Danish and Norwegian wind industry: The relationship between policy instruments, innovation and diffusion

This article compares the role of policy instruments in stimulating long-term technological change in Danish and Norwegian wind industry. It concludes that although predictability has periodically been low, Denmarkʹs broad portfolio of policies and measures has been well adapted to the different stages in the development of its wind industry. This has contributed to a high degree of innovation, successful establishment in niche markets, high degree of diffusion and establishment of domestic and international mass markets, and—in recent years—an increasingly successful replacement of senescent technology with new. The motivation of Norwayʹs wind energy policies and measures—at least up until the late 1990s—has been to increase power supply rather than to stimulate industrial development and technological change. Policies and measures have been weaker than in Denmark; have been less stable over time; and stimulated the demand side much less. They have not sufficiently covered the wind industryʹs perceived needs on different stages in the development of new technology, and have not sufficiently stimulated continuous improvement, learning and new product development (dynamic efficiency) in industry. This has been part of the reason why there has been only a limited extent of innovation and diffusion of wind technology in Norway.