Denmark, a tiny country on the northern fringe of Europe, is pursuing the world’s most ambitious policy against climate change. It aims to end the burning of fossil fuels in any form by 2050 — not just in electricity production, as some other countries hope to do, but in transportation as well.
Now a question is coming into focus: Can Denmark keep the lights on as it chases that lofty goal?
Anyone at the TIMES realize what a wonderful context requires a question like this?
Lest anyone consider such a sweeping transition to be impossible in principle, the Danes beg to differ. They essentially invented the modern wind-power industry, and have pursued it more avidly than any country. They are above 40 percent renewable power on their electric grid, aiming toward 50 percent by 2020. The political consensus here to keep pushing is all but unanimous.
The trouble, if it can be called that, is that renewable power sources like wind and solar cost nothing to run, once installed. That is potentially a huge benefit in the long run.
But as more of these types of power sources push their way onto the electric grid, they cause power prices to crash at what used to be the most profitable times of day.
That can render conventional power plants, operating on gas or coal or uranium, uneconomical to run. Yet those plants are needed to supply backup power for times when the wind is not blowing and the sun is not shining…
The governments have offered short-term subsidies, knowing that if they force companies to operate these plants at a loss, it will be a matter of time before the companies start going bankrupt.
Throughout Europe, governments have come to the realization that electricity markets are going to have to be redesigned for the new age, but they are not pursuing this task with urgency. A bad redesign could itself throw customers into the dark, after all, as happened in California a decade ago…
Amazing. An adult supposedly knowledgeable about power generation, pricing and, yes, price manipulation – who apparently never heard of Enron. The corrupt company with even more corrupt capitalists at the helm who deliberately induced many of California’s so-called power shortages.
The government is…well aware that it needs to find a way out of this box. Environmental groups, for their part, have tended to sneer at the problems the utilities are having, contending that it is their own fault for not getting on the renewables bandwagon years ago…
So the trick now is to get the market redesign right. A modest version of reform would essentially attach a market value, and thus a price, to standby capacity. But Rasmus Helveg Petersen, the Danish climate minister, told me he was tempted by a more ambitious approach. That would involve real-time pricing of electricity for anyone using it — if the wind is blowing vigorously or the sun is shining brightly, prices would fall off a cliff, but in times of shortage they would rise just as sharply.
As Denmark, like other countries, installs more smart meters and smart appliances able to track those prices with no human intervention, one can imagine a system in which demand would adjust smoothly to the available supply. Most people would not care if their water heater were conspiring with other water heaters to decide when to switch on and off, as long as hot water reliably came out of the tap.
Has Mr. Gillis ever traveled, lived among ordinary folks in Europe? First time I ran into tankless hot water heaters was in Switzerland – in 1971. Prices gave been coming down as efficiencies rose – even for electric models instead of gas-fired. We installed an on-demand electric hot water heater in our home this summer for less than $400 for the unit. Our household electric bill is down 20-30%. Payback in one year.
Yet, even if Denmark can figure out a proper design for the electric market, it has another big task to meet its 2050 goal: squeezing the fossil fuels out of transportation…Mr. Petersen told me he still felt electrification of cars was the way to go, but the cars themselves were not really ready.
“We need longer range and lower prices before this becomes a good option,” he said. “Technology needs to save us here.”
Fortunately, there are more than one or two automobile manufacturers dedicated to resolving that portion of the questions asked. Builders ranging from Volkswagen/Audi/Porsche to Mercedes, Nissan/Renault, target less expensive electric cars with ranges extending 250 to 550 miles decades before the 2050 renewable electrification target date.
At the mid-price point and up for big luxury cars Tesla is already there.
An important footnote BTW. Save the arguments about “manageable” small countries vs what is needed to change over the United States. It can be done one state at a time, one region at a time. Denmark is bigger than a number of states. So is the size of that nation’s population.
The important bit is that the citizens and politicians are also smarter, sensible and willing to change. That’s the significant comparison.