News www.windpower.org


Danish Wind Energy in 1999:
Danish Wind Turbine Manufacturing Sextuples in Five Years

The Danish wind turbine industry (including foreign subsidiaries) sold 2,241 MW (megawatt generating power) in 1999 compared to 1,216 MW the year before.1)
Manufacturing has increased sixfold in the course of five years, corresponding to an annual growth rate of 44% per year. The number of wind turbines produced reached the second largest number in the history of the Danish industry, 2,814 machines. (In 1985 3,812 machines were sold, but these machines were small, with a total generating power of only one tenth of the modern machines).
The Danish Wind Turbine Manufacturers Association expects a growth in industrial activity of some 10% in the year 2000, and slightly stronger growth in 2001.2)
The growth in 1999 is partly caused by a boom in the US market due to the temporary lapse of the federal production tax credit (PTC) for renewables which caused a buying spree before closing time. A similar situation occurred in Germany where uncertainty about the future payments regime for wind caused a dramatic temporary increase in demand. Sales in Germany are expected to decline this year and sales in the US market will be close to zero.

50% World Market Share
The Danish turbine manufacturers had a global market share of the wind turbine market of approximately 50% in 1999, and close to 65% if foreign joint ventures (associated companies) are included.3) These companies sold 534 MW in Spain and Italy. Thus Danish wind turbine technology accounted for a total of 2,775 MW gene-rating capacity out of a world market of 4,000 MW in 1999. This made 1999 the first year with more new capacity invested in wind energy world wide than in nuclear energy (approx. 3,000 MW). The most important markets were Germany, the United States, Spain and Denmark.

Largest Employment Increase Ever
Employment in the Danish turbine factories increased by more than 1,000 employees, from 2,821 to 3,828. To this should be added some 10,000 jobs in component manufacturing, e.g. LM Glasfiber A/S employs approximately 2,000 people in rotor blade manufacturing.

Turnover of 1.7 Billion Euro in 1999
The turnover of the Danish turbine manufacturers increased from 7.7 to 12.5 billion DKK, equivalent to a growth from 1 billion euro to 1.7 billion euro. To this should be added an estimated 1 billion DKK of exports by component suppliers to non-Danish manufacturers.
17% of the turbines were sold on the Danish market in 1999. The Danish wind turbine industry is now about three times the size of the shipbuilding industry, and employs more people than the Danish electricity supply industry (generation, transmission and distribution included).

Average Wind Turbine Size Increasing
From 1998 to 1999 the average wind turbine size has increased from 701 to 807 kW in export markets and from 689 to 751 kW in the Danish market. The German market in particular tends to demand machines above the 1 MW size (more than 60 m rotor diameter).

New Record in Denmark
Danish sales increased once again in 1999 to 516 wind turbines with a total power of 388 MW, against 460 turbines with 317 MW of total power the year before.
Out of the 516 wind turbines sold in 1999, 364 (275 MW) were turbines bought by individuals, 66 (47 MW) were bought by co-operatives while 86 (66 MW) were bought by power companies in accordance with an executive order from the Ministry of Environment and Energy.

13% Wind in the Danish Electricity System
Wind energy is expected to cover 13% of Danish electricity consumption in 2000, if this turns out to be an average wind year. Danish energy plans say that 20% of Danish electricity consumption should come from renewables by the end of 2002. Approximately 15 to 16% may be expected to come from wind energy. By 2030 50% of Danish electricity consumption should come from renewables, in particular 4,000 MW of offshore wind power.
86% of the electricity from wind turbines in Denmark comes from privately owned wind turbines (co-operatives or individually owned) and 14% comes from power company owned turbines.
There were 5,620 wind turbines in Denmark at the end of 1999 totalling 1,771 MW installed capacity. More than two thirds of the wind electricity in Denmark comes from the one third of the wind turbines erected during the past four years.

Poorer Sites
The statistics from the Danish Wind Turbine Manufacturers Association show that the average electricity production for the wind turbines installed during the past three years in Denmark has been declining - even when adjusted to a normal wind year. Kilowatt hours per square metre rotor area is normally used to express wind turbine productivity. Historically, the productivity of wind turbines in Denmark has improved by some 5% per annum. The decline for the wind turbines erected during the past three years is solely due to poorer siting.

Boom-Crash Policy in Denmark
Year 2000 is expected to be as good a year on the Danish market as 1999, since electricity from turbines contracted before 1 January 2000 are paid a tariff based on a temporary set of regulations negotiated in connection with the Danish Electricity Reform Bill from March 1999. On the other hand, the Danish market has crashed completely thereafter, and not a single turbine has been contracted in 2000 for delivery in Denmark in either 2000 or 2001.
This is due to the fact that there is no EU-approved payment regulation for electricity from new wind turbines in Denmark. The EU Commission approval may be given by 1 January 2001 at the earliest, but there are neither any regulations for - nor any usable analysis of - the future (green certificate) payments system for wind energy in Denmark. Under these circumstances no financing is available for investing in wind energy in Denmark. In this connection it is immaterial that the Government has recently revised its ownership rules for wind turbines and removed the discrimination against owners outside the local municipalities, since there are only buyers for shares in wind turbines which were contracted in 1999. The Ministry of Environment and Energy has not yet issued new rules for replacement of old, poorly sited wind turbines, as promised in the Electricity Refom Bill of March 1999.

The End of Wind Co-operatives?
Even though Danish wind turbine co-operatives had a comeback in 1999 and more turbines will be erected by co-operatives in 2000, the Danish Wind Turbine Manufacturers Association foresees that the Danish market will be taken over by developers and institutional investors in the future. This is not due to the abolition of Danish ownership restrictions mentioned above, but due to new extremely complex financing models for wind turbines with futures contracts, financial options and performance bonds. These forms of advanced financial engineering will be necessary in order to make the new green market for electricity from renewables operational. This will be the most complex support scheme for renewables in the world. The industry believes that there will be large transactions costs and a lack of transparency for small investors, so that the economies of scale for international investors will gradually erode local ownership of wind turbines in Denmark.

Activity and Employment in 2000-2001
Employment in the wind turbine industry is expected to increase slightly in 2000 due to a sales increase of 10-20% on the world market. The majority of the growth will take place in foreign subsidiaries of Danish companies or in associated companies.
For 2001, the Danish Wind Turbine Manufacturers Association foresees a decline in employment in the Danish wind turbine factories of approximately 25% (1,000 jobs) plus an unknown number of jobs with component manufacturers, if the Danish market comes to a halt in 2001. The association expects Danish sales of 400 MW in 2000 out of total domestic manufacturing of some 1,600 MW.
Depending upon whether the tender for the first large Danish offshore wind park of approx. 150 MW (of which half is expected to be manufactured in 2001) is won by a Danish producer, the drop in employment could be somewhat smaller. The effect on domestic employment may also be softened by a temporary renaissance of the U.S. market. Danish turbine manufacturers have already signed a number of option agreements in order to ensure installation of wind turbines before the present PTC (mentioned above) expires at the end of 2001. The forecast for 2000 includes future deliveries for the US market in 2001.

__________
1) The official statistics from the Danish Wind Turbine Manufacturers Association differ slightly from the figures from BTM Consult ApS, since approximately 330 MW for the USA and Canada are accounted for in 1999 by the manufacturers, while they are included in the 1998 figures from BTM. The difference in method is due to the fact that BTM accounts for deliveries to final installation while the industry association calculates the figures according to the principles used by manufacturers.
2) Due to the fact that approx. 330 MW from 1998 are included in our 1999 figures, our future statistics for year 2000 may exhibit a slight decline in sales, despite a quite real 10% growth.
3) These percentages which may be calculated from our figures overstate the Danish market share by approx. 5 percentage points because of the 330 MW phenomenon explained in footnotes 1) and 2). The percentages given in the text are more accurate.

Home

 

News

| Home |
© Copyright 2000 Danish Wind Turbine Manufacturers Association
Updated 6 August 2000
http://www.windpower.org/news/stat1999.htm