Denamrks lofty energy goals

Denmark recently introduced an agreement with broad backing between all but one party. The agreement sets a strategic goal to produce one hundred percent of Denmark's electrical grid power from renewable sources. Generation from wind will play a central part in this vision of the future, but solar, bio-fuel incineration and some geothermal sources will be featured in Denmark's energy strategy. Mark that word, because it is central to understanding what is happening in Denmark right now.

The agreement is yet to pass into law, but with such wide backing, it is but a formality in the parliament to pass this strategy into law, secure financing for up to 2020. Following the bill passing into law, ministers will write policy to enact the law. This will take a few years to complete. The policies must be precise and each must have minimal effect on all other areas, so they are exceptionally long winded. While this is happening, counter arguments for natural gas will be heard. Bjorn Lomborg, author of the Skeptical Environmentalist, a highly criticized book, argues Denmark should instead invest in natural gas and close down heavily polluting coal burning power plants. His criticism (PDF) first notes why Denmark's strategy is ineffective in reducing Europe's CO2 emissions, stating other countries will be allowed to take Denmark's CO2 reduction and produce energy from cheaper coal and oil sources. He says this with the cavet, that the agreements over EU's CO2 reduction strategy doesn't encompass bio-mass and in this one area, Denmark will see a positive CO2 reduction. His second criticism makes use of economic models to calculate the true price of the project, calculating it to 10,000kr per family per year, significantly higher than the price tag the parties have so far stated.

However, these criticisms slip by the central point to this new strategy; Denmark desires to be completely independent of fluctuating oil prices. It is the prime motive to this new strategy, so CO2 reductions are not a big deal to those pushing the new plan. Shale gas, said to be the new bounty of energy, is also discounted as it is too unreliable. Martin Lidegaard thinks its price can fluctuate just as wildly as oil and is of unknown quantity. Poland is referenced, having paraded shale gas as a new major source of energy for the country, only to reduce its estimates and ambitions when the extent of shale gas held in the country were downgraded.

Predicting the future of energy in Denmark is a wild guessing game at this point. Until laws are passed, policies written and projects funded, this strategy can envoke many tactics and the outcomes can be drastically different from each other. Mr.Lomborg may yet convince the government about the benefits of natural gas before wind energy.

Coalition agreement on Wind Energy; The Poor Pay

With a coalition consisting of all but one party, Liberal Alliance, Denmark's parliament had reached an agreement through 2050 to develop wind energy production, so 50% of electricity is produced by wind farms in Denmark by 2050 and financed through 2020 with excise taxes on central heating. This sets the stage for a transformation of Denmark's industries, providing a huge boost for companies like Vestas, who produce windmills and fulfill a large portion of the worlds demand in wind energy, but face competition from companies in China and India. Denmark will become a world leader, not in production of the windmills, but in taking the leap from coal and oil to renewable and independence from foreign energy. That last 50% will not seem like a major hurdle afterward. This article is however critical of the agreement and will cover two points; how this agreement will be financed and the mystic influence the Red-Green Party, Enheds Listen (Literal translation: The Unity Party).

While this seems like an ambitious plan for Denmark and should benefit everyone, the burden of finance is carried by the lower class, because the transport sector, cars and trucks, and furnaces, typically of the wood burning variety found in upper middle class and on the way up homes, are exempt. Central heating is more common in apartments, small town homes in the incorporated part of a city and the public sector. Collective energy production is more often used, and financed, by the lower class in Denmark. In effect, exempting private energy from any taxes, including cars, taxes specifically the people who already are economically stressed.

There are two dangers in financing such a reformation with revenue solely from the lower class. If unemployment goes up again, capital to finance this energy reformation will dry up and work will come to a halt. While everyone needs to heat their homes, people will turn down the radiator to save a little money here and there. The effects on local economies can also be traced directly back to funding short falls.

Wind farms are a collection of windmills in an area considered prime for wind energy production and put to the side specifically for that purpose. Wind farms can be found out at sea or on land and sometimes on agricultural farms. Projects to construct windmill installations can create hundreds of jobs in the local economy for years. This breath of life in the local economy can lift the standard of living for the area and continued growth after the project is completed can be expected. However, if funding for a project is cut before it is complete and people are suddenly and unexpectedly out of a job, investments made in the local economy can be lost. This lost investment, which could have gone to other projects that return the investment, adds insult to injury. Along with the lost jobs, further funding for the transformation evaporates and other projects will come to a halt. It is called an economic bubble.

The second point of this post is a question. What did the Red-Green party do exactly? They have participated in the negotiations, but kept their contribution behind closed doors. Why?

The Electric Age

You will often read or hear in the news stories about smart grids, energy diversity, green houses gasses or oil imports. These are stories about energy concerns relevant to national interests. You do not hear about the 1.3 billion people who do not have access to electricity,or how delivering power to those who do not will change the world, or from what we should use to produce power for these people. More importantly, we do not hear about how lack of access to electricity prohibits the use of fundamental infrastructure such as lighting, cooling or heating or industrial applications that can create jobs in poor rural areas. Communication is also limited to what can be done without modern tools.