Alas, as the wind soars, so do our energy costs. Danish electricity prices have only gone up, up, up, and through the roof during the last thirty years or so, concurrent with the massive, statesponsored introduction of wind turbines. Or, to be precise, the pricetag of electricity itself hasn't really changed much since the 1930s, but has been completely buried under an avalanche of taxation, which in various guises makes up nearly nine tenths of my electricity bill. A lot of this is "green" tax, earmarked for sponsoring - you guessed it - more governmentally mandated wind turbines.
To the best of my knowledge, our Danish electricity is the most expensive in Europe.
That's the actual intended policy, though, not some undesired side effect. The public policy has been that electricity should be highly taxed, both to encourage conservation and to raise funds for making it cleaner.
It's also, like many things in Denmark, tied in with national industrial policy. Greentech in general, and wind turbines in particular, are seen as an important export sector. So Denmark has an interest in "modeling" the benefits of this technology at home, with the expectation that between Vestas, smart-grid technology, etc., the whole endeavor of associating Denmark with wind energy will not only be "green", but also net-profitable for the country.
As with most renewables (e.g., wind, solar, wave), I would imagine that just because production of energy outpaced its consumption on a given day, the same may not be true on any other given day.
It was not clear if energy capacity has recently increased but the article did state that last year on average it produced 39% from wind. That being the case, focusing on conservation seems like a good idea still...
Make sure you qualify what "most expensive" means. Here in California, we have some of the highest electric rates in the United States but also some of the lowest electric bills [1]. Saying we have "expensive" energy requires defining what that metric is; sure, CA loses on energy rates but I'll argue the rate is a questionable metric at best. I have no idea what the situation is in Denmark, of course, but there's more than the per-kilowatt-hour figure.
For the curious, California achieves this by a regulatory measure called "decoupling": a utility's profits are not connected to how much raw energy it sells. In particular, CPUC (the statewide utility regulator) lets electric utilities, both municipal (e.g. SMUD) and investor-owned (e.g. PG&E), charge higher rates if they implement energy efficiency or demand-side management measure to reduce total demand, allowing the utility to maintain about the same level of profitability but at reduced energy consumption. It's pretty cool.
[1] in 2012, from EIA data, CA paid $0.15/kWh rate and $88 average monthly bill mo whereas the national average was $0.12/kWh and $107/mo. Slides from Jane Woodward.
Yes, there is more than the per-kilowatt-hour figure. There is a fixed charge for being connected to the public grid. That connection, here in Denmark, is mandatory, by the way.
But apart from that, there's nothing more. That's the cost I see, that's the price I have to pay. And I do mean HAVE to pay. Going off the grid, producing my own electricity, will only get me into taxational hot water and possibly fines.
If you have a rural vacation house (for instance) in Denmark, and you are off the grid and ... perhaps have some solar arrays ... you would have to pay tax on the power generated ? And possibly fines ?
The thing you have to understand about Denmark is, there is no "off the grid". If you have a house that it's legal to live in, it's connected to public utilities. There are no unnamed roads or unnumbered houses here. (Or unnumbered citizens, for that matter.)
What happens if you install a solar array is that your meter stops running or runs backwards when you're generating more than you're using (and you're selling back power). Even if you don't draw anything from the grid, you're still paying to be connected.
VAT is 25%. And the tax is depending on your income. It's from about 40-51%.
However, living in Denmark I've got multiple things in return:
- Free health care
- Free schools and university (got my computer science degree for free. Only had to pay for the books).
- You get paid about $1000/month while studying to cover apartment rentals etc.
- If you loose your job, you will still get paid by the state to continue living :-)
When having got your education, and you might think that it's crazy to pay so much in taxes of your income, but remember what you've got for free to get there :-)
However, I think the whole tax-system needs an overhaul. For example there is a 180% tax on cars (+25% VAT). So many people are driving in unsafe, fuel-consuming cars. Lowering the tax on cars could lead to roads with safer and more fuel-efficient cars. Electric cars have been tax-free the past years, but it looks like it's going to change in 2016.
AND electricity is expensive by the end-users. The electricity itself is cheap, but when I buy electricity for 200 DKK, I have to pay about 800 DKK in taxes.
No, you understand correctly. Living here, you pay, or the almighty tax authority will somehow get you in the end. This goes for nearly everything.
Official danish broadcasting channel, DR, collects roughly USD 350 per year from ANYONE with an internet connection worth the name.
Highly visible on Danish roads: We drive older, smaller cars than our Scandinavian and German neighbours. Decent cars are taxed out of reach. All in the name of sustainability and latter day puritanism, of course.
Denmark is rather small (1.5x Hawaii), it has a high population density and the population is relatively evenly distributed. The area in Denmark where you could put a rural vacation house without being relatively close to an existing electrical line is almost nonexistent.
Haha, I pay $.30AUD/kWh, and that's with some discounts. I'll be looking into solar panels for next year, but alas the government prefers coal and has cut the solar rebates.
Decoupling does not reduce the overall bill for ratepayers. It keeps the utility whole when they sell less electricity. The reasons that CA has lower bills, even though rates are high is the weather (how much air conditioning is used on the coast?), the high number of people that live together in a single dwelling, and little high energy industry.
If you live south of San Francisco you don't need a heater, and north of LA you don't need a AC. When I lived in Santa Barbara I didn't have AC or heating. And it was lovely.
In Atlanta we all need heat pumps (which are efficient) for both AC and heating. See what that'll do to your e-bill.
> To the best of my knowledge, our Danish electricity is the most expensive in Europe.
It is, when you count in taxes and VAT, which go to produce other useful outcomes. However, Ireland together with the UK has the highest energy prices excluding taxes, closely followed by Cyprus and Spain. Interestingly enough, three of these are islands.
It would be interesting to see these prices without subsidies, as the enery market is pretty global and these big differences must come from something else, I think.
In Germany, the private consumer pays for all the additional cost imposed by renewables while the industry still gets the old tariffs. Naturally, because a small fraction of consumers need to cover the whole cost, normal people see a much higher bill.
These are the costs you are paying for having a better and cleaner future not only for yourselves but also the next generation. Nothing wrong with that.
Absolutely true, but it's not being promoted right. While Denmark is building wind farms, we're have also been told to save on electricity continuously for the past 10+ years. Again there's nothing wrong with that, BUT if you save on electricity every year and still see your bill go up, due to additional taxes, and tariffs, your motivation is broken.
Saved 10% on your electricity and having your bill stay the same doesn't make you particular susceptible to future electricity saving campaigns. If you don't do anything, then sure you bill goes up, but at least it does feel like wasted effort.
The majority of an electricity bill in Denmark isn't the power you used, that's actually fairly cheap, it's the myriad of different taxes that raise your bill. It makes it almost impossible to read you bill or reduce your cost by any significant amount. It really isn't a system that promotes energy savings.
What you're saying is that you saved 10% electricity and helped the environment at no cost to you. (You might have bought some expensive LED lights, but at least they'll last a number of years.)
I also got a little annoyed this year when my energy provider informed me that the electricity costs would sink (pegged to actual marked prices) and the fixed costs would rise. That change made my electricity more expensive only because I use very little electricity. Regardless of that change though, using more electricity would still cost me more — so there is no reason to leave the lights on for good measure. The change just reflects the nature of utilities. The utility has to maintain the grid no matter how much electricity you use. If the fixed costs increase that just means the pricing is more realistic.
> What you're saying is that you saved 10% electricity and helped the environment at no cost to you.
That's not what I'm saying. We're aren't talking about just changing light bulbs, most people I know did that years ago. All the easy stuff was done years ago, it's trying to eliminate standby power consumption, turning of the oven early cooking on the residual heat, buying a new fridge and so on. Expensive and cumbersome things. Sure people want to help the environment, but it would be more motivating if all your investments and vigilance was reflected on your electric bill.
A typical Danish electric bill is:
10% transport, paying for the grid.
45% electric tax (Just a tax, not really clear what it's for).
20% sales tax
10% PSO tax, for securing electrical supply, support for green energy production and research.
15% Actual energy usage.
I'm concerned that people will stop trying to save energy, if it's not reflected on their bill. Most people will say that they want to help the environment, but honestly I don't think it's a motivating factor for remembering to turn of the light, the direct impact is simply to small.
But surely it is pretty simple to see the two separately - you pay X for electricity used (a falling amount) and Y for mandatory green tax (which everyone moans about but at least sees some social utility for)
People aren't fully rational, which can complicate issues but still, if I wanted to encourage conservation of something, raising the price is a pretty obvious place to start.
Most economists seem to favour a revenue-neutral carbon (or GHG) tax, as that let's the market work a little better, but the end result would be similar, people paying more for electricity and there being an incentive to build towards a 100% renewable/carbon free energy grid.
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To the best of my knowledge, our Danish electricity is the most expensive in Europe.