Green Energy and Sustainability
Denmark’s success in converting to a sustainable, green society is widely recognized, and the country ranks at the top of the Energy and Sustainability Rankings. This paper tries to understand what Denmark has done to be a Green Energy Leader.
According to the World Energy Council, Denmark is a global champion when it comes to the balance between three important factors in energy supply, namely, security of supply, consumer prices, and sustainability in relation to climate and the environment. In addition to efficient energy supply, price, and availability of energy, as well as environmental impact, the country’s ability to establish consistent, predictable, and stable policy frameworks and rules also counts.
It is worth highlighting that nine out of ten countries on the top ten list are European.
In 2017, Denmark’s energy and climate policy was also reviewed by the International Energy Agency, which highlighted Denmark as an international role model because it builds wind turbines at record low prices and has good electrical connections to its neighboring countries.
It’s all thanks to a solid effort over decades led by the Danish government and the private sector that the country has delivered impressive results and built up a number of strengths.
Denmark has managed to build a world-class green energy system, which has provided a cleaner everyday life and greener energy while staying at the top of the security of supply.
The results are primarily because across Danish society, there has been a broad collaboration on the country’s green transition and energy policy since the energy crises in the 1970s and through the visions and priorities of the population, decision-makers, and companies.
Denmark set a world record
In 2017, Denmark set a world record with 43.4% of Danish electricity produced solely by wind turbines. It is also the only country globally that covers the largest share of its electricity production with green electricity from wind turbines and is a European champion in the export of energy technology. Of all the EU, it is the country where exports of energy equipment make up the largest share of total exports of goods.
Green energy as a brand
Denmark has created a valuable green brand that has made the country richer and given all Danes more welfare, growth, and jobs across the country. The strong green brand has also given the country a valuable foreign policy impact. Energy policy has gone from being solely sectoral policy to having a broad societal significance across a number of policy areas, such as foreign and security policy as well as business and growth policy. The strategic importance of the energy sector for Danish society has thus grown significantly over the years. At the same time, the industry has undergone professionalization, where private, capital-heavy players are increasingly seeing business opportunities and making significant billion-dollar investments in, among other things, offshore wind, to a degree that the country has not seen before.
The Danish capital is the Green Capital of the World
The Danish capital is a leading model of urban sustainability. Cited as an exemplary city on countless occasions, experts agree in considering it the world’s greenest city.
Copenhagen has maintained a strategy focused on adapting public spaces, fostering renewable energies, and rationalizing cleaner mobility. The authorities intend to neutralize 100% of the city’s polluting emissions by 2025 while considering that its urban population of 1.3 million will increase by 20%.
In 2016, there were 675,000 bicycles and just 120,000 cars on the streets of Copenhagen, and around 62% of the city’s residents commute to work or school by bike, and almost one-third of all journeys across the city are done with this mode of transport.
Fossil independence in 2050
Denmark has met the EU targets for 2020 on renewable energy and targets for greenhouse gas reductions and energy savings. The climate target for the non-quota sectors of 39% in 2030 means that Denmark has committed itself to one of the highest goals in the EU.
Moving towards fossil independence in 2050, the government’s goal is that at least 50% of energy consumption must be green by 2030.
The Danish government will soon present a proposal for a new energy agreement. The proposal will be the government’s bid for how, through a more market-based and cost-effective policy, the government will reach the next ambitious steps in the transition and in relation to the government’s target of at least 50% renewable energy by 2030. The proposal will show an ambitious change of course that will equip the Danish energy system for future challenges. The country will build on its strengths, utilize growth potential, and maintain a high level of security of supply.
With the agreement on the abolition of the PSO tax, the agreement on a new technology-neutral supply model for support for wind and solar in 2018-2019, and the agreed relaxation of the electric heating tax, these are the first steps in a new energy policy area.
So, the government can work towards its long-term goal of a Denmark that is a low-emission society independent of fossil fuels by 2050.
Sustainability and climate must be benchmarks for public procurement for triple-digit billions
Every year, the public sector buys in for DKK 380 billion. DKK – from food in kindergartens, medicine and hospital equipment to cars, construction, and facilities. With a new strategy, the government proposes, among other things, that public vehicles must be green by 2030. The goal is to reduce CO2 emissions and push for the green transition.
As the Danish Finance Minister, Mr. Nicolai Wammen said: “In the future, we must be even better at keeping the climate, environment, and sustainability in mind when we shop.” Denmark is also one of the first countries to set figures for how much green procurement should contribute to reducing Denmark’s total emissions.
Jobs and competitiveness must not be harmed
It is the Danish government’s ambition that its goals are to be achieved in a way that considers Danish jobs and competitiveness and continued high security of supply.
For the sake of a maximum greenhouse gas reduction in the non-quota sectors, the government proposed moving towards a more market-driven and technology-neutral climate policy. Consumers’ and taxpayers’ funds are best spent on a more socio-economically effective reduction of greenhouse gas emissions that consider growth, employment, and competitiveness.
Green transition and economic growth go hand in hand
Denmark has already come a long way in the energy system’s transformation and independence from fossil fuels.
Since 1990, the Danish economy has grown by more than 40%. At the same time, the country has exchanged an increase in greenhouse gas emissions for a decrease. Denmark has thus shown that high growth and green ambitions can go hand in hand.
The share of renewable energy is increasing and today covers more than 30% of energy consumption. Developments in both onshore wind and solar cell capacity have gone much faster than expected after the conclusion of the energy agreement in 2012.
Denmark’s green brand is also creating growth by attracting foreign investment. Denmark’s green energy supply, competitive energy prices, and high security of supply have contributed to Apple choosing to invest billions in new data centers in Viborg and Aabenraa.
Likewise, Facebook has chosen to establish a data center in Odense, and Google has followed suit with the purchase of two large plots in the cities of Fredericia and Aabenraa.
New winds are blowing in the field of energy, and the energy system will continue to undergo major fundamental changes with high costs. Therefore, a continued high level of ambition presupposes a change of course. Denmark is trying to showcase to the world that it is possible to organize a cost-effective energy policy where efforts in relation to the environment and climate go hand in hand with regard to growth, competitiveness, and employment.
The Danish government has entered into different green strategic partnerships, such as a recent one with India. It is working to conclude more green strategic partnership agreements and action plans under existing partnerships with other countries.
The government wants a much more climate-ambitious Danish development cooperation and will implement a reorganization of development aid, where green is central.
The government will reverse global funding flows to support investment in, for example, renewable energy, energy efficiency, and innovative technologies that can put the world on the right track towards climate neutrality by 2050.
The government will strengthen and expand Denmark’s bilateral energy collaborations with some of the world’s largest greenhouse gas emitters. These partnerships create CO2 reductions and contribute to global green transformation.
Lessons from Denmark
Denmark has focused on combining the aspects of green energy, market capitalization, private-public sector partnerships, government legislation, and initiatives to lead in sustainability. Sustainability to Danes means a holistic approach that includes renewable energy, water management, waste recycling, and green transportation, including the bicycling culture.
For growth and green conversion to go hand in hand, it is essential to work towards the fact that it is the market that drives development and that the need for support for green energy is gradually phased out.
In step with increasing amounts of renewable energy—and hence a significant technological development—there has been a massive fall in the prices of solar and wind energy in particular, and this trend is expected to continue.
It is difficult to predict when the relevant technologies will succeed on market terms.