GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 4Gross energy consumption by sectorNet energy consumption28%6%1%26%Energy sectorNon-Energy purposesTransportProductionTrade and ServicesHouseholdsPJ200150100Net Energy ConsumptionLocal Losses16%23%5001980 ´85 ´90 ´95 ´00 ´05 ´09Figure 9: The major energy consuming sectors of the Danisheconomy are transportation, production, trade and services, andhouseholds.Source: DEA 2010:18Figure 10: Energy consumption for household heating purposeshas become significantly more efficient since 1980. The highamount of energy consumed however, speaks to the necessityof decarbonizing heating, to achieve the overall objective of thefossil free economy 12Source: DEA 2010:34free goals represents a continuation of trends duringthe first phases of Danish green growth, but the linkageof growth and environmental priorities representsa re-imagining of policy priorities. As renewable energyand clean tech industry investments become a driver ofeconomic growth, the political rationale for investing inthese becomes significantly more robust, and crucially,the policy change occurs under a right-wing government,which has, historically, been more sceptical ofenvironmental priorities and alternative energy sources.The question is no longer whether or not Denmarkshould invest in renewables, but how fast it can, andhow it should, eliminate fossil fuels from the energy mix(Vestergaard 2006). Political resistance to green growthpolicies has virtually disappeared.The recent “Energy Strategy 2050” (published in February,2011) is the latest step toward Denmark’s currentgoal of finally eliminating fossil fuel dependency in theDanish economy, thus achieving the complimentary objectivesof energy security, environmental protection andgreen growth. The policies emerging in the second partof the Danish green growth story can be characterizedunder 4 headings: Support for renewable energy sources,electrification, infrastructure investment, and energy efficiency.(Danish Government 2011)4.2.1 Support for renewable energy sourcesThe policy shift picks up the historic support for renewableenergy and seeks to support further integration ofwind, biomass, and biogas through subsidies, RD&Dsupport, and calls for tenders on two new off shore windfarms (400 + 600 MW). As the rationale for this policy isnow economic growth as well as environmental protectionand energy security, it should be understood againstthe backdrop of the developed clean tech industry thatemerged as a result of the first phases of green growth.Two government studies from 2006 and 2009 investigatingthe “green” business potential in Denmark identifieda cluster of highly competitive clean tech businesses inDenmark producing and exporting “clean” solutions toenvironmental problems.10 As of 2006 the sector comprised720 companies employing roughly 120,000 people,with total added value in the sector amounting to DKK 86billion – roughly 5 % of GDP (Andersen, Bertelsen, andRostend 2006; FORA 2009).11 Export and revenue in thesector have exhibited strong growth rates from 2000-2008compared to the rest of the economy as well as the EU(Danish Government 2010). In other words, Denmarkcurrently enjoys a strong position in parts of the globalclean tech market. This position, in turn becomes interestingpolitically as the demand for green energy globallyis high and projected to increase massively in the future.There is a huge global market potential for clean tech, andinvestments in the sector are projected to increase rapidlyover the next 20 years. (Meilstrup et al. 2010)At this point the integrated Nordic electricity marketsalso deserves mention. The integration of the Nordicelectricity grids (Nordel) enables the further integrationof wind power in Denmark, and has done so historically,by allowing imports of hydropower to offset imbalancesCity-level green policyAnother part of Denmark’s green growth story is the effortsundertaken at the city level. As of 2009, the municipalgovernment of Copenhagen approved a plan to reduceCO2 emissions by 20 % compared to 2005 in 2015and to be CO2-neutral by 2025. The highlights of theplan include support for renewable energy in energy supply(biomass and wind); Influencing the transportationsector by advancing bikes and collective transportation,imposing restrictions on traffic, and supporting energyefficiency in transport; Energy efficiency in buildings;and information activities aimed at behavioral change.(City of Copenhagen 2010)10 For the purposes of the twostudies cited here, clean tech isdivided into technologies aimingto solve 8 distinct environmentalchallenges: climate change; airpollution; water; land use & biodiversity;chemicals in products;land contamination; waste; andraw material use. The survey wasconducted using ‘snowballing’,which implies that there may wellbe companies not identified in thesurvey.11 264 of the surveyed companiesidentified clean tech as a secondaryarea of business; amongstthe remainder of companies cleantech is defined as the primary - notthe sole - area of business. As theavailable data does not allow fora distinction between clean-techgeneratedrevenue and revenuegenerated from other areas ofbusiness, these numbers shouldbe treated with some uncertainty.12 Net consumption equals finalconsumption minus local losses inheating furnaces, etc.13 Electric heat pumps use electricityto produce heat. They are currentlybeing deployed in householdsnot connected to districtheating grids to replace oil furnaces.They are further envisionedto be deployed in district heatinggrids and as an alternative to industryuse of fossil fuels. In all sectorsthey serve the dual purpose ofusing electricity rather than fossilfuels, and providing the abilityfor flexible use of energy, i.e. theability to produce heat when windelectricity production peaks anduse it, when it is needed. (DanishEnergy Association, 2009:16ff)40