Wind power is now by far the cheapest form of new electricity in Denmark, a new analysis from the Danish Energy Agency has found. Further, the agency maintains that new onshore wind farms due to start operating in 2016 will produce power for around half the price of coal and natural gas power stations.
Denmark has been at the forefront of renewable energy development for many years now. The country recently reached the 50% renewable energy generation mark for a single month for the first time. Denmark has a goal of generating 50% of its electricity from wind power by 2020, and 70% of its electricity from renewable sources by 2020. It’s aiming to raise that to a full 100% by 2050. So far, Denmark is well on track to achieve those targets.
The Danish Energy Agency analysis was based on a 4% interest rate, and International Energy Agency fuel and carbon price forecasts. It found that if interest rates increased to 10%, wind power would still be the cheapest form of energy. However, the Danish agency stated that the analysis was not based on a full cost-benefit assessment of different technologies that included an assessment of environmental benefits, taxes or subsidies.
With this in mind, it should be noted that in his very recent book, The Green Bubble, Danish financier and investment banker Per Wimmer, who has been involved in many renewable energy investments, warns that billions are being pumped into subsidies for renewable energy globally, and a large share of the subsidies are going to projects that will never be profitable. He says this is a problem because when that is realized it could cause a crash in the renewable market, with ripples across the wider global economy.