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Creating a Steady Path for a Low Carbon Transition: A Case Study

Published on 02 May 2016  |   Written by    |   Be the first to comment!

On March 17, the American Council On Renewable Energy (ACORE) hosted its annual Renewable Energy Policy Forum, where speakers and attendees came to a broad consensus that consistent policy is the missing link in the national renewable energy playing field. Industry leaders noted that many had looked to the Clean Power Plan (CPP) as a source for political guidance. However, now that the climate rule has been put on hold, uncertainty remains. Senator Ron Wyden (D-OR) affirmed that the recent tax extenders for wind and solar will allow for the renewable industry to strategically prepare for upcoming years. But in order to achieve a more stable tableau for all renewables, Congress must agree on comprehensive tax reform – the Senator called the current tax code “a rotting dead carcass” and a “monument to yesteryear.” Business leaders also agreed that even negative consistent policy is preferable to inconsistency – and long-term consistent policy is not yet part of the American play book. 

 Contrary to the United States, Denmark has followed a steady path over the last four decades, focusing first on energy independence, followed by the implementation of renewables. The Danish Energy Example emphasizes that by “persistent and active energy policy focus[ed] on enhanced energy efficiency, it is possible to sustain high economic growth and at the same time reduce fossil fuel dependency and protect the environment.” The oil crises in the 1970s, when Denmark was almost entirely dependent on foreign sources, lead the country to formulate definitive energy policies.

One of the lynch pins of the Danish transformation has been a focus on efficiency and using combined heat and power (CHP). During the 1970s and 1980s, most Danish municipalities created their own energy plans. The 1986 Co-generated Heat and Electricity Agreement prioritized CHP – meaning that the excess heat from power generation was used to heat buildings and homes in cities, towns and villages. CHP reaches around 80% efficiency using any fuel source. Today, there are CHP operations that use trash, biomass, solar, wind, geothermal and even some that still use natural gas or coal. Across Denmark, a wide variety of renewables provide a flexible network both in urban and rural areas. Straw burners have been used on farms to heat buildings for decades. More recently, recycled vegetable oil, canola and other kinds of biomass have also gained popularity.

The stage is now set for the next generation of clean energy policies, established in the Agreement of 2012. Denmark anticipates that 70% of its power will be generated by renewables by 2020. And the agreement outlines 62 actions in the various energy sectors, with a goal of creating an economy free of fossil fuels by 2050. This goal is not dependent on new technology, but it does rely on continuous innovation. For example, the first tiny wind turbines are still running in Jutland alongside the monster 10 megawatt turbines now being tested. While transportation (i.e. cars and trucks) are still problematic, a high tax on cars consuming a great deal of gasoline makes for cars obtaining 40-60 miles per gallon. There is also no tax on electric vehicles to encourage their adoption.

Consistent policy – from the 1970s until today – is significantly responsible for Denmark’s clean energy progress. A majority of parties and various Danish governments have joined in support – amazing by American standards since, at times, Denmark has had about 25 parties in parliament and currently consists of nine parties after the election in June of 2015. Moreover, Danish companies quickly adopted greater energy efficiency and renewable sources. With several companies in the wind industry coming from the agriculture sector (including Vestas), the drive for renewables also helped Denmark transition from agriculture to green industry – although it must be noted that there are still five times more pigs than people. In the economic downturn, renewable energy exports ameliorated the negative impact on Denmark. Danish companies have a global competitive advantage in green products because they embraced, rather than fought, innovation.

Finally, during these four decades, Denmark’s economic growth rate has keep pace with other industrialized countries – but Denmark has a cleaner environment and is positioned to be fossil fuel free in 35 years.

Mary Paul (Smith) Jespersen

Mary Paul Smith Jespersen has been at the Embassy of Denmark in Washington for 8 years working with energy and environment issues.  She is a former Foreign Service Officer and received a Masters degree from The London School of Economics and Political Science.  She also lived in Denmark for 22 years.  The opinions expressed are her own and not those of any government.

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