Can the U.S. Become Like Denmark?

The U.S. isn’t going to become like Denmark, which relies on wind power for 22 percent of its energy needs, anytime soon. In that sustainable northern European country, sometimes the total share of wind power even jumps up to 60-70 percent during really windy periods, said Willet Kempton, Professor, Center for Carbon-free Power Integration, University of Delaware, at a green energy forum organized by The Atlantic magazine. After nearly $100 billion in investment over the past few decades, wind power is still just nearing 4 percent of the total U.S. energy system and won’t get up to Denmark’s levels without a dramatic shift in how energy is created and distributed, added Michael O’Sullivan NextEra Energy Resources’ Senior Vice President. NextEra, one of the world’s largest solar and wind energy providers, has alone invested some $20 billion in U.S. wind power to date.

According to Martin Klepper, co-head of the energy and infrastructure projects group at law firm Skadden Arps, federal financing, which has totaled $20 billion, has also helped bring the cost of solar and wind power down. Solar is down from $4 a watt to around $1. There are similar trends for wind.

Just a few states really offer the opportunity for “utility-scale” wind power. The same goes for solar power. That’s because there are only a few states with enough wind and sun to justify the expense of rolling out the expensive transmission lines and systems that can store power when there’s no wind blowing or sun shining.

The price trends are positive so the share of renewables is slowly growing though. The U.S. is now in the process of installing some of the largest solar, solar thermal, and wind power installations anywhere in the world. However, China may be eating the U.S.’s lunch given the rapid way they are scaling up.

O’Sullivan didn’t seem scared by China’s great progress though. He said some 25-30 percent of the enormous wind capacity China has built isn’t “connected to the grid. It’s wind to nowhere.” While China is adding 50-100 mega watts each year, the U.S. has a more “mature regulatory environment.” Comparing China to the Wild Wild West, the U.S. 75 years ago, O’Sullivan said “there’s a simpler regulatory regime there.” Klepper said it’s amazing but in one day a new power plant can receive land, water, air permits and financing, whereas in the U.S. that process can take anywhere from 2-5 years and involve lots of risk. A number of those proposals fail to win approval, meaning all those consulting fees go down to the toilet.

Perhaps the main stumbling block to turning the U.S. into Denmark is the lack of a national smart grid and any hope of one in the near term. A national smart grid could help transmit wind power collected in the central great plain states (the windy core of the country) and quickly move it to other parts of the states. O’Sullivan said the policy and regulatory landscape among the 48 lower states is so different that there are almost “48 different countries.” Within that mess of regulations, there are some 500 utilities that “own some piece of the grid.” As a result, infrastructure investment has to be done state by state or maybe regionally. “The technology is the easy part. It can decades to permit infrastructure. This isn’t like the interstate system.” The policy and regulatory differences between states and lack of cross-border coordination are slowing the U.S. down in a big way.  

While the U.S. federal government and utilities have invested in research and development, it’s a fairly small number: a few billion. O’Sullivan said private equity and capital — see the energy entrepreneurs in Silicon Valley — are really driving the industry. They saw a “positive price signal from the federal government” and have gone for it.

What do all these firms now still need to boost wind production? Certainty that policies won’t change in the future so they can get busy building out these long-range projects. Klepper says the industry needs a federal renewable energy standard (see earlier post) and measures to reduce the cost of financing. Kempton would like policymakers to internalize the “externalities” in energy production, all the health and environmental costs that the public now covers. If the true cost of those were included in the price of energy, the story goes that the true benefits of wind and solar power will become clearer and the cost of these energy sources will be cheaper than dirty coal and oil.

Check out a map of American wind resources and explore the state of wind power generation in the U.S. In the midwest at least, farmers and communities could even benefit from wind farms.

Earlier in the day: Given much of Washington, D.C. now considers natural gas a clean energy, Colorado governor John Hickenlooper, a former geologist and fan of “clean coal,” made a multi-pronged defense of hydraulic fracturing or “fracking” to improve extraction. Saying he’s been doing fracking projects since the early 1980s, he believes these projects can be safe and he knows very few instances where fracking has led to groundwater contamination or earthquakes. Still, earthquakes are “possible” if the fluids cause earth plates to slide. He said that “like any industrial process, it can be done well or sloppily.” To be sure damage doesn’t occur, Colorado has doubled its fines for any damage to the groundwater. “We have a zero tolerance” policy on water pollution. Gas is clearly big business in Colorado.

Image credit: Wind farm mixed in with a real farm in Kansas / Grit

6 thoughts on “Can the U.S. Become Like Denmark?

  1. Brad Evanson 06/19/2012 / 2:08 am

    Frustrating yet interesting. There’s so much happening in many northern European countries (Norway, Denmark, etc.) that could theoretically be applied to the US, but don’t have the proverbial snowball’s chance of happening, and a key lies within this article. One of the main takeaways is the lack of a comprehensive Smart Grid, and (unspoken) the regional and national will to go ahead and implement one. You hear all the arguments about how Big Brother will be watching, yadda yadda yadda, and that’s the key right there. As a nation, we regularly elect government officials that we wouldn’t invite into our homes to babysit our children! We don’t trust them with THAT much authority and power. So goes similar criticism of government-run healthcare, higher taxes for social programs, and so on. Norway has something like a 60% tax rate, and because of the revenue they offer comprehensive healthcare, a year of maternity AND paternity leave for a newborn, 3 months of vacation, and so on. Why? Because their political leaders can be trusted to not screw around with the power they have been bestowed with. The statment “power corrupts and absolute power corrupts absolutely” has been modified in Washington to be “power corrupts and absolute power is actually pretty neat!” If we could figure out how to judge (and ultimately elect) politicians based on their character instead of just their political views, we’d probably be in much better shape as a country.

    • michael_pdx 06/27/2012 / 12:55 pm

      I think your political diagnosis is incoherent. Is it voters’ judgement or the character of politicians? You can’t quite decide, and I think you’ve missed the mark.

      Voters generally approve of their representatives, but hold government in general in low esteem. I would argue this is mostly because we’ve been conditioned by a very well-coordinated and well-funded campaign (nearly 50 years old now!) to run down government as inefficient and corrupt. The fault, dear Brutus, is not in our stars, but in ourselves.

      As Brutus would know, the key question then is “cui bono?” Who benefits from an environment where government’s active ability to solve social problems and improve the commonwealth is in deep disregard? Ain’t a hard question, is it?

      Two overlapping problems are more to the point of this article (although they do relate to your comment about suspicion of power) – fragmented authority, and the loooong, drawnout process of securing entitlements/permits etc here. I can see why a developer would rather work in China!

      If there’s a way forward, it probably demands some real leadership to develop a consensus around the importance of the task and a regulatory framework that is a lot more streamlined and predictable than the one (or rather the dozens) we have now. It really needs something equivalent to the commitment to put Americans on the moon to motivate people to get on board.

  2. Chris 06/19/2012 / 8:56 am

    If it doesn’t make sense, it doesn’t make sense for the USA. Large solar farms are EXTREMELY expensive to build and maintain. Plus the appropriate sites are so few outside of (Arizon, Nevada, New Mexico), how does this alternative energy source make sense?

    Unless Solar technology takes a dramatic leap forward in coming years, we will just be covering our open spaces with super expensive junk, most of which is made in China.

    Same goes for wind power. How many suitable sites are there? These monster beast are huge, an eyesore, bird killers and constantly breaking down due to their mechanical nature.

    I am all for alternative energy, but it has to make dollars and sense. We can’t afford to build pie in the sky projects anymore that have provide low value return for the sake of trying to be green.

    • michael_pdx 06/27/2012 / 1:04 pm

      I may be misreading you, but it sounds like you’ve fallen for the propaganda that is rolling over us against alternative energy. A key indicator: the string of objections “huge, eyesore, bird-killers… constantly breaking down.” I smell a script here.

      Have you been to Europe? A drive through many parts of Germany, Spain – heck even Turkey – will show you that wind power is not some wacky, unproven technology.

      I think you’re jousting at straw men – no one said that “”alt energy is the future, cost/benefit be damned!” Of course it has to pencil. But like any emerging technology, it’s unlikely to pencil on day one, and may require a significant, sustained boost from the public sector to take off.

      Like say… the petrochemical economy received. Ah, didn’t really want to talk about that part, did we!

      And no one said that wind and solar can work everywhere (that would be silly). Clearly there are technical hurdles, and locational issues. But it’s just flat embarrassing that yet again, the US refuses to learn from the established example of other countries that are leaving us behind technologically.

  3. Z. Fechten 06/21/2012 / 3:04 pm

    One big difference between the US and Denmark is the scale of the country. A lot of the power generated in the US is lost to resistance in the transmission lines. It’s also easier for a country to have consistant regulations when that country is the size of one state. It might be more applicable to compare the US to the EU, or Denmark to New Jersey.

    The dollars and sense are coming. Solar’s price per kW has dropped below the retail cost of electricity in many markets, and even below the cost for “peaker” plants that handle demand surges. And given the comparitive lack of moving parts and lower temperatures, I’d be surprised if a solar plant’s operating costs were more than a comparably sized coal plant.

  4. billbad 06/25/2012 / 1:15 pm

    So with no chance of a Smart Grid , what if we set up a pressurized air tank-inside-train car concept. You charge the pressure in the tanks that fill an entire train car at each wind mill , pull it behind existing long trains anywhere in the country. When you get to the city that needs power , you connect it to a generator , SHAZAM , power without the cost of a smart grid or transmission loss.
    p.s. Secretary Chu, mail my check whenever you get a chance….

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