Navigant Research Blog

Denmark Aims for 100% Renewables by 2050

— April 3, 2012

For such a small country, Denmark certainly knows how to do sustainable energy in a big way.  Late last month the Danish Parliament passed the most ambitious renewable energy goal in the world.  By 2050, the country’s entire economy will be powered by renewable energy.  Given Denmark’s reliance on variable wind power, in order to accomplish this goal the smart grid will need to play an increasing role in aggregating and optimizing the country’s energy resources.

Already, Denmark obtains more than 25% of its electricity from wind power.  Under the new commitment from the Danish government, 35% of the country’s energy will come from renewable sources by 2020, with roughly half of that coming from wind power.  It’s important to note that this 100% renewable goal applies to Denmark’s entire energy supply, not just electricity, and therefore also includes heating, all industrial activity, and transportation.

One could clearly argue that Denmark is in a unique position due to its compact size and community-owned wind, combined, heat & power (CHP) and district heating and cooling networks, which provide a cultural ecosystem of support for sustainable energy strategies and stakeholder buy-in.  (One rarely hears of any NIMBY protests against wind power here!) The goal of 100% renewable energy is also matched with specific policies (and funding) attached to specific wind projects both onshore and offshore.

The country will, by necessity, lead the way with smart grid aggregation and optimization networks such as microgrids and virtual power plants (VPPs).  In order to accommodate larger penetrations of renewable energy, the Transmission System Operator (TSO) is redesigning its market dispatch rules accordingly.  Under the current system, only accepts power bids from power producers of at least 10 megawatts (MW) in size, and load forecasts are updated every 15 minutes.  Under the proposed new real-time market being rolled out, there will be no size limit on scheduled resources, and prices will be updated every five minutes, opening up the door to distributed energy resources – including demand response — that can respond quickly to price signals.

The country has laid the foundation for this new aggressive renewable energy policy by moving forward with trend-setting smart grid renewables integration projects rivaled only by Germany in terms of scale and ambition (my next blog post will cover Siemens and VPPs.)  In 2011, – with significant help from Spirae, an innovative software/hardware provider based in Colorado – completed a cutting edge R&D project with major ramifications for renewables integration: a 65MW VPP, commonly referred to as the “Cell Controller Project.”  It consists of distributed wind and CHP units owned by farmers and village heating districts, and will be operated by

This successful R&D experiment set the stage for an even more cutting edge VVP project of similar size (67 MW) that involves PHEV and residential heat pumps, along with wind and CHP on the Island of Bornholm – the European Union’s smart grid-renewable energy smart grid showcase.  Residents there are already receiving bill credits when the grid operator uses the batteries in plug-in hybrid electric vehicles (PHEVs) as short-term storage to help firm up wind power.

Also known as the “Bright Green City” project, this Bornholm VPP is being developed with DONG Energy with a goal of obtaining 76% of its total electricity from renewables by 2025, with 90 MW of wind power is planned to be added to the existing 30 MW in current operation.   An additional 5 MW of distributed solar PV is also on the drawing boards for Bornholm.   PHEVs are a key part of this greening of local infrastructure effort, leading some observers to come up with a new acronym:  an Electric Vehicle VPP or EV-VPP.   In a partnership to be launched in 2012 with the EV battery provider Better Place, DONG Energy hopes to roll out this EV-VPP throughout Europe.


Where the Jobs Will Be

— February 27, 2012

Last month in his State of the Union speech, Barack Obama touted the potential of the clean energy sector as a source of rising employment for the United States.

“We should put more Americans to work building clean energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean energy jobs,” the President said.

Plenty of controversy exists over how many jobs emerging cleantech businesses actually generate. “Congress is holding the fate of more than 40,000 jobs in the clean energy industry in its hands – right now – as they hem, haw, and delay deciding whether to renew critical energy financing provisions such as the Production Tax Credit (PTC) for onshore wind, the ‘1603’ grants that have created jobs in the solar sector, access to the Investment Tax Credit (ITC) for offshore wind projects, and credits for efficient manufacturing, homes, and appliances,” wrote Mary Anne Hitt, director of the Sierra Club’s Beyond Coal Campaign, on Huffington Post last week.

The maps below shed a bit more light on the relationship between jobs and investments in clean energy. The first is the well-known Renewable Energy Map, created in 2009 by the Natural Resources Defense Council:

The interactive map shows existing and planned (as of 2009) projects in wind, solar, biofuel, and geothermal power (the image above shows only wind power). The number of projects has increased significantly since then, while the relative geographic distribution has changed little.

The second map was created by Richard Florida, of The Atlantic, and his colleagues Charlotta Mellander and Zara Matheson. It shows the projected percentage increase in blue collar jobs in the United States from 2010 to 2020.

I am not suggesting a direct relationship here, and the data is so complex as to be open to various interpretations. (Is the increase foreseen in the Detroit area, for instance, dependent on a continued resurgence of the U.S. automaking industry?) And, of course, renewable energy projects tend to go where the wind, solar, and geothermal resources already exist. There is, though, a rough correspondence: the highest blue-collar job growth will be in a line roughly tracking the Eastern Seaboard south to North Carolina, in specific pockets along Florida’s Atlantic coast, the Gulf Coast, and across Texas, in a few scattered areas in the inter-mountain West, particularly in Arizona (a fascinating development with strong implications for both political parties), and in parts of central and northern California. The overlay with renewable energy projects is intriguing enough to suggest that, if you’re going to be looking for a working class job in the next eight years, you might want to go where the clean energy investment is going.


Wind Power Industry Faces Solar-Like Challenges in 2012

— January 27, 2012

The recent announcement by Vestas, the largest manufacturer of utility-scale wind turbines in the world, about a major shake-up at the management level and the loss of 2,300 jobs in Denmark, raises the question of whether wind – like solar photovoltaics (PV) in 2011 – may be entering a major shakeout and downsizing period.

While the growth of wind power is still an astounding success story, there are clouds on the horizon, particularly in the United States. Among the major challenges facing the industry today are record low natural gas prices, which have lowered the price of electricity, making it more difficult for wind to compete in wholesale power markets.

A rush to develop new supplies from shale deposits through the controversial practice of so-called “fracking” raises interesting questions about how we regulate future energy supplies.  In Texas, it is possible to get a permit to drill for natural gas wells in a residential neighborhood within a week, without an environmental permit, and at a total cost of around $3,000. Contrast that streamlined approach – for a technology that has been implicated with polluting drinking water supplies and contributing to air quality concerns, as well as leading to possible lethal explosions – with wind (and solar) technologies.

Where I live, in Marin County just north of San Francisco, the county is imposing a height restriction of 40 feet for any wind turbine located in the western, rural part of the county, which, in effect, is an outright ban, even on small on-site wind turbines.  Why?  There’s just not enough wind at that height to generate power.  Furthermore, local activists successfully filed a suit against NextEra Energy to block the erection of a meteorological tower to measure wind resources for a possible wind project near the town of Tomales, in the northwestern corner of the county.  Since Marin County has set a goal of becoming completely powered by renewable energy over the long term through a community choice aggregation program, this reluctance may seem a tad ironic.

The good news (at least for the wind industry) is that the growing backlash against fracking, and the familiar boom and bust cycle in fossil fuel exploitation, may send prices for natural gas upward again within the next few years.  Innovations and global competition appear to be driving prices for wind and solar down, and that trend will likely continue. How much would natural gas cost if it had to undergo the same kind of environmental scrutiny as wind and solar projects?

Wind power will always face greater opposition than solar PV, though trends toward utility-scale solar PV projects have engendered intense debates over land use.  In this case, wind power may actually have fewer impacts, since turbines have small footprints and allow farmers and ranchers to continue their traditional way of life, whether grazing livestock or growing crops.  Solar arrays, on the other hand, blanket the entire landscape.

The other major challenge facing the wind industry is continued uncertainty around the extension of the production tax credit (PTC), the federal government’s prime vehicle for making wind more cost-competitive with traditional fossil fuel resources.  Vestas has announced it may trim another 1,600 employees here in the U.S. (mainly in Colorado) if the PTC is not passed. At a time of great economic uncertainty, it seems unwise to send mixed signals to the private sector about the U.S. commitment to clean energy.

Given the fracking/natural gas dynamic – and the poisoned political environment in Washington, DC in regards to government support for renewables, the “austerity and delays” scenario in the graph above may be the best current forecast for the future of wind power worldwide.


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