Common knowledge states that wind energy's big drawback is that the wind doesn't blow all the time, so you have a big problem when it doesn't. Denmark's DONG Energy doesn't see it that way.
By 2007, Denmark was getting about 20% of its electricity from wind. As an existing power company integrating wind, it has enough conventional generation to supply demand any time the wind isn't blowing. The problem is when the wind is blowing during a time of low demand (i.e. overnight). In that situation, the wind farms generate more electricity than needed to meet demand. In other words, there is not a market for all the electricity that can be generated by wind, and as a result, DONG Energy is giving up a significant portion of the return on their investment because some of the electricity goes unsold. This is particularly frustrating because DONG Energy is under pressure from Danish political leaders to add more wind energy.
Enter the electric car...
DONG Energy has determined that a viable solution to their problem is to convert a large part of Denmark's vehicles to plug-in electric. Since most electric vehicles are charged overnight, this creates an ideal market for excess wind capacity. In order to fast-track the electrification of Denmark's cars, DONG has signed a letter of intent with Palo Alto-based Better Place, Inc., to collaborate in introducing electric vehicles and charging infrastructure to Denmark. Better Place designs and installs intelligent charging stations that communicate with a central office, and Better Place has a special working relationship with Renault/Nissan (OTCPK:NSANY) to supply plug-in electric cars to customers, starting in volume in 2011.
The National Energy Research Labs has done extensive research to determine how much wind power could be integrated into our existing U.S. grid before running into major problems. The answer: 20%. Denmark's experience confirms that this was an accurate prediction.
On our present trajectory, it will be several years before wind power reaches 20% of the U.S. grid. This means we can benefit from observing how Denmark deals with this limitation. It will suggest to us whether the growth in U.S. wind installations will stall out around 20%, or if they can go further (and how much further).
The wind turbine manufacturers supplying the U.S. market are, in order of units installed in 2007: GE Wind (NYSE:GE), Vestas (OTCPK:VWDRY), Siemens (SI), Gamesa (OTCPK:GCTAF), Mitsubishi (OTCPK:MHVYF), Suzlon [NSE: SUZLON.NS], Clipper (OTC:CRPWF), and Nordex (OTCPK:NRDXF).
Disclosure: No positions