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

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Presentation on theme: "A step-change in wind power deployment - from national models to international convergence? Joseph Szarka University of Bath."— Presentation transcript:

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

2 Published by Palgrave in 2007 Five nation comparison: Denmark, France, Germany, Spain, UK A technology whose viability and deployment is highly dependent on (national) framework conditions: - operational; - economic; - institutional; - social.

3 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 structures Consequences: specific national and international development models alternative development paths

4 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)

5 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.

6 The step-change in wind power deployment involves: a change in scale – of installations a change in industrial structures – globalisation a change in public policies – but to what ends? From small installations To large wind farms To offshore.

7 The UK – a prime example of upscaling and internationalisation

8 Size of wind farms in UK numbercapacityaverage MWcapacity Operational wind farms (1991-2007)156229815 Under construction39137235 Consented114455040 Projects in planning222984044 Grand total5311806034 (Total offshore)(5000) Source: BWEA data, January 2008

9 Large wind farms in UK (BWEA data, January 2008) 50-89MW 90- 199MW over 200MWTotal as % large farmscapacity of category MW 1991-2002000000% 2003-2007640726229831% Under construction241808137259% Consented3653260455072% Projects in planning258116792984069% Grand total18060

10 Upscaling and internationalisation in continental Europe

11 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 hours Source: DWIA, 2006 Danish model stagnates: major growth is offshore

12 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.

13 2.Butendiek OSB Offshore Bürger WP 240 Megawatt 2.Butendiek OSB Offshore Bürger WP 240 Megawatt 1 9 2 3 4 5 6 7 8 10 11 12 13 14 15 16 19 18 17 20 21 22 23 24 2526 27 28 29 30 1. Sandbank24 Sandbank24&Projekt GmbH 420 (4720) Megawatt 1. Sandbank24 Sandbank24&Projekt GmbH 420 (4720) Megawatt 3.Amrumbank Winkra 400 (1250) Megawatt 3.Amrumbank Winkra 400 (1250) Megawatt 4.Amrumbank West Rennert Offshore, EON 400 Megawatt 4.Amrumbank West Rennert Offshore, EON 400 Megawatt 8.Borkum West Prokon Nord 60 (1040) Megawatt 8.Borkum West Prokon Nord 60 (1040) Megawatt 7.Borkum Riffgrund West Plambeck 231 (746) Megawatt 7.Borkum Riffgrund West Plambeck 231 (746) Megawatt 6.Borkum Riffgrund Energiekontor 280 (1800) Megawatt 6.Borkum Riffgrund Energiekontor 280 (1800) Megawatt Wilhelmshaven Winkra, Enercon 4.5 Megawatt Wilhelmshaven Winkra, Enercon 4.5 Megawatt genehmigt geplant Esbjerg (DK) Husum Bremerhaven Cuxhaven Wilhelms- haven BWE, 2005

14 140 (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 1 2 3 4 5 6 7 8 genehmigt geplant 9 10 Lübeck Rostock Kiel BWE, 2005

15 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)

16 So what does the future hold? Source: VDMA (2006)

17 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.

18 Linking scale of wind power deployment with investment and ownership models ScaleSmallMediumLarge / Very large CategoryStandalone or clumps ClustersWind farms Wind power stations Investment motivation Personal needs; hobbyists; green ideals. Personal investment; sustainability enthusiasts; green ideals. Business investment; energy diversification; emission caps; profits. InvestorsIndividualCo-operative / community Utilities and other large companies / consortia Finance and ownership LocalLocal and nationalNational and international Industry modelAlternative energy; decentralisation; soft path Alternative energy; embedded generation; soft path Bulk power; hard path.

19 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.

20 Ways forward for the seminar series Our 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 acceptability And make recommendations for best practice in each area.

21 Thank you for your time and attention! J.P.Szarka@bath.ac.uk


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