Industry’s Innovation Fund for NTNU Wind Power Developments in Denmark and Norway: A comparison Jørund Buen Department for Interdisciplinary Studies of Culture Norwegian University of Science and Technology (NTNU) “Strategies for Sustainable Energy Technology” Workshop, Trondheim, 20-21 November 2003
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Industry’s Innovation Fund for NTNU Wind Power Developments in Denmark and Norway: A comparison Jørund Buen Department for Interdisciplinary Studies of.
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Industry’s Innovation Fund for NTNU
Wind Power Developments in Denmark and Norway:
A comparison
Jørund Buen
Department for Interdisciplinary Studies of Culture Norwegian University of Science and Technology
(NTNU)
“Strategies for Sustainable Energy Technology”
Workshop, Trondheim, 20-21 November 2003
Industry’s Innovation Fund for NTNU
Outline
• Different development paths
• Why the Danes have had success
• Why they could (have) fail(ed)
Industry’s Innovation Fund for NTNU
Strikingly different development paths
• Then: – Oil embargo (1973) both countries wished to
• Embryonic phase: Small and medium-sized agricultural companies– Rooted in cooperative tradition– Used to produce solid machine– Other countries: space industry, large agricultural
and machine-building companies• Wind business piggy-backed on established
companies’ competence, supplier network and capital base– Vestas– Bonus– Nordtank (NEG Micon)– LM Glasfiber
competition– Negotiations with government– Manufacturer groups for sharing of experiences
• Danish Windturbine Manufacturers’ Association (1978)
• New Renewable Energy Organisation (OVE) (1976)– “Vindtræf” – meetings up to 4 times a year– Exchange of experiences
Industry’s Innovation Fund for NTNU
Why the Danes succeeded2: Adaptation to problem
types
Industry’s Innovation Fund for NTNU
Adaptation to problem types: Wind power’s shifting rationale
• 1975-ca 1990: Provider of energy security– Prevented oil and gas imports through increased
self-sufficiency
• Ca 1990-: Important part of domestic solution to greenhouse gas emissions problem– EU “bubble”: DK to reduce GHGs 21% by 2008-12– DK coal-based economy very GHG-intensive– Denmark now (almost) self-sufficient in oil and
gas– Can also be exported to developing countries
through project-based Kyoto Mechanisms
Industry’s Innovation Fund for NTNU
Why the Danes succeeded3: Matching policies and
measures
Industry’s Innovation Fund for NTNU
Matching policies and measures (1)
• P&Ms adapted to industrial development phase
• Embryonic: Strong government involvement – Production subsidies– Installation subsidies– Direct government investment: Dansk
Vindteknik
Industry’s Innovation Fund for NTNU
Matching policies and measures (2)
• Consolidation of industry: government support changed– Guaranteed grid connection and fixed
payment– Production and installation subsidies
gradually reduced to zero (1982-9)– Government withdrew from direct
– All efforts directed at one (strongly policy-driven) export market
– 1987: DK +50% of a rapidly growing market covering 90% of global market activity
– Shrank rapidly after tax rebate removed 31 Dec 1985
• Today: Wind power still “political product” – market niche = politically driven markets worldwide– Germany, Spain, India, China, US
Industry’s Innovation Fund for NTNU
…and why the Danes could just as well have failed
Industry’s Innovation Fund for NTNU
Why the Danes could have failed (1)
• 1976-1979: Utilities, Ministry of Trade wanted R&D on large-scale wind power– Utilities, established industrial actors,
employers’ and workers’ organisations uninterested in small-scale wind
• 1979-1989: Large-scale R,D&D programme in parallel with small-scale R&D + commercialisation– Costly failure (but much to learn from)
Industry’s Innovation Fund for NTNU
Why the Danes could have failed (2)
• Wind power was a political product, and no hedge was available; 1985: Annus horribilis– California scrapped tax rebate– Demand from cooperatives weakened because1) Danish production subsidy reduced overnight2) Secret 100MW agreement between utilities
and govt3) Private turbine ownership restricted
financially, geographically)– State export subsidies removed overnight
(1986-7)
Industry’s Innovation Fund for NTNU
Why the Danes could have failed (3)
• MW agreements 1985- central government and utilities common
interest in large-scale, concentrated wind power development (on- and, later, offshore wind farms)
local (government) protests against wind power development
+2 year delays in implementation Coordinated planning process initiated, but
brought uncertainty and reduced demand at first Could have broken the neck of companies if