Case Study

Transformational Change: Danish 100% Renewable Energy Policy

12am, October 01st, 2018
Denmark, Europe and Central Asia

Danish energy policy mandates the complete phase-out of fossil fuels in the energy supply by 2050. In the long term, electricity, heating, industry and transport energy are to be provided entirely by renewable sources. In the medium term, the 2012 Energy Agreement sets targets of 35% renewable energy in final energy consumption, approximately 50% of electricity consumption supplied by wind power, and a 7,6% reduction in gross energy consumption (in relation to 2010) by 2020. (Danish Ministry of Energy, Utilities and Climate – EFKM, 2012).

Denmark’s energy model offers lessons on how an energy system can be radically changed through sectoral planning, private sector involvement and wide-reaching reforms. Denmark’s highly ambitious energy strategy is supported by a large majority in the Danish Parliament and sets an integrated framework for a transition to a society independent of fossil fuels, providing both long and medium term targets based on technical analysis and a participatory stakeholder process. The energy model provides a diverse set of instruments and mechanisms to achieve system-wide change that is aligned with national climate and economic growth strategies, and leverages public and private investment.

Key Impact

Denmark’s energy strategy has system-wide, long-term impacts, including emission reductions, increased energy independence and security of supply, and socio-economic benefits associated with the growth of the green tech industry.

The Danish Energy Agency’s Baseline Projection 2014 shows that the transition to a decarbonised energy system is accelerating (EFKM, 2015):

  • By 2020, fossil fuel consumption will be reduced by an estimated 20% and the contribution from coal will fall by 57%;
  • The expansion of wind power and conversion of CHP plants to biomass will lead to a share of renewable energy sources in electricity consumption of 71% in 2020 (compared to 43% in 2012).
  • The use of fossil fuels in electricity will be reduced from 84% in 2000 to 29% in 2020;
  • By 2020, gross energy consumption will decrease by 4% due to efficiency improvements in electricity and district heating, buildings and appliances. Energy consumption and CO 2 emissions in the road transport sector will decrease due to lower growth and the promotion of less energy-intensive technologies;
  • The consumption of renewable energy will rise by 47% by 2020 as a result of growing offshore wind farms and increased use of biomass, biogas and liquid biofuels for transport. The renewable energy share will rise from 26% in 2012 to 38% in 2020;
  • With the initiatives already taken, GHG emissions will be reduced significantly by 37%, falling slightly short of Denmark’s target of 40% in 2020 (vs. 1990 level), but exceeding EU targets.

Denmark’s investment in efficiency and renewable energy may reduce the cost of energy, exposure to fluctuations in fuel prices and to the development of new products and industries, benefitting the Danish economy. In 2013, Denmark produced green products and services for EUR 22bn, mainly related to renewable energy and energy efficiency. The green sector employs approximately 58,000 people and export of wind energy technology accounted for more than EUR 6.5bn in 2013. (ENS, 2015b: 3)

Institutions Involved

Energy Agreements are negotiated between the Danish Ministry of Energy, Utilities and Climate (EFKM), the Ministry of Finance, the Ministry of Taxation and the Ministry of Environment and Food (for instance regarding the planning perspective of offshore wind).

Source Details

Global Good Practice Analysis (GIZ UNDP)