Business reporter Connor Pearce travelled to Denmark to find out what a future with wind farms looks like for the Illawarra. The third piece in his series of stories looks at the challenges facing the Danish wind industry and how Australia can make the industry its own.
On a small island between Sweden and Germany, Denmark energy past and future have come into conflict.
Located 100 kilometres from Copenhagen in the Baltic Sea, Bornholm is known more for its handicrafts and medieval castle than its energy network, but the island has hit the national headlines after Denmark's plan for its energy future displaced a community group seeking to run the island off its own wind.
The 600 square kilometre island might be 16,000 kilometres away from the Illawarra, but it shows what can occur when community groups and national energy planning agencies meet each other in the midst of the energy transition.
The Danish island caught in the middle
Bornholm has always been a bit of an outlier in Denmark. Closer to Poland and Germany than Copenhagen and only linked to the electricity grid via an undersea cable to Sweden, island residents have been content to deal with their Danish compatriots mostly in the form of tourists that come to the island to enjoy the sunny climate and unspoilt nature.
Wind turbines have provided the island with some of its electricity for decades, and in 2016 the municipality of the island began to put into action the island's plan to be self-sufficient in energy by 2025.
Residents opposed a proposal to put more wind turbines on land, so a group banded together to plan to put turbines offshore, following a well worn pattern of community investment in energy infrastructure.
As elsewhere in Denmark, the first turbines were financed through joint community ownership schemes. More funds would be needed for the offshore wind turbines so a group called Bornhoms Havvind - Bornholm Sea Breeze - was established to enable residents to buy into the scheme in return for shares in the project, making it locally, publicly owned.
Organiser Helle Munk Ravnborg said the group drew from a cross section of the island community.
"We tried to call people from different sectors of our society, farmers, one [representative] coming from the area where we thought the wind farm would be most visible, the unions, industry, trying to mix those 10 people as much as we could."
Under Denmark's open door scheme for offshore wind, the Bornholm project could put itself forward once it met certain requirements, without the need for large government investment or direction.
However, just as the group believed they had ticked off all the requirements, they hit a wall.
"In February, just as we were ready to make our application, they closed down that procedure," Ms Ravnborg said.
"Right now we are in limbo, there's no door we can knock on."
On the other side of the island, the Danish government announced big plans for Bornholm's role in the country's energy future. The government has invited tenders for 3000MW of offshore wind power. In contrast, the community project aimed to produce about 100 megawatts.
The government proposal is not just about producing clean energy. The aim is to turn Bornholm into an "energy island" where vast amounts of renewable energy will be used to produce hydrogen and other 'green fuels'.
With Denmark having among the highest penetration of renewables in its electricity market of any country in the world, these energy islands are the country's next step in its ambitions to be a clean energy powerhouse.
On the island of Bornholm, this ambition has come up against a community project while on the other side of the country, in the North Sea, another proposed energy island has had to be delayed due to ballooning costs, reaching over seven billion Euros.
Heightened costs have also forced wind developers to scale back their ambitions in the United States and the UK, as inflation pushes up the cost of supplies, interest rates cut into finance margins and governments wind back subsidies that were designed to support the initial development of the industry before it reached its current commercial scale.
Danish wind turbine manufacturing giant Vestas posted a 1.6 million euro loss in 2022 while German multi-industry conglomerate Siemens put down losses across the business to its struggling wind turbine arm.
What does this mean for Australia?
Despite these macro-economic jitters, industry, unions and governments are confident that the sector can find a way through, partly due to the unavoidable necessity of bringing down global CO2 emissions. Having had a taste of these and other issues, Australian politicians including Cunningham MP Alison Byrnes and Newcastle MP Sharon Claydon say the Australian path forward is assured.
For their regions, the Illawrra and Hunter respectively, another uncertainty is the development of floating offshore platforms, an area of the industry still in its infancy.
Ms Byrnes said that just as Denmark had taken a risk on offshore wind a generation ago, Australia could have the same approach to its own ambitions.
"It's a real race, everybody's got a sense of urgency on offshore wind right around the world," Ms Byrnes said.
"We'll have to see how the technology develops over the coming years, and be at the forefront of being willing to try."
Ms Claydon said there was room for governments to have a greater appetite for risk, something Australian governments are unfamiliar with.
"We've got a big ambition to try and shift into renewables, and that may well require a boldness of investment, and that's going to be challenging not just for government, but for investors and the way that projects are normally developed in Australia."
Back in the Illawarra, former Wollongong councillor and Thirroul resident KerriAnne Christian said community concerns on the impact on bird and marine life had to be taken into account in the environmental approvals process, but the alternative of doing nothing was not an option either.
"I understand that we need to do something, and I see that there are too many compelling reasons for it to be out from Port Kembla, but I want the Five Islands [Nature Reserve] to be taken into account," she said.
Ms Byrnes said, based on her first-hand experience, birds were able to avoid being struck by turbines, but that local research would help inform what the solution may look like in Australia.
"Consultation is really important, and the community has good ideas as well so we can learn from them."
In Gippsland, where the most advanced offshore wind project is close to announcing a successful developer, Gunaikurnai Land and Waters Aboriginal Corporation chair Troy McDonald, said unlike the brown coal industry which sidelined First Nations people in its development 100 years ago, there was a chance to do things differently with offshore wind.
"We came into that process as an afterthought, but this time, we don't want to be an afterthought. We want to be front and centre of the planning, scoping, construction, and the mapping that's going to occur across country."
With wind farms in the Illawarra and the Hunter not expected to start before 2030, there was more time to settle what the project will look like, but as Ms Claydon pointed out, just as in Denmark the current state of affairs was not predicted, neither are the projects in Australia set in stone.
"There may not be the perfect solution right now, and even if you do think you've got one right now, in a few years there's going to be an improvement," she said.
"Being quite flexible is the way we approach it, not thinking that we can sit and wait another 10 years to find the perfect turbine."
The Mercury travelled with the assistance of the Danish Embassy, Canberra.
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