Danish lessons for Ireland on the green-tech economy

Comparisons have often been drawn between Ireland and Denmark because of our similar size and strong agricultural heritage, amongst other things. One area in which Denmark is currently making significant progress is in development of a green-tech economy. Denmark has set itself an ambitious target of being the first country in the world to be independent of fossil fuel dependency, a journey it aims to complete by 2050.

Seemingly well on the way, there are lessons for Ireland from Denmark's experience, according to Finn Mortensen, one of the speakers at the Irish Wind Energy Association conference later this week.

Mortensen, a former business editor of Denmark's leading broadsheet newspaper Berlingske Tidende, runs State of Green, a branding organisation that co-ordinates national and international marketing and educational activities and fosters relationships between Denmark's green players.

Gaining public acceptance for green initiatives is the foundation on which to build, Mortensen says, admitting that Ireland may find this a little harder than his native country.

"Denmark was hit hard by the energy crisis in 1973 at a time when we were totally dependent on imported energy, 95 per cent of it being oil from Saudi Arabia. That galvanised opinion around promoting renewables and energy efficiency and there has been consistently high public support for that approach ever since."

Cross-party support – with over 95 per cent of politicians backing Government green energy initiatives – has meant that policymakers, the private sector and consumers have been able to plan for long- term strategies and programmes, regardless of changes in power.

There have also been clever laws introduced to share the benefits of renewables such as wind. If you live within 2km of a wind turbine, for example, you can purchase a stake in it at cost price. Promoters – often co-ops – have to offer a 20 per cent share of the project to those living in the neighbourhood and close to 100,000 Danes have exercised this option to date.

“When you see the wind blowing in your neighbourhood and the turbines moving, you know that you are making money, which is great incentive to support wind power,” Mortensen observes, adding that polls show around 90 per cent of Danes are in favour of increasing wind energy production.

The outcomes to date are impressive. Denmark is now generating close to 40 per cent of its annual electricity needs from wind and on some days production reaches as high as 120 per cent of needs. An efficient market exchange operates with its neighbours in Germany, Norway and Sweden to take advantage of fluctuating supply and demand, as dictated by weather conditions.

Wind now accounts for 4.8GW of production, of which some 3.5GW is offshore. The aim is to increase this by another 1.5GW by 2020. Employment in Denmark’s wind energy sector is now close to 30,000.

Since 1980, the Danish economy has grown by 80 per cent, yet there has been no increase in energy consumption. The national energy bill equated to 14 per cent of GDP in 1973 and is around 5 per cent of GDP today.

Biomass is also a significant part of Denmark’s energy mix. Electricity plants have been converted into combined power plants and have the flexibility to be converted from coal-burning to biomass within 30 minutes. Taxation policy has also been aligned with a renewables agenda, with the government keeping taxes on fossil fuels high despite falling oil prices. “Tax has been used as an instrument to make people aware of the true cost of choices in the broadest sense,” Mortensen notes.

Stick has been met with carrot, with incentives schemes for energy efficiency. These have generally worked well with the exception of one, a government programme that offered very generous incentives for domestic solar power panel installation. Ironically, too many Danes embraced it when supermarkets began selling cheap kits, with some 70,000 installing panels in 2012 alone, and the scheme was scrapped in 2013 on economic grounds, he explains.

A key part of State of Green is promoting Denmark’s expertise in green tech to the wider world. This includes educational initiatives and partnerships with foreign governments, including the Chinese government, in a programme to phase out fossil fuel usage by 2050 that could have enormously positive global impacts.

In the meantime, Denmark itself is reaping the benefits of its enhanced green reputation. One of its more significant FDI announcements was that it was to be one of two locations for Apple's two new giant data centres In Europe, with renewable clean tech lying at the heart of its operations. The other centre of course is being built in Athenry, Co Galway.