There is no doubt that the development of renewable energy has made great strides in recent years. But even with advances in the industry, the idea of a community being able to meet all of its energy needs through its own renewable generation can still seem like a dream of only the purist idealist. For one island community in Denmark, however, this dream has become a reality.
 
The island of Samso is located off the Eastern coast of the Danish mainland. It’s a tight-knit community of about 4,000 that’s made up of mostly farmers. Most residents don’t consider themselves especially progressive; in fact many would say the exact opposite.

Nevertheless, about ten years ago Samso set out in pursuit of energy independence. At first, the process was slow. The people pushing the planning initiatives were far outweighed by skeptical residents. But as time went on, residents began buying into the concept. This prompted their neighbors and friends to also get behind the idea, until the chain reaction of support had almost everyone on board.

Many Samso residents began partnering with neighbors and even non-island residents to purchase large industrial scale wind turbines. While the upfront investment is expensive, the various sizes of investor groups could suit people in different financial situations. These shareholders then receive annual dividend checks for the power that their machine produced over the course of the year.

 Danish utilities are required to offer the owners of these projects 10 year, fixed rate contracts. The contracts are designed to, with normal energy production and barring catastrophic events, pay off the turbine in 8 years…8 YEARS!!!

So not only are you building a source of clean, renewable energy, but you’re basically guaranteed to make 25% on your investment over the first 10 years. Not to mention that turbines normally have a life span of double that if not longer!

Now, it’s easy to say that because of the utility policy in Denmark and the excellent wind resources in Samso that this is an ideal case that would be very difficult to replicate, and in some respects that’s true. However, there are a number of lessons that we can learn from this prime example.

First, we need to give renewable generation a high enough priority that we will make it financially feasible for the investor. This can come from subsidies as is the case in the US, but I would argue that Denmark has a better solution.

By requiring the utilities to offer fixed power purchase agreements for a period long enough to recoup the initial investment, we pass the expense along to the end user. This not only takes the long bureaucratic process out of the government’s hands (i.e. grant and subsidy processing which is inherently inefficient but still uses the rate payer’s tax dollars), but also basically guarantees the financial success of the project.

This high electric price along with the potentially lucrative return on investment makes investing in wind appealing to residents in other communities who are encouraged to develop projects of their own. This type of system is self perpetuating unlike artificially inflated government funding.

If the goal of renewable development in the rest of the world is to do so in a healthy and sustainable manner (which hopefully it is), the Danish community wind model has my vote!