These countries have similar wind resources, and both enjoyed active government support for wind R & D. Each country developed national laboratories dedicated to wind energy research. By the year 2000, Denmark had installed 2340 MW of capacity. The Netherlands, on the other hand, had only installed 442 MW despite a goal of 2000 MW (Kamp, 2002). A similar disparity existed in domestic wind manufacturing - Denmark had (and continues to have) a flourishing domestic wind turbine manufacturing industry, while the Netherlands had only one relatively small manufacturer. The success of Denmark's wind energy efforts came despite the fact that the Netherlands spent more money on wind research and development than Denmark (Karnøe, 1995). But why?
This subject has been studied by several scientists with varying focus. The short answer is that learning environments and market stability were better in Denmark. The initial wind turbine users in Denmark were mainly farmers and small companies. This user base was well-organized and formed trusting relationships with wind manufacturers and research institutions. This fostered a hands-on "learn by doing" approach to learning (Kamp, 2002).
The user base in the Netherlands was not organized and did not form the same trusting relationships. Perhaps most important was an early feed-in tariff in Denmark, which fostered a large and stable market (Ragwitz, 2010). The feed-in tariff was able to provide a low-risk investment environment, which encouraged the market to grow. A study on wind energy incentives from Lawrence Berkley Laboratories states that "a sizable local market appears to be a pre-requisite to achieving successful localization [of a wind energy market]" and that "a stable feed-in tariff has clearly proven to be one of the most successful mechanisms to date for promoting large-scale wind energy markets that offer the stability necessary to attract local manufacturing" (Lewis & Wiser, 2005).
From this, it is clear that government support is essential for significant capacity growth and domestic manufacturing success. The cost of wind energy has come down substantially in recent years, but it still needs some kind of support in order to experience continued growth. And of course, countries have different economic and political characteristics and cultures, so a specific mechanism (like a feed-in tariff) is not suitable everywhere.
There are other ways a country like the US could do more to foster a domestic wind energy market and manufacturing base - local content requirements, tax incentives, mandatory renewable targets, government tenders, and others. Whichever mechanism is used, it should create a stable and large market for wind energy investments.
Works Cited
Kamp, L. M. (2002). Learning in wind turbine development : a comparison between the Netherlands and Denmark. Retrieved September 24, 2010, from Universiteit Utrecht: http://igitur-archive.library.uu.nl/dissertations/2002-1128-170921/inhoud.htm
Karnøe, P. (1995). Institutional interpretations and explanations of differences in American and Danish approaches to innovation. In W. Scott, & S. Christensen (Eds.), The institutional construction of organizations. Thousand Oaks: Sage Publications.
Lewis, J., & Wiser, R. (2005). Fostering a Renewable Energy Technology Industry: An International Comparison of Wind Industry Policy Support Mechanisms. Berkley: Lawrence Berkley Laboratories. Available at http://eetd.lbl.gov/ea/emp/reports/59116.pdf
Ragwitz, M. (2010, September 20). Promotion Instruments for Renewable Energy Sources in the Electricity Sector. Akureyri, Iceland.
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