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Nithin Coca headshot

Denmark's Wind Industry Is Ready to Compete – Sans Subsidies

By Nithin Coca

Denmark’s largest wind turbine manufacturer, Vestas, says it's ready to compete without subsidies: a sign that the wind industry is maturing – at least in countries that genuinely support it.

It’s no coincidence that Vestas is in Denmark. The country is a leader in clean energy and once generated 140 percent of its electricity from wind. In fact, it's tactics have proven so successful that Denmark's government announced a timeline to remove wind subsidies by 2030.

The country's success is partly due to government-led investment and friendly regulations. But geography also plays a role, as the country's long, windy coastline makes for excellent wind resources. The wind industry there is strong, and thriving, due to the unwavering support it has received from the nation's government. Its flagship clean-energy firm Vestas is a world leader in wind and also has a large North American presence.

The long phase-out of subsidies will allow the industry to gradually adjust – creating market certainty. That is something that is, sadly, lacking in most other parts of the world, where subsidies are short-term and often renewed yearly -- as in the United States, where uncertainty about the future of the renewable tax credits led to a slowdown in clean energy development last year.

Thankfully, the U.S. credit was renewed – though its future remains uncertain, especially with the new pro-coal administration. The U.S. could be heading toward a scenario such as the one that happened in the United Kingdom, where the sudden removal of the offshore wind tax credit by the Conservative Parliament has stunted the industry and pushed the country further away from its stated Paris Agreement goals.

“While the government rolls out the red carpet for fracking, they’re pulling the rug from under onshore wind,”Alasdair Cameron, a renewable energy campaigner with Friends of the Earth, said in a press statement. “Proposed changes to the planning system could make it more difficult for local authorities to give the go-ahead to new wind installations.”

Right now, wind is in good shape in the U.S., particularly in states like Texas where it is already cheaper than power from dirty fossil fuels. Maintaining subsidies until 2020 will help that, but if we truly want wind power to take off, as it has in Denmark, there's one more thing we could do.

Here’s the thing – if wind can compete without subsidies, despite being just a few-decades old technology, what about fossil fuels? The ugly, dirty and, frankly, unethical secret is that fossil fuel development, production, and distribution is heavily subsidized around the world – estimated by the International Monetary Fund at an astounding $5.3 trillion in 2015. For comparison's sake, wind received just $5.9 billion in the same year.

In fact, cutting these subsidies could reduce global greenhouse gas emissions by 6 to 13 percent a year by 2050 alone – a figure which demonstrates the inefficiencies in the current system.

It is great news that wind will soon compete without subsidies in Denmark. But let’s even the playing field and remove all fossil fuel subsidies around the world as well – both to reduce greenhouse gas emissions and ensure that the environmental and social costs of dirty energy are fully accounted for. Then wind can truly thrive, everywhere.

Photo Credit: CGP Grey via Wikimedia Commons

Nithin Coca headshot

Nithin Coca is a freelance journalist who focuses on environmental, social, and economic issues around the world, with specific expertise in Southeast Asia.

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