Harnessing the Breeze

Wind energy has been around for hundreds of years, but has only recently begun to be used as a source of grid power. China remains the leader in terms of installed wind energy capacity, with a substantial margin (561 GW), followed by the USA (154 GW), Germany (73 GW), and India (50 GW). It was, however, Denmark which was a remarkable story in harnessing wind power after the oil crisis of the 1970s. Let us discuss this in more detail below.

Wind Power: The Danish Story

The Danish Story had its origins in the twin oil crisis of the 1970s. The large increase in oil prices in 1973 hit Denmark hard, and the response was the standard one: that of rationing oil and improving energy efficiency. There was also a move towards self-sufficiency in oil and an effort to substitute oil for coal. A new government company, DONG, was also formed to increase such efforts. The late 1970s and the 1980s was also a period of experiments with harnessing wind energy, with the Danish government subsidising the development of wind power and also guaranteeing a fixed price for wind power. Three Danish companies took advantage of these policies, and it is their efforts that made Denmark the leader in wind power (both offshore and onshore) and showed the way to the world. These companies were: Vestas, Orsted (earlier called DONG Energy) and Elkraft. It is no wonder that, today, wind energy contributes to 53 per cent of the power generated in Denmark.

Vestas is a global leader in the manufacture of wind energy turbines. With its origins in a blacksmith’s shop in 1898, Vestas began with prototypes of wind turbines in the 1970s, in the aftermath of the oil crisis. The 1990s were a growth period for the company when it bagged a wind project in India with finances from the Danish aid agency, DANIDA. Vestas continued to expand its operations into North America, China, Spain and India and is today the largest wind turbine manufacturer in the world, having installed 122 MW of wind capacity in 82 countries.

Orsted is another Danish company which took advantage of the policies and incentives of the Danish government to establish itself as a wind company. It was only in 2017 that DONG divested itself of its oil and gas assets and changed its name to Orsted. It may be recalled that DONG was created in the 1970s after the oil crisis as a government-owned company tasked with exploring and producing oil and gas from its reserves in the Danish North Sea. Till the early 2000s, DONG was a pure fossil fuel company, which changed by 2006 when it acquired companies such as Elkraft and Elsam, which were in the wind energy space. It also acquired other fossil fuel companies. In 2006, these companies all merged, and DONG became DONG Energy. With pressure from the EU and its emissions trading and a move to price carbon, DONG Energy began building more and more wind energy plants. DONG Energy faced other hurdles in the form of gas prices crashing because of the US fracking having flooded the world market with cheap gas. By 2017, DONG Energy decided to offload its fossil fuel assets and became a pure wind power company and even changed its name to Orsted. Even today, the Danish Government has a majority stake in Orsted and continues to lead the green policy initiatives in the country. From the time that Orsted (or its predecessor company) built the first offshore wind plant in the world, it has come a long way. Today, it is one of the leading offshore wind generating companies in the world, with 24 offshore wind farms operating in the US, UK, Taiwan and many other countries. One of the largest projects is the UK offshore wind farm of 1400 MW. Orsted targets building wind plants of 30GW by 2030.

Conclusion

While China, the US, India and Spain are the largest in terms of installed capacity of wind power, it is Denmark that first showed us the way. Not only that, as we saw, Denmark has a high 53 per cent of its energy coming from wind energy. Danish companies such as Vestas and Orsted have been pioneers and continue to contribute to the transition to a carbon-free world.