Svend Auken

SIJ Q&A

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Energy minister says Danes ‘do well by doing good’ BY C ELESTE LE C OMPTE

Svend Auken, Danish Minister of Energy and Environment, traveled to the Pacific Northwest in March to speak with policy and industry leaders about renewable energy opportunities. It wasn’t Auken’s first trip — he attended the University of Washington in Pullman for a year in 1961. With the help of a scholarship travel grant, he purchased two 99-days-for-$99 Greyhound bus tickets and traveled across North America, making stops in 42 states on his way to and from Pullman and New York. His travels introduced him to a broad range of Americans, from small-town farmers in Montana to President John F. Kennedy on his campaign jaunt through California. Auken took a moment from his latest Northwest travel itinerary to talk with SIJ about Denmark’s energy economy and his vision for the future.

SIJ: Denmark is getting a lot of attention lately for its renewable energy industry. Here in the Northwest, there seems to be a similar momentum. Do you have experience to share? SA: This policy of renewables is, in fact, supported very strongly by the Danish public. Today, close to 27 or 28 percent of all our power supply comes from renewables, especially biomass. And that is in addition to wind, which is 21 percent. For the rest we use CHP (combined heat and power) and so we get more energy, green energy, do something for the climate change, something for our local employment. And we make money out of it. Normally, people say you have to choose: either you get prosperous but polluting or you do something about the environment, which you have to pay a hefty price for. Our experience proves that Denmark did not pay a high price for this. Our slogan is, ‘Doing well by doing good.’ We have seen ourselves as pioneers here. Of the world market more than 50 percent of installed wind capacity is Danish technology. And in North America I think we have two-thirds of the North American market. In Canada for instance, it’s close to 90 percent of the market. So it’s a big industry, and it’s also playing a great part in Danish energy supply. On average, 21 percent of our power

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Sustainable Industries Journal

supply is wind, and we have a vision that we will double this share from 21 percent to 40 percent in 10 years, and that means that we will invest in another 3,000 windmills.

SIJ: Three thousand windmills seems like a lot for a small country. How will you get these

“If I were in American government, I’d call the big oil companies and say, ‘You guys get fat now, the people get thin.We need your help.We need your investments.We need your ingenuity – not thinking only of being an oil or coal company, but being an energy company.’”

projects sited? SA: There’s a huge potential offshore ... You avoid some of the conflicts that sometimes will stop your project onshore — like neighbor complaints, unwillingness and hesitancy on part of the public. So with offshore projects, say, five miles out in the water, for instance. We believe that will be a good idea. We have a long coastline, we have shallow waters, and we already have the two biggest offshore wind farms. We’re building an extra two wind farms offshore, and, all together, we will have like 800 MW offshore. The other good idea we have is that we have so many turbines up in the Danish landscape — if we could take them down, replace them by some more productive turbines, then we could allow for people to get a quota three times the capacity they scrap. So we will get fewer but much more effective turbines, increasing total production, but with the added benefit of having fewer turbines for people to look at.

SIJ: There is increasing interest in biofuels in the Northwest. In Denmark’s experience, what do you see as the future for this energy source? SA: I believe it will come, but if you’re using fossil fuels at the rate being done then it’s not quite as promising as it would otherwise be. What we’re trying to do is get down the use of electricity in the refinery process and use renewable energy, and then also to use not corn or grain but straw or wood chips. If you do that, I believe in biofuels. And I think to connect between renewables and biofuels is really the future. But I was a little bit surprised that we actually used 70 percent or 80 percent energy to produce the new energy. That has gone down; the technology is improving all the time. But I want to combine renewables with biofuels. Then I believe that’s part of the future. SIJ: How do we encourage these technologies’ growth? SA: For oil companies, that’s my vision: they should become energy companies. We know that their profits, with oil prices reaching $55 to $56 — and nobody believes it will come below $40 — most of their investments were made on the basis of an expected oil price of $20 to

SIJ Q&A

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$21 per barrel. Now they’re getting two-and-a-half times that. That means that when all costs are paid, they have a tremendous windfall. But their reserves will be depleted in the future. In addition to being more effective and better in the search for new finds, they should be enticed to, encouraged to, invest in new sources of energy.

SIJ: Globally, have there been oil companies that have taken the initiative on other forms of energy development? SA: We know that Shell is working together with the Danish wind industry. They are working on the research, the sites and so forth, together with Vestas, the world’s biggest producer of wind turbines. We know that BP is talking a lot on doing something in solar. But if you ask me, I think the progress has been too slow. I think that governments have not been persuasive enough in having them really divert or diversify their efforts. SIJ: What do you think it would take to implement that? SA: It’s hard to say, but it’s a national dialogue. I think that if I were in American government, I’d call all the big oil companies and say, ‘You guys get fat now, the people get thin. We need your help. We need your investments. We need your ingenuity — not thinking only of being an oil or coal company, but being an energy company.’ The second thing I pointed out was for consumers to be involved. Now, in my country, the extra environment reward is paid for by the consumers. If you did the same in the United States, it would cost each household say like $40. And then that takes it out of tax picture of the government. It’s still such a small amount that I think if people know this brings us new jobs, new possibilities, here, new energy, and at the same time benefits the climate, the environment, and it will only cost me $40 per year? I think people will accept it.

SIJ: One of the barriers that we seem to be coming across in the United States is the cost of transmission. Has this been an issue in Europe? SA: It has not, because we have forced the people to free access, non-discriminatory access, and we have put it on the transmission companies to make the necessary investments and then they pass on the bill to the consumers. So in that way also the consumers pay. I think that transmission should be like your freeways. If you want to have competition, the freeways should be open to any transport company, the same way that the grid should be there and open up for competition between nuclear energy, thermal energy, and wind energy. SIJ: What about CHP?

Danes do it better, but Finns do it best ESI Rank

Country

Score

1 2 3 4 5 6 7 26 33 45 133 146

Finland Norway Uruguay Sweden Iceland Canada Switzerland Denmark Russia United States China North Korea

75.1 73.4 71.8 71.7 70.8 64.4 63.7 58.2 56.1 52.9 38.6 29.2

SOURCE: 2005 Environmental Sustainability Index. www.yale.edu/esi

Therefore, for instance, even though we have a much more proactive environment policy than Finland, the same size populations we have, but a country 20 times as big, but if you look at the criteria going into it, you have undisturbed nature. We can never have undisturbed nature the same way you have here. I mean all trees in Denmark are planted, one way or another. On all the other parameters we do very very well. But we don’t do well on the undisturbed nature, untouched nature. It used to be that our life expectancy was not as good, because women were much more active. We have the same [workforce] participation rate as men, and women on the labor market are subjected to many of the same stress factors and so forth. And therefore we have a lower life expectancy for women than most other countries have. But that has been corrected. It has increased two years over the last eight or nine years.

SA: CHP is a fantastic program. It’s my view that if we just use the CHP potential of the European Union, for instance, we could meet our requirements under the Kyoto Protocol just by doing that. If you look at how much fuel goes into producing heat and how much goes to the same amount of power if you produce them separately, compared to if you combine the production, then you save 38 percent of the fuel. In Denmark, we say that all central power stations should produce heat, and we say to the local district heating projects that they shall also be producing power. That has been carried on now for more than 10 years, and that means today something like 60 percent of the house heating market and industry heating market is done by CHP. In the wintertime, we produce electricity as a by-product. The heating needs are the most important — and then you have the power.

SIJ: Are there areas where Denmark isn’t as sustainable as you’d like? SA: Agriculture, for instance. There’s a lot of conflict between modern agriculture in a small country like ours and our interest in preserving our streams and lakes. Our nature is getting too fat. It is being fertilized by nitrates and phosphates and whatnot from modern ag. How can we get the over-nourishment of Danish soil down? For some of our most fascinating species are living in [habitats] that are, if not undernourished, strained for nourishment. This is another huge challenge we have: transport. Not nearly as bad as here, but in terms of sustainable living, transport is out of control. We were supposed to reduce, for instance, CO2 emissions. By 2020 we expected to reduce by 20 percent. In fact, it’s gone up by 15 percent. So that’s a big challenge.

SIJ: Did that kind of legislation require new infrastructure development as well? SA: Yes. To put the pipes in the ground, that’s the upfront investment. In order to make a big leap forward, we subsidized these new pipes by using the revenue from our CO2 tax to finance this project. Now in fact we are making money out of it, but that’s what’s prohibitive about it — it requires a big upfront investment in these big pipes. If you plan it in new developments, it’s advantageous.

SIJ: Has your experience taught you ways to meet these challenges? SA: Because something is economically wise and long-term beneficial and may even create jobs, there will be pains. So work with local communities is key — especially to have local people explain to local people. What I always said to my people in Copenhagen is, talk to them as you would talk to your own neighbors, to your family, and so forth. And get them to share your vision, and you get to share their problems with them. Then you can move them. But the second they feel that you talk down to them, talk in simplistic terms and say that they underestimate all this, you lose them. It’s also important that you stand your ground, that you’re not pushed around. And on top of that, a little money always helps. G

SIJ: Denmark, despite its good track record, is not one of the top countries in the international sustainability index. Why is that? SA: That’s a flaw with the sustainability thing. Because [they] give a big premium to countries with open spaces — and you can never achieve that in a small country.

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