A step-change in wind power deployment - from national models to international convergence? Joseph Szarka University of Bath.

A step-change in wind power deployment -from national models to international convergence?

Joseph SzarkaUniversity of Bath

Published by Palgrave in 2007Five nation comparison:

Denmark, France, Germany, Spain, UK

A technology whose viability and deployment is highly dependent on (national) framework conditions:- operational;- economic;- institutional;- social.

Introduction

Wind power is now a highly diversified phenomenon Key variables: size of turbines size of wind farms support mechanisms investment and ownership patterns industrial structuresConsequences: specific national and international development

models alternative development paths

Development models

1. The ‘Danish model’ - small-scale capitalism and local ownership, with utilities in the background. (Also characterises Germany)

2. The ‘Spanish model’ - large-scale capitalism and national ownership, with utilities in the foreground.

3. The ‘international utility model’ - large-scale capitalism and international ownership of wind farms in UK, USA etc. (Also global firms acquiring controlling interests in the wind power supply chain – GE, Siemens, Areva)

Development paths

Path 1. ‘Bulk power’ based on fossil and nuclear sources - centralised production, large scale facilities, major infrastructures, big corporations.

Path 2. ‘Tailored energy’ - RES & EE - decentralised production, ‘small’ scale facilities, matching of sources with uses, diversified ownership.

The step-change in wind power deployment involves:

a change in scale – of installationsa change in industrial structures –

globalisationa change in public policies – but to

what ends? From small

installations To large wind

farms To offshore.

The UK – a prime example of upscaling and internationalisation

Size of wind farms in UKnumber capacity average

MW capacity

Operational wind farms (1991-2007) 156 2298 15

Under construction 39 1372 35

Consented 114 4550 40

Projects in planning 222 9840 44

Grand total 531 18060 34

(Total offshore) (5000)

Source: BWEA data, January 2008

Large wind farms in UK (BWEA data, January 2008)

50-89MW90-199MW

over 200MW Total Total as %

large farms capacity

of category

MW MW

1991-2002 0 0 0 0 0 0%

2003-2007 6 4 0 726 2298 31%

Under construction 2 4 1 808 1372 59%

Consented 3 6 5 3260 4550 72%

Projects in planning 25 8 11 6792 9840 69%

Grand total 18060

Upscaling and internationalisation in continental Europe

Denmark

Current energy agreement until 2009 – 2 x 200 MW offshore – 350 MW in repowering onshore

Market-based tender system ensure price competition Horns Rev II: 200MW, 69.5 euro/MWh/50.000 hours Nysted II: 200MW, 67 euro/MWh/50.000 hoursSource: DWIA, 2006

‘Danish model’ stagnates: major growth is offshore

Germany

Onshore stagnation predicted some time ago. Clear signs of slowdown in 2007 with

1,667MW added (decline of 25% on 2006). Very ambitious, long-term plans for offshore:

in the range of 41970 - 65922 MW. Capital requirements are immense – large

consortia only.

2.ButendiekOSB Offshore Bürger WP240 Megawatt

2.ButendiekOSB Offshore Bürger WP240 Megawatt

1

9

2

34

5

67

8

10

1112

13

1415

16

19

18

17

20

21 22

23

24

25 26

2728

29

30

1. Sandbank24Sandbank24&Projekt GmbH420 (4720) Megawatt

1. Sandbank24Sandbank24&Projekt GmbH420 (4720) Megawatt

3.AmrumbankWinkra400 (1250) Megawatt

3.AmrumbankWinkra400 (1250) Megawatt

4.Amrumbank WestRennert Offshore, EON400 Megawatt

4.Amrumbank WestRennert Offshore, EON400 Megawatt

8.Borkum WestProkon Nord60 (1040) Megawatt

8.Borkum WestProkon Nord60 (1040) Megawatt

7.Borkum Riffgrund WestPlambeck231 (746) Megawatt

7.Borkum Riffgrund WestPlambeck231 (746) Megawatt

6.Borkum RiffgrundEnergiekontor280 (1800) Megawatt

6.Borkum RiffgrundEnergiekontor280 (1800) Megawatt

WilhelmshavenWinkra, Enercon4.5 Megawatt

WilhelmshavenWinkra, Enercon4.5 Megawatt

MegawattProjektträgerProjektNr

2.700OSB ButendiekWeiße Bank 201024

Riffgat

Offshore North Sea Windpower

Nordergründe

Godewind

Meerwind

Uthland

Dan Tysk

Nördlicher Grund

Ventotec Nord 2

Hochsee Windpark Nordsee

Globaltech 1

Hochsee Windpark HE dreiht

Bard Offshore 1

Austergrund

Deutsche Bucht

Forseti

TGB Nord

Ventotec Nord 1

Jules Verne

H2-20

400 (1.600)Enova29

203 (1.255)Enova28

125 (270)Energiekontor27

320 (896)Plambeck26

265 (819)Windland25

400Geo23

400 (1.500)Geo22

360 (2.195)GEO, ABB, GREP21

150 (600)Arcadis (Dt. Bank, GHF, Vestas)

20

536 (2.286)EOS Offshore19

360 (1.440)Nordsee Windpower18

536EOS Offshore17

400 (1.600)Bard Engeneering16

400 (400)Rennert Offshore15

400 (400)Rennert Offshore14

17.500Prokon Nord13

1.005 (2.550)Ep4 Offshore12

150 (600)Arcadis (Dt. Bank, GHF, Vestas)

11

13.500Plambeck10

400 (4.000)Geo9

genehmigt

geplant

Esbjerg (DK)

Husum

Bremerhaven

Cuxhaven

Wilhelms-haven

BWE, 2005

BWE, 2005

140 (231)Offshore Ostsee Wind AGKriegers Flak10

75 (415)PlambeckBaltsee9

MegawattProjektträgerProjektNr

Pommersche Bucht

Adlergrund

Ventotec Ost 2

Arcona ‚Becken Südost

Baltic 1

Breitling

Wismar

Skz 2000

350 (1.000)Winkra8

280 (720)OWP7

150 (600)Arcadis (Dt. Bank, GHF, Vestas)

6

400 (1.005)AWE (EON, Brockmüller Energy consulting)

5

51Offshore Ostsee Wind AG4

2,3Offshore Ostsee Wind AG3

2Arcadis (Dt. Bank, GHF, Vestas)

2

10 (100)GEO, EON1

12

3

4

5 6 7

8

genehmigt

geplant

9

10

Lübeck

Rostock

Kiel

BWE, 2005

Galicia, Spain Spain

Average size of wind farm: 2006: 21.6MW 2007: 22.5MW Figures distorted by

50MW ceiling for inclusion in the ‘special regime’

Top three operators own 54% of wind farms (8189MW)

Top eleven own 79% ‘Small’ owners in the

minority

Highly concentrated sector (with no offshore)

So what does the future hold?

Source: VDMA (2006)

Convergence towards the ‘international utility model’ The ‘Danish model’ has lost its dynamism in Denmark – offshore

expansion brings the utilities back in. The German pattern is following the same trends – but writ

larger. The ‘Spanish model’ can continue in a largely protected Spanish

market; beyond Spain, the Spanish utilities are key players in the internationalisation of the sector.

The UK ESI is dominated by foreign utilities (EdF, EON, RWE) and Iberdrola has taken over ScottishPower.

In each case, the role of international consortia is becoming preponderant (bringing together manufacturers, utilities, financial institutions and sometimes energy majors).

This is the extended meaning of the expression ‘international utility model’.

Linking scale of wind power deployment

with investment and ownership models Scale Small Medium Large / Very large

Category Standalone or ‘clumps’

Clusters Wind farms Wind power stations

Investment motivation

Personal needs; hobbyists;green ideals.

Personal investment;sustainability enthusiasts;green ideals.

Business investment;energy diversification;emission caps;profits.

Investors Individual Co-operative / community

Utilities and other large companies / consortia

Finance and ownership

Local Local and national National and international

Industry model ‘Alternative energy’;decentralisation;‘soft path’

‘Alternative energy’;embedded generation;‘soft path’

Bulk power;‘hard path’.

Summary and interim conclusions The phenomenon known as wind power has

changed and continues to change as we observe it. A step-change is taking place from Path 2. ‘Tailored

energy’ (community ownership, embedded generation) to Path 1. ‘Bulk power’ (centralised production, large scale facilities, major infrastructures, big corporations)

Discussion point: arguably a need for BOTH paths, but to get both, we need to move from current bias towards Path 1 (especially in the UK) to a genuine commitment to Path 2.

Ways forward for the seminar seriesOur analyses need to connect with those changes – to look to the future, not to the past – to investigate not just path 2, but also path 1– to consider how both paths can co-evolve.

We need to draw the consequences in terms of: Public policies – support mechanisms Market regulation Planning issues Investment, ownership and stake-holding Social acceptabilityAnd make recommendations for best practice in each area.

Thank you for your time and attention!

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