Denmark's goal of independence from Fossil Fuels by 2050
Denmark’s Goal of Independence from fossil fuels by 2050 Lars Georg Jensen Chief Adviser, International Affairs, Danish Energy Agency, Ministry of Climate, Energy & Building Dublin, Ireland, 14 November 2012
Denmark 39 Years ago 1973-74 oil crisis: 2 countries were 99% dependent of imported energy: Japan + Denmark Severe economic crisis, unemployment - and no driving on Sundays...
But today Denmark has the… Lowest energy consumption per GDP-unit in EU Highest contribution to electricity from new renewables (non-hydro RE) in the world (33%) Most efficient clean coal technology world wide (CHP) Highest export rate of energy technology in the OECD – wind, energy efficiency (Vestas, Danfoss, Grundfos, Rockwool, etc.).
Gross Energy Consumption in Denmark 1972-2010 – from oil to a mix of fuels900800700600500400300200100 0 1972 1975 1980 1985 1990 1995 2000 2005 2010* Oil Natural Gas Coal Renewable Energy
Production of Renewable Energy 1980-2010 – a mix of sourcesPJ140120100 80 60 40 20 0 1980 85 90 95 00 05 10 Wind Straw Wood Biogas Waste Heat Pumps 5
Five key drivers of global – and Danish- energy policy• Energy security: people & societies getting the amount of energy they need when they need it;• Economic development: energy provided at a price which enables economic growth & welfare (i.e. that the energy is affordable for consumers).• Environmental priorities: tackling climate change and local pollution.• Energy safety: providing energy in a manner consistent with safety for people and societies.• Public Accceptance (examples: nuclear, CCS, wind, etc.)
Certainties and uncertainties - some global energy trends 2012• High and fluctuating oil prices - era of cheap oil is over.• Lots of natural gas on the market, including shale gas, but many uncertainties about price, delivery & environmental impacts (of shale gas). LNG?• Lots of coal, but prices are uncertain, CO2-emissions high, and development of CCS slow (who wants to pay?).• Uncertainty about the future of nuclear power.• Demand for energy is rising fast in emerging economies – and are still high in the OECD.• Global CO2 emissions in 2010 & 2011 were record high.
Trends continued…• Renewable energy is becoming more competitive, especially Solar PV.• Renewable energy is growing at fast rates: half of all new electricity capacity is renewable and RE becomes 2nd largest source in 2015.• Energy efficiency: huge potentials at limited costs are often not harvested.
Summing up: four good reasons why some countries are taking steps to move beyond fossil fuels:• The economy. Renewable energy is not cheap, but nor is continuing with fossil fuels and nuclear. Huge investments are required in any case – we can decide what to invest in!• Predictability! Creating predictable prices for businesses and consumers.• Political independence (>$100/barrel is ”the largest transfer of wealth in human history”.)• The environment – we are heading for 3.5 – 6 degrees C global temperature increase…
This is why the Danish Government’slong-term goals for energy policy are:• 100% Renewables by 2050 (entire energy supply – electricity, heating, industry and transport)• Coal should be phased out from Danish power plants by 2030.• Electricity and heat 100% renewable already by 2035.
What’s the trick?: 100% RE in 2050 …by improving energy efficiency …in order for more energy services to be satisfied with less energy PJ/Year1000 …based on renewable energy sources 900 Energy Efficiency 800 700 Conversion loss etc. Renewable Energy 600 500 Transport 400 Process (- 300 electricity) 200 Electricity consumption Other RE Wind 100 Waste Wood Room 0 heating Straw Energy consumption 2009 Renewable energy 2009
Key elements for a 100% Renewable Energy society in Denmark• Electricity as main energy carrier.• Wind and biomass are main sources.• Strong interconnections to neighbours – domestically and abroad (Germany, Sweden, Norway)• High share of Combined Heat and Power and district heating systems.• Focus on systems rather than individual sources & technologies.
New energy strategy – from politicalstatements to broad agreement• End of 2007: New Governmental declaration announces fossil fuels independence as political target and establishes Commission on Climate Change Policy.• May 2008 – Sept 2010 Commission works, publishes report 28.09.2010.• 2011: Government publishes its own plan for independency from fossil fuels.• 2011: Election: New Government publishes its own plan.• March 2012: Broad agreement on 2020 plan in Parliament.
New Policy Targets for 2020 Energy Agreement of March 2012
Wind: How to reach 50% of electricityby 2020 Adding net 2,000 MW capacity by: Further 500 MW installed near the coast Onshore development of total 1800 MW (replacing 1,300 MW) 1000 MW offshore wind turbines Comprehensive strategy for Smart Grids
Converting to RE in buildings From coal to biomass in large scale CHP Promotion of new technologies e.g. geothermal energy and large heat pumps Banning installation of oil-fired boilers in homes: In new buildings from 2013 In existing buildings in areas where district heating and natural gas is available from 2016
Other initiatives to reach the RE goals Electricity and biomass in Transport Subsidies for recharging stations (EV) and infrastructure (hydro and gas) 10% biofuels by 2020 New strategy for plug-in hybrids, etc. by 2013 INDUSTRY Better framework conditions for Biogas Better and new funding schemes Increased capital installation subsidies BIOGAS TRANSPOR T More renewable energy in Industry Increase of RE in process promote more industrial CHP
Financing the energy agreement PSO tax tarifs taxTotal costs ca 500 mill euro tarif PSO ca 165 euro/year per household ca 3 euro/week per s householdFinanced through Tariffs on energy distribution PSO financing RE increase in electricity and gas grids financed through Tax for heating
Key Policy Strategy in Denmark Long term strategy and based on broad political agreement in the Parliament. Cost-effective subsidy schemes with evaluation on a regular basis, avoiding over-subsidising Energy taxes on fossil fuels makes RE and business more efficient & competitive. A suitable legislative and planning framework creating predictability. A combination of a strong state and the market!
Conclusions : - The transition to independence of fossil fuels is:• Challenging - Amounts to no less than a structural shift in the economy - The necessary investments are considerable. - There are several roads to take, but also ”safe bets”• Affordable. - For the economy as a whole the transition is expected to have limited negative impact, if any - For individual companies the transition will create winners as well as losers• Technically feasible - Alternatives to fossil fuels are available and can deliver on a large scale - Alternatives to fossil fuels need supportive policy frameworks to be competitive in the short runAnd presents new business opportunities - politically created demand for wind power, biomass and bio fuels, building components, - incentives for profitable energy renovations in industry and other business sectors - first mover advantages for cleantech companies
Thanks for your attention! More information: http://www.ens.dk http://www.kebmin.dk