Green energy deal finally in place

The government’s bold energy plan is to become a reality after a large majority of MPs promised support for ending Denmark’s reliance on fossil fuels

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March 23rd, 2012 12:49 pm| by admin
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The future of Denmark’s energy was secured yesterday after the government's energy plan gained the support of seven out of eight parties in parliament.

The plan, which outlines Denmark’s climate and energy policy from 2020 to 2050, will see 35 percent of the nation's energy being produced from renewable sources by 2020, at which point it will be emitting 34 percent less greenhouse gas emissions compared to 1990.

“It is the broadest, greenest and the longest-lasting energy agreement ever to be made in Denmark,” the energy and climate minister, Martin Lidegaard, wrote in a press release. “Today, we are making energy policy history in Denmark.”

The plan also foresees a 12 percent drop in energy consumption by 2020, compared to 2006 levels, at which point half of Danish electricity will be produced by wind power.

The energy plan is designed to end Denmark's reliance on fossil fuels while also positioning it as a leader in green energy technologies. Elements of the plan, such as producing gas from agricultural waste, have been praised by businesses and industrial lobby groups.

Its 3.5 billion kroner cost will be shared by consumers and businesses and lead to an average household paying an additional 1,300 kroner for their energy by 2020, and an extra 200 kroner cost per employee for businesses.

The plan is not universally popular however, as increased prices will only create a greater burden on Danish consumers who, according to Eurostat, are already paying for the most expensive electricity in Europe.

“It is strange and contradictory to, with the one hand, financially support wind energy and then, with the other, pass on the cost to consumers so that it becomes too expensive to use,” Frans Clemmensen, chief economist at the environmental policy think-tank Concito, told Jyllands-Posten newspaper.

Other experts argued that making electricity so expensive created a disincentive to purchase electric cars.

Lidegaard responded by saying that Europe’s oil bill increased by 700 billion kroner between 2010 and 2011, meaning a move away from fossil fuels was needed sooner rather than later.

“Transforming a society from being dependent on fossil fuels to green energy requires investment,” Lidegaard said. “But the costs may be much greater if we do not act in time. At the same time, the transition will benefit the environment and ensure the future competitiveness of Danish businesses.”

The deal was agreed after tough negotiations between the government and the main opposition party Venstre (V), who were mostly critical of the plan’s cost.

V managed to reduce the energy plan’s cost from 5.6 billion kroner to 3.5 billion kroner by scaling down one of the two offshore wind farms that together will produce an extra 1,000 MW of electricity.

V also forced the government not to implement a total ban on the installation of oil furnaces from 2016 in existing homes. The party argued that too many homes in poor regions were too far from district heating alternatives, and would therefore have to pay for expensive geothermal heating systems.

While existing buildings with no other heating alternatives will be able to keep their oil furances, new buildings built from 2013 will not be allowed to instal them.

Liberal Alliance (LA) was the only party to vote against the plan on the grounds that it was enormously costly and would have little effect in the battle against climate change.

“If we want to do something about CO2 emission we need a global agreement,” LA leader Anders Samuelsen told metroXpress newspaper. “Without it, pollution will simply move from country to country. We should instead have used some of the money for research into future energy forms.”

Other critics have pointed out some counter-intuitive consequences of Denmark reducing its carbon footprint. Firstly, the total amount of carbon released in Europe will not necessarily decrease because Denmark will free up carbon credits that other countries can purchase and so increase their own emissions.

And secondly, by stopping the consumption of oil and coal, Denmark is reducing the pressure on these resources, meaning that their price will not rise as quickly and in turn reduce the incentive for others to move to alternative non-carbon sources of energy.

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