Recent Developments

This trend of Danish governmental support has continued, as evinced by the 1998 “Report Concerning Danish Energy Policy,” in which the Danish government makes strong note of the fact that their “point of departure…is to ensure consideration for the environment in the energy sector.”  They further note that combating climate change is a matter of “high priority.”  The country’s tax system relies a good deal on “green taxes” and emissions taxes, making policy changes eliminating either tax quite difficult.  Further, and due certainly in part to their size, Denmark is “more than 100% self sufficient in oil and gas,” though the country is also reliant on profits from power exports to neighboring countries.  However, countering its extant fossil fuel potential, Denmark is very determined to work on greenhouse gas abatement.  The Danish people presently rely on wind power for 18% of their electricity consumption, with expectations that reliance on wind will rise to around 21% of consumption by 2003 and 40% to 50% of consumption by 2030. 

Denmark has set itself an ambitious goal, which has been instrumental in the adaptation of wind generation as a viable source of Danish power.  Due to both the 1997 Kyoto Protocol and the 1998 EU Burden Sharing Agreement, Denmark is under treaty obligation to reduce average annual greenhouse gas emissions to 21% of 1990 levels in the period 2008-2012.  It is interesting to note that Denmark’s reduction commitments are more extensive than necessary in terms of Denmark alone; in an impressive recognition of shared responsibility, the country has “accepted…reduction commitments in connection with establishing burden sharing” with the rest of the EU, which is responsible for only an eight per cent reduction.  In fact, the Danish government recognizes that fact, stating in their 2003 “Proposal for a Climate Strategy for Denmark” that “greenhouse gas emissions are a global problem that must be solved by ensuring the most cost-effective reduction at global level.”

In terms of Danish wind installation, the country presently has over 2600 MW of wind generating power installed on land, as well as a growing body of energy being generated on offshore wind farms.  To ensure competitive prices, the Danish government operates a fixed price system with “an environmental premium” paid by the kWh above and beyond the market price.  This premium is paid for the first 12,000 ‘full load hours’ the turbine is operational, essentially ensuring that the turbine and its generational capacity are able to overcome the start-up costs.  As the premium is financed via increased prices for the electricity, it is not considered government support but, rather, is something like (voluntary) “green power” purchase programs in the United States.  

This section is now 6 pages long. Once the flow charts are put in, it will probably be 8 pages. I will cut down the policy section, the regional section and try to move more detailed stuff to the appendix to reduce these sections substantially, to just get across what an investor needs to know at first glance. Josh, if you work on making your writing blend with mine in this section and put in the charts, I will work on cutting my sections on paper, and when I receive the file on Monday, I'll put in the changes I made to the master copy.

United States Market Assessment

The United States wind energy industry experienced massive growth in the utility-scale wind industry in 2001. At the end of 2000 there was 2,554 MW of wind generation installed and as of March 2002, total U.S. capacity was 4,248 MW. The states where these turbines were placed range from the Midwest to the West (California, Colorado, Iowa, Michigan, Kansas, Minnesota, Texas, Oregon, South Dakota,Wyoming and Washington) with a few turbines placed in New York and in Massachussetts.  The growth is due to a combination of the federal production tax credit, the Renewable Energy Production Incentive, and the fact that many of these states require utilities to purchase a percentage of their power from clean sources influenced this growth.

As efficiencies and costs of three blade turbines have reached a plateau, the Department of Energy has shifted attention to the two-blade design, among other low wind speed designs, to maximize the potential for new turbines to come on board to meet the unprecedented demand for wind power in many areas of the country.

WTC has an opportunity to add its turbine into existing new utility-scale wind farms where newly-popular green power purchasing agreements have already been arranged.  Explain This would benefit WTC in several ways, primarily with lowering risk for the buyer, and secondarily with the opportunity to collect performance data in relation to other turbines.