Frede Hvelplund

Stability, Participation and Transparency in Renewable Energy Policy: lessons from Denmark and the United States

Abstract The expansion and long-term sustainability of the renewable energy industry will depend on many factors. Energy demand, energy access, energy security, the green collar jobs agenda and climate protection will all drive the industry forward. Public opposition and insufficient financial support can hold it back. To facilitate steady, sustainable growth of the renewable energy market, careful consideration of promotion policies will be necessary to ensure that the inherently distributed nature of renewable energy sources translates into diverse ownership, with broad support. Such support will drive the rapid deployment of these socially and economically beneficial and environmentally necessary technologies. This acceleration can be created through innovative democracy, which attempts to bring all actors into the decision-making process. When considered as a market driver for renewable energy, this equitable, participatory approach must be considered in conjunction with stable financial support schemes which allow diverse actors to engage the market. Lessons from Denmark and the United States show why this combination of conditions is central to the rapid deployment of renewable energy. Policymakers can assess the effectiveness of this approach by analysing which groups benefit most from the design of different policies. The authors suggest several criteria for performing this analysis.

Biogas plants in Denmark: technological and economic developments

Biogas plants are one of the important elements in the Danish energy-policy of having reduced CO2 emissions by 20% by 2005. Since 1984, development efforts concerning centralised biogas plants in Denmark have been carried out, and Denmark now has approximately 20 large centralised biogas plants. All Danish biogas plants have increased gas production as a result of admixing industrial organic wastes with manure. This is predominantly regarded as a great advantage for both biogas plants and waste suppliers. The paper will describe the technological development of this renewable energy source in terms of biogas production prices. The price has dropped dramatically during the last 15 years. Based on this analysis, the paper discusses the socio-economic costs of technology development including state budget and employment effects. Also the paper refers to socio-economic feasibility studies from the early 1990s, when biogas production prices were much higher than natural gas. Still, employment effects made the development feasible in socio-economic terms.

District heating and market economy in Latvia

From the Soviet time Latvia inherited a number of district-heating systems fuelled with Russian natural gas or imported heavy fuel oil. From a fuel efficiency point of view there is no reason to preserve the district heating systems unless the boilers are replaced by CHP. However, 50% of the electricity consumption is imported, and the import prices are low because the production prices in neither Estonia nor Lithuania fully include the long-term capacity costs. Thus, Latvia has two major long-term strategic choices to make: (1) should the country try to reduce the energy demand, and (2) should the country try to replace the import of electricity by domestic production. In implementing the latter solution Latvia could benefit from cogeneration, if the local district heating systems are preserved. This article seeks to form a strategy to develop the use of Latvian wood resources in local cogeneration. Even though cogeneration from a business economic point of view is not feasible with todays import prices, the Latvian balance of payments would benefit immediately from the implementation of such technologies.

Estonian energy system Proposals for the implementation of a cogeneration strategy

Abstract Since the Soviet era Estonia inherited oil-shale-based electricity plants, with a capacity of 3000 MW. Oil shale now provides Estonia with very low electricity prices. However, most of the stations are very old. Half of them were built before 1965, and sooner or later the old oil shale production units will have to be replaced. Estonia will then have to face serious increases in electricity production prices. At the same time Estonia has problems in restoring its district heating systems. The prices are rising and many consumers have converted to other heating sources such as electric heating. The major long-term strategic policy choices to make in Estonia are to decide (1) whether the oil shale power stations should be replaced by new centralized production units such as new oil shale stations or nuclear power, or (2) whether the electricity production should be decentralized. In the centralized solution (oil shale or nuclear power), the domestic heating will be left to boilers or electric heating leading to a very high primary energy supply. In the decentralized solution, Estonia could benefit from the advantage of cogeneration leading to very low fuel consumption. But this latter strategy depends on the restoration of the district heating systems. This article seeks to form a strategy to improve the efficiency of the Estonian energy system by increasing the use of cogeneration.

Does environmental impact assessment really support technological change? Analyzing alternatives to coal-fired power stations in Denmark

Danish energy policy calls for development of decentralized, cleaner technologies to replace conventional power stations and, since 1990, aims to reduce CO2 emissions in 2005 to 20% below their 1988 level. These political goals require a technological change, from conventional, central power stations to cleaner, decentralized technologies such as energy conservation, cogeneration, and renewable energy. In principle, environmental impact assessment (EIA) supports this change on a project-by-project basis. The EU directive on EIA (European Council 1985) was based on the preventive principle: to eliminate pollution source rather than attempting to counteract it subsequently. According to the Danish implementation of the directive, an EIA must review a projects main alternatives and the environmental consequences of the alternatives. If this were done properly, EIAs could assist Denmark in meeting its CO2 reduction goals. However, because EIA is implemented on a restricted, regional basis, it does not support technological change. Responsibility for the preparation of the EIA is given to the regional authorities through a law which does not require alternatives to be assessed that extend geographically beyond the boundaries of a regional authority. Thus, there is no certainty of serious analysis of cleaner technology alternatives to large coal-fired power stations. This conclusion is based on examination of three case studies using a participatory research method.

Making It Personal: Per Capita Carbon Allowances

This chapter presents a scheme to motivate individuals to reduce their carbon emissions from electricity use and other sources. Consequences of global climate change are appearing faster than estimated by the Intergovernmental Panel on Climate Change (IPCC). This highlights the importance of introducing new, efficient schemes for mitigation of global warming. One such scheme is Personal Carbon Allowance (PCA), whereby individuals are allotted a tradable ration of CO 2 emissions per year. The chapter reviews the fundamentals of PCA and analyzes its merits and problems. The United Kingdom and Denmark have been chosen as case studies because the energy situation and the institutional setup are quite different between these two countries. As the chapter concludes, PCA is an idea worthy of serious further consideration. PCA is a promising approach that urgently requires a much greater research effort to see if it could be an important part of future carbon and energy policy.Publisher Summary This chapter presents a scheme to motivate individuals to reduce their carbon emissions from electricity use and other sources. Consequences of global climate change are appearing faster than estimated by the Intergovernmental Panel on Climate Change (IPCC). This highlights the importance of introducing new, efficient schemes for mitigation of global warming. One such scheme is Personal Carbon Allowance (PCA), whereby individuals are allotted a tradable ration of CO2 emissions per year. The chapter reviews the fundamentals of PCA and analyzes its merits and problems. The United Kingdom and Denmark have been chosen as case studies because the energy situation and the institutional setup are quite different between these two countries. As the chapter concludes, PCA is an idea worthy of serious further consideration. PCA is a promising approach that urgently requires a much greater research effort to see if it could be an important part of future carbon and energy policy.

Multilevel policies for radical transition: Governance for a 100% renewable energy system

Transition from the stored energy of fossil fuel-based systems to fluctuating renewable energy sources requires a fundamental change in both the energy supply system and governance arrangements. According to analyses made using the Aalborg University Energy PLAN model, the infrastructure required to handle fluctuating energy – such as goals for further expanding the exploitation of wind power towards 50% of energy consumption – necessitates the integration of power, district heating, transportation and biomass production, which should be geographically distributed. To enhance our understanding of this paradigmatic technological change, this article presents both a general analysis of the regulatory consequences and a specific analysis of the immediate challenges involved in the transition process, framed within the Danish context. The general conclusion is that the required distributed, local and regional technological energy system needs a bottom up and interactive regulatory framework, where the central government should have a more reflexive and communicative role, providing services and national coordination for an energy system that contains a large share of fluctuating renewable energy sources. A specific conclusion is that the present Danish tariff principles and energy tax system should be fundamentally altered in order to better facilitate the coordination of the heat and electricity sectors, to incentivise the creation of the necessary integration infrastructure.

Equity, Economic Growth, and Lifestyle

Publisher Summary This chapter presents proposals for new strategic thinking to overcome present barriers and promote efficient mitigation schemes. It mainly summarizes a new economic paradigm with less attention to GDP and more attention to sustainability and welfare is needed. This involves, among other things, a shift in the present balance between societal planning and commercial market principles to the advantage of long-range planning. Economic science should give high priority to the development of market constructs that lead to sustainable development. The level of the global population is an important factor in relation to global warming. Thus, regulation of birth rates should not be a taboo subject. The chapter also defines the lack of economic and social equity, which is a serious barrier for sustainable development. More equity globally and within nations is needed. Limits to growth on a finite planet should be recognized. It is necessary to change the institutional market conditions in which households are embedded.

Chapter 6 – Analysis: Smart Energy Systems and Infrastructures

This chapter introduces the concept of smart energy systems. As opposed to the smart grid concept, which takes focuses solely on the electricity sector, smart energy systems includes the entire energy system in its approach to identifying suitable energy infrastructure designs and operating strategies. The typical smart grid focus on the electricity sector often leads to the definition of transmission lines, flexible electricity demands, and electricity storage as the primary means to deal with the integration of fluctuating renewable sources. However, due to the intermittent nature of wind power and similar sources, these measures are not very effective or cost-efficient. The most effective and least-cost solutions are found when the electricity sector is combined with the heating sector and/or the transportation sector. Moreover, the combination of electricity and gas infrastructures may play an important role in the design of future renewable energy systems.

Innovative Democracy and Renewable Energy Strategies: A Full-Scale Experiment in Denmark 1976–2010

The development of renewable energy and energy conservation (REC) technologies in Denmark from 1976 and onward is interesting, because two models of political economy have been competing at a time when the Danish energy system is undergoing a transformation. REC systems have increasingly shifted from being minor energy alternatives to becoming the main technologies, while fossil fuel energy systems are increasingly becoming the supplementary options.