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Prudent development - a shared responsibility

13 Energy

Energy consumption and energy supply are paramount activity areas for achieving sustainable development. First, we must curb man-made climate changes and minimise SO₂ and NO_x emissions, which are responsible for environmental acidification. Second, we must secure efficient and stable energy supplies and ensure that the energy area is regulated in a cost-effective manner.

The Government has set the goal of reducing CO₂ emissions to half the 1990 levels by the year 2030. To achieve this, we must reduce total energy consumption, enhance energy efficiency and phase out the use of coal. In addition, we must increase the share of renewable energy by one percentage point annually so that this source of energy comes to account for at least 35 per cent of total energy consumption and for at least 50 per cent of total electricity consumption by 2030. With a view to minimising environmental acidification, Denmark intends to reduce SO₂ emissions by about 30 per cent and NO_x emissions by about 45 per cent compared to the 1998 levels by the end of 2010.

The past ten years have seen solid progress. While enjoying a substantial economic boom during the 1990s, Denmark managed to keep total energy consumption at a fairly constant level. A major reason for this is that we now utilise surplus heat from electricity production more efficiently than previously. Thus, more than 80 per cent of district heating is today co-produced with electricity. But the use of natural gas and renewable energy, not least wind turbines, has also risen steadily during this period. Electricity produced by wind turbines quadrupled from 1994 to 2000, up from about 500 MW to about 2,000 MW. On balance, CO₂ emissions dropped by about 10 per cent between 1990 and 2000. Combined with better fluegas cleaning systems, cleaner energy sources have contributed to a considerable reduction in SO₂ and NO_x emissions from the energy sector.

Denmark has thus achieved a "double decoupling" effect in relation to economic growth. While the economy has grown by more than 25 per cent during the past ten years, energy consumption has remained largely constant. Moreover, not only has the energy consumption level been constant, but Denmark has also succeeded in reducing CO₂ emissions by 10 per cent. In 2000 alone, Denmark managed to bring down CO₂ emissions by 1. 8 per cent, even though the economy showed a 2.9 per cent growth.

These positive results are due to deliberate political prioritisation and not least to a strong, national commitment, which is a prerequisite for extending the use of renewable energy.

Furthermore, Denmark has been successful in increasing the use of combined heat and power (CHP) and renewable energy on a national scale while establishing a number of strong footholds for Danish trade and industry. The wind turbine industry is one example of this combination of environmental considerations, targeted research and development and a forward-looking business sector. This progress resulted in considerable energy exports during the 1990s. In 2001, the Danish wind turbine industry is expected to achieve export sales exceeding DKK 12bn, and total energy exports will reach DKK 30bn. By boosting its environmental assistance during the 1990s, Denmark has provided know-how and sustainable technology to Central and Eastern European as well as developing countries. Danish expertise and technological innovation have thus played important parts in helping to spread sustainable energy supply systems beyond Denmark's borders.

Denmark still has some way to go to reach the national targets set for CO₂ emissions in 2005 and to meet the Kyoto commitments in 2008-2012. But the most recent assessment shows that we are on the right track. We can reach the 2005 targets on the basis of the initiatives adopted so far. Fulfilling the Kyoto commitments in 2008-2012 is also feasible if we sustain our current efforts while simultaneously implementing new initiatives in a number of areas. However, we must face the fact that reaching the targets for 2008-2012 represents only a tentative step towards realising the long-term objectives of stabilising the concentration of atmospheric greenhouse gases at a sustainable level.

To some extent, Denmark has already implemented the "easy solutions" to reducing its energy consumption and CO₂ emissions. Consequently, we should ensure a higher degree of economic efficiency when planning new action and introducing new instruments.

Objectives and activities 2001-2006

We must continue the favourable development set in motion in the energy area. The potential for enhancing the efficiency of energy consumption and for extending the utilisation of renewable energy remains large.

Denmark intends to do its part in reducing global warming. The Government aims to bring down CO₂ emissions by 20 per cent of 1988 levels in 2005. At the same time, the Government will take the initiatives that are necessary for fulfilling our commitments under the Kyoto Protocol, compelling us to reduce total emissions of greenhouse gases by 21 per cent of 1990 levels in 2008- 2012. At a later stage, we will need to set new national and international targets, including much higher reductions after 2012.

The flexible mechanisms provided by the Kyoto Protocol should be employed to the extent that they introduce real improvements to the environment. Denmark will do everything it can to ensure that these flexible mechanisms operate in an environmentally and economically sound manner.

Through national efforts and active cooperation within the EU, the Government intends to develop market-oriented instruments that can help achieve environmental objectives as efficiently as possible. These could be economic instruments such as taxes and tradable permits or other instruments like energy efficiency standards for specific equipment. As part of the electricity reform introduced in 1999, Denmark is required to have fully opened the Danish market from January 2003, thus allowing all consumers to choose their own supplier.

We must base an increasing proportion of our energy needs on renewable energy. Denmark intends to lift the share of renewable energy by one percentage point annually, raising this share to a full 35 per cent of total energy consumption and 50 per cent of total electricity consumption by 2030. The construction of large-scale wind farms and increased utilisation of biomass will help Denmark reach this target. The capacity of offshore wind farms will increase to a total of 4,000 MW. According to plan, offshore wind farms should be capable of producing as much as 750 MW by 2008. Denmark must be utilising at least 1.4m tonnes of biomass by 2005.

At the same time, we must focus on our active research and development in the area of renewable energy, with a view to increasing the use of new alternative energy sources. But we must also develop strategies to regulate the periodical production of surplus electricity generated by rising volumes of heat-bound and wind-dependent electricity production. It has been politically agreed that renewable energy should account for a minimum of 20 per cent of Denmark's electricity consumption as early as 2003. At least 30 per cent of total electricity consumption should be produced from renewable energy sources by 2005.

Nuclear power is not considered a sustainable source of energy.

In this process, the Government has also introduced direct requirements that apply to electricity producers. Denmark is the first country in the world to introduce CO₂ quotas that set a ceiling on total emissions by the electricity sector. Quotas issued in 2001 will reduce these emissions to 22m tonnes. Annual threshold values also exist to restrict the volumes of SO₂ and NO_x that primary power stations are allowed to emit. As part of its efforts to boost energy savings, Denmark introduced new energy savings legislation in 2000, intended to pave the way for better planning, coordination and prioritisation of overall efforts to cut energy consumption. Regionally, local energy savings committees will be set up and all interested parties will be invited to participate. The public sector should also set an example when it comes to saving energy.

Efficient efforts in the energy area are best secured through international cooperation. Denmark will strive to ensure that sustainable energy is strongly represented in EU energy policy and on the global agenda in 2002 and the years ahead. Continued energy cooperation in the Nordic region is also important, not least in the field of electricity. In recent years, higher priority has been given to the development and transfer of expertise and energy technology for use in Central and Eastern Europe and in developing countries. This will remain a key element of Denmark's initiatives to ensure global sustainable development.

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