposal was that you should have the right to a number of kWh which corresponded to the entire energy consumption of the house (heating and hot water included) - but the changes were acceptable as a step in the right direction.

Latest News
In November 1996 new rules came into force, which means that every person now is allowed to have shares in a wind turbine corresponding to 30,000 kWh and that there will be some slackening in the criterion of residence which means, that a person, who works in a firm or owns a house or real estate in a borough, has a right to take part in a wind turbine project there, even if he lives elsewhere.

The Power Companies

The political price for the consumption criterion was that the electrical power utilities had to accept that they would also have to put up wind turbines. It was agreed with the Minister of Energy that the power stations from 1986-1990 should erect 100 megawatts of wind generating capacity. Later in 1990 this was increased by a further 100 megawatt up to 1994.
The power stations and the electricity supply companies have been a decisive factor in the development of windpower. I once thought - before I was involved in wind power - that the supply of electricity was an institution which took care of providing the citizens with a good and secure supply of electricity and nothing else.

Learning about the Politicising Power Companies
I have since learned that the first part was quite right.
The suppliers are interested in providing a good and safe supply of electricity, but with the thought that electricity should be as cheap as possible - without considering for instance where they bought the coal and what effect coal had on the environment.
The second part: that they do not take interest in anything else, was wrong: They are deeply involved in politics.
Little by little, I have come to the conclusion that they are energy merchants. They have been chosen for it. They should not be directed to other duties, the safest possible supply of electricity at the cheapest possible price. This, then, only requires that the political system is aware of that, and gives a clear definition of the limits within which the electricity supply can function. If there are political reasons for not buying coal in, for instance, South Africa, then the politicians can agree it is not allowed to buy coal there. In the same way, the electricity suppliers ought to have instructions to carry through energy saving campaigns, to build wind turbines and arrange for proper connection conditions for wind turbines, etc. It has taken quite some time for this attitude to penetrate the political system.

1992: The Final Breakthrough
The turning point was the law for Wind Turbines which came in the summer of 1992. A watershed year in the short history of windpower. The story behind it was as follows:
The power station companies were involved very early in the development of windpower. They participated in developing the now famous Gedser Turbine which, as mentioned earlier, was inaugurated in 1957 and operated successfully until 1967 when it was stopped in spite of an annual production of 400.000 kWh. per year.
The conclusion was that it was too expensive to produce electricity with wind turbines. Coal and oil were much cheaper, so it was not as profitable. Wind power got on its feet again in the middle of the 1970s, promoted by some very enthusiastic, fiery souls who were just mad enough to break through the massive scepticism and general resistance.
The resistance of the utilities was apparently nourished by the fact that they were opponents to everything that could prevent them form using nuclear power for electricity production. It was nirvana for most electricity people, and it still is for many. Luckily, a broad public debate and a political debate came along and the result was a decisive NO to nuclear power in Denmark, and this was so convincing that the debate stopped completely.

Harassment from Power Companies
The countdown towards the Law for Wind Turbines had already started at the beginning of the 80s. Various electricity suppliers harassed the turbine owners in many different ways. For instance a supply company introduced a surcharge fee for wind turbines in their area.
It was a duty normally imposed on large electricity consuming installations and it was clearly unreasonable on installations like wind turbines which supplied the grid with electricity. DV brought an action before the Committee for Electricity prices, and their views were accepted. The Utility was ordered to cease collecting the surcharge fee. The company refused to do so. Not less than two energy ministers (one after the other) had to urge them to comply with the decision of the Committee before they did so.
Other companies deducted 10 per cent from the normal payment for the electricity produced by a wind turbine, or they considered wind turbines as electricity consuming apparatus with subsequent extra duties. DV appealed both cases and won.
A particularly clever company made up and collected some unreasonably high connection contributions for wind turbines. DV also brought them before the Committee. However they found that they could not intervene - no matter how high the price might be - because it was considered an internal matter.

The Importance of Public Relations
It went on in this way for some years. DV took care of providing as much press coverage as possible (especially through our association's magazine "Natural Energy") of the different cases, which also were brought before the energy minister holding office. Gradually the politicians as well as the public opened their eyes to the fact that the electricity companies used their self-appointed right of determination to carry through their own energy policy apart from government and parliament.
Hard pressed by the political situation and fearing legislation - the worst that could happen from the point of view of the electricity world - DEF, which is an umbrella organisation for all power stations and electricity supply companies in the country, agreed to negotiate a national agreement about connection conditions and settling prices with DV and FDV ( the Danish Wind Turbine Manufacturers Association).

Grid connection and Tariff Conditions:
A Voluntary Agreement - at First
After long and tough negotiations, and under a direct threat of political intervention, the parties - DEF on one side and DV and FDV on the other - entered into a 10 year agreement about conditions for grid connection and settlements.

The main points of the agreement were:

1. That the costs of connection to the grid should be shared, with 1/3 being covered by the State, 1/3 from the turbine owners, and 1/3 from the power companies. (When the State's support for wind turbine projects was dropped a short time later, the payment from the state disappeared, and after that the turbine owners paid 2/3 and the power stations 1/3).
2. That the price paid for the turbine electricity was at the rate of 85 per cent of the electricity price, paid by the larger power users (they paid a slightly lower price than the ordinary users), and at the rate of 70 per cent of this price to turbine owners with turbines in their own installation.

(The reason for the lower price to individual turbine owners was that with you own turbine, you had a bigger chance to use your own electricity, and the Utility was meant only to be available as purchaser of surplus electricity, but it had to be the supplier of total consumption if the wind was not blowing.)
The 15 per cent reduction in price paid to the turbine guilds was payment for use of the public grid.
A co-operation committee was formed between the 3 associations where complaints and problems with interpretation were dealt with. There were a number of cases, some which could not be resolved, but on the whole it all went well.
Not until this decade did the uncertainty start to spread. DEF clearly expressed that when the agreement expired, the wind turbines would have to manage on market conditions.
Many were nervous of going into new projects when they didn't know what would happen after 1994. When the development almost came to a standstill, the energy minister stated that "the parties should negotiate a new agreement which should remain in force right into the next century."
The negotiations were protracted. The electricity companies demanded that the connection costs be doubled and the settling prices reduced to a fixed, but lower, amount. DV and FDV were prepared to accept an idea along these lines, but not that far. To the best of our understanding, this would mean that the development of wind power would come to a halt. Encouraged by the energy minister and others, DEF stuck to their ideas - and DV (the wind power association) and FDV (the manufacturers) on the other hand, broke off negotiations because for the wind power people, it was everything or nothing.

Legislation Replaces Agreement
During some hectic political negotiations where, among other things the right to build 2 new coal power stations was on the agenda, the energy minister was forced by the green majority to introduce a bill for wind turbines which said:

"In the future, the power companies should pay all expenses for reinforcement of the grid in connection with the erection of wind turbines, whereas the expenses for the gird connection all the way to the public grid should be carried by the turbine owners."

"In the future, there should be only one tariff for electricity form wind turbines, i.e., 85 per cent of the price paid by the larger power users." (The 70 per cent settlement disappeared.)

DV produced the proposal to let the electricity supply companies be responsible for and pay for the reinforcement of the grid at the eleventh hour, taking into consideration that this was the only solution that could prevent eternal disagreement or negotiations.
In connection with the law for Wind Turbines, something quite new in the Danish history of electricity was established, i.e., that, in the future, the utilities are under an obligation not only to distribute electricity, but also to collect electricity from decentralised power stations and renewable energy plants.
This was as far as the electricity companies were forced to go and a dent in their political credibility.
I think they "had ordered the music themselves". But they were frustrated and disappointed in the circle of power stations.
At their general meeting in 1992, when the bill was a fact, the chairman of DEF said: "It has created a certain bitterness in electricity companies quarters that the collective electricity consumers still have to be punished economically for the wind turbines of the individualists!"
I do not believe the fight is over yet, but it may be carried on at another level.

The Wind Turbine Industry

Today the relationship with the wind turbine industry is good and we have been able to negotiate together over the past 10 years. This, of course, is due to the fact that from a responsible viewpoint, we do have the same interests, and that is the continuous development of wind power:

WE - because we want to promote the utilisation of energy which is free pollution.

THEY - because they want to produce and sell wind turbines, both domestically and also to foreign countries. An important basis for export is that, as in many other areas, a good and stable home market makes it possible to continuously have one's products tested. In this respect, many Danish wind turbine owners have participated with an interest and a commitment which is of course of benefit to themselves and also to the manufacturers.
Until we came that far, there had, however, been a number of confrontations between DV and some of the first manufacturers on the market. Some wanted to make money quickly, others had products that were simply not good enough. We had many negotiations, especially with some small manufacturers in order to make them improve the quality, but not always with success. In 2 cases we had to expose them publicly in "Naturlig Energi" and in both cases with the result that they shortly after had to cease trading.

The Consumers' Best Weapon: Information
But the most effective means we started to use very early and which contributed decisively to better the conditions was simply information.
Each month "Naturlig Energi" had a list of all turbines with an indication of what they produced and which problems there had been of a technical nature. This definitely had a positive effect on development. The turbine owners themselves had then the opportunity to explain how well or how badly their turbines produced. The manufacturers discovered that their own turbines quickly became either a good or a bad advertisement for their business.
The statistics of production helped to remove the turbine sales people who promised people wonders without the background of a good product placed on a good windy site. In the process of development the statistics also showed the importance of good siting.
Future turbine owners were not the least in importance - in the statistics they could find the information necessary to make the decision on which turbine they would want to buy.
The Public obtained serious information about the potential of wind power. To a high degree this contributed to exploding many of the myths that told how little energy there was to obtain from the wind turbines. Also statistics have clearly reflected the developments that have taken place in the purely technical area.
The statistics have continued through the years and now appear monthly from over 2,400 wind turbines.
If we ignore the trifles and a few rough patches, then the co-operation between the manufacturers and the wind turbine owners is definitely one of the good stories about wind power.

Insurance

It is possible today that at the same time you buy a wind turbine you can have it insured, not only against damage and consequential losses, but also against the risk of the manufacturer going bust within the period of warranty.
The question of insurance was one of the reasons why Danske Vindkraftværker (Danish Wind Turbine Owners Association) was formed. Within the insurance business, wind turbines were a new and unknown phenomenon and, for that matter, neither the manufacturers, the turbine owners or the insurance companies knew how to deal with the matter.
The first and biggest insurance event happened shortly after establishment of the association when one of the biggest wind turbine manufacturers went bankrupt. Approximately 20 turbine owners had bought a turbine from this company. They were all insured with one of the biggest insurance companies in the country, but they refused any help to the turbine owners - referring to the policy which said that the insurance did not come into force until after the expiration of the period of warranty - typically 2 years.
During the period of warranty it was the responsibility of the manufacturer, but he had gone bankrupt. DV was not of the opinion that it could be the responsibility of the turbine owners, as the insurance had been made between the manufacturer and the insurance company.
This came to court and the association pleaded the case for one of the owners as a matter of principle. The case took 5 years and was conducted in 2 courts and it was so expensive that DV (the association) had to raise the subscription in order to be able to pay the costs.
Unfortunately, the association lost the case. The court found that neither the insurance company nor the wind turbine owners had the responsibility. The manufacturers had, but as he was bankrupt the wind turbine owners were left with a problem. The basis of this was that the insurance had been taken out between the manufacturer and the insurance company.
An old Danish proverb says that "A loss makes you rarely rich, but often wise" (like the English one - once bitten, twice shy.)
So now, after dearly bought experience and concentrated work in the insurance committee of the association, we did eventually succeed in establishing some insurance which - cleared of most pitfalls - did live up to the needs of the turbine owners.
Through the years, while insurance premiums went up and down and created much insecurity among the turbine owners, the thought emerged that it might be a good idea to establish the turbine owners' own insurance company. The idea caught on and, in the association, we worked on the problem from the beginning of the 80s, but there were many legal an economic barriers and for a time it looked hopeless.
However, following a renewed appeal form the General Meeting of DV in 1991, Denmark Wind Turbine Insurance was established. It is a completely independent company, owned an run by the turbine owners who have taken out insurance.
DV (the association) participated in this stage of establishment but has now resigned and has only a representative on the board.
In my view, it is one of the really big victories for people power in Danish wind power, and I hope that the company will grow quickly. Until now, interest has been good.
While it is not growing very quickly, this is surely related to the fact that money has to be invested simultaneously within the taking out of insurance. The share capital will be built up over some years by the policy holders.

Statistics on the Danish Wind Turbine Owners Association

September 1996.

- DV has a membership of 2,150 wind turbines.

- The turbine guilds have 54,844 members.

It is a condition that the turbine is enrolled in the association, and you pay for it according to certain rules. On the other hand, the guild itself decides how many members the guild will accept. However, there must be at least one personal membership for each turbine, no matter the ownership.

Subscription paying members of the association:

- Co-operative turbine members/guild members 8,876

- Individual turbine owners 429

- Members without a turbine 456

- Total 9,761

Our association has gone through impressive developments during the 18 years of its existence. From being a small handful of pioneers, it has developed into the only consumer organisation within this field with office and technical as well as administrative personnel who carry out a comprehensive guidance and counselling service for the members - and that is indeed necessary.
I feel, however, that the association and its members are facing a special problem, i.e., that the idealists as a percentage are becoming fewer and fewer. In many new guilds which are being established, the engagement in the environmental aspects of wind power is of less importance and is no longer the principal interest. What makes people today gravitate towards wind turbine projects is, to a higher degree, the prospect of a good investment and a reasonable rate of return.
I am afraid that according to the same scale as the interest for the environment, as the interest in working in a popular co-operative in your local community is decreasing, so will the power of influence and penetration of DV decrease.
Judging it politically, one can nevertheless be very satisfied that so many ordinary citizens have succeeded in investing money and time in the accomplishment of a task which contains a very high degree of ordinary public interest and importance.