Denmark is moving convincingly on decarbonisation

COPENHAGEN– Denmark remains a global leader in decarbonising its economy and is on track to meet its ambitious goal of becoming a low-carbon economy by the middle of the century, according to the International Energy Agency’s latest reviews of the country’s energy policies.

Denmark has a long tradition of setting ambitious national energy targets, based on nation-wide Energy Agreements. In 2030, it aims for renewables to cover at least half of the country’s total energy consumption. By 2050, Denmark aims to be a low-carbon society independent of fossil fuels. The IEA’s latest review of Denmark’s energy policies finds it is moving convincingly to meet these world-leading targets.

The growing share of wind power creates new challenges and opportunities for the Danish electricity and heating sectors, as well as for end-use sectors such as transport, buildings and industry. This review of Denmark’s energy policy has a special focus on two interrelated issues: how to increase the share of renewables in the power system beyond its current share of 45%, and how to decarbonise the heating sector. These two areas are critical for further advancing decarbonisation in Denmark and they also offer an attractive potential for energy system integration. The report also offers a series of recommendations.

Electricity generation in Denmark has changed fundamentally over the past two decades. Coal generation has been steadily replaced, and the bulk of power generation now comes from wind and bioenergy. Since the previous in-depth review in 2011, Denmark has made impressive progress towards decarbonising its energy sector while maintaining robust security of supply. Denmark’s energy intensity and carbon intensity are among the lowest of all IEA member countries.

The country has also become a world leader in system integration of variable renewable energy (VRE); it has the highest share of wind power in electricity generation, and electricity supply is stable and secure at both transmission and distribution levels. Denmark is also among the global leaders in using energy-efficient technologies, including combined heat and power (CHP), which provides half the electricity and two-thirds of heat sold in the country.

“It is highly encouraging to see that wind power is becoming market competitive,” said Paul Simons, the IEA Deputy Executive Director, who presented the report in Denmark. “Tapping into the large offshore wind resource will help Denmark decarbonise even further.”

“Denmark is now widely recognised as a global leader in integrating variable renewable energy while at the same time maintaining a highly reliable and secure electricity system, thanks to a flexible domestic power system and a high level of cross-border connections,” said Mr Simons.

The heating sector is also critical for Denmark’s low-carbon ambitions. Denmark is already switching from coal to biomass in district heating, and is favouring renewables over oil and natural gas in individual heating. These trends will have to continue in order for Denmark to meet its targets.

Denmark’s large-scale use of combined heat and power plants with heat storage capacity, and the increasing deployment of wind power offer great potential for efficient integration of heat and electricity systems, for example through large heat pumps. Smart policies and measures are essential to realise that potential at least cost. Finding the right levels of taxation for fuels and electricity is particularly important.

Energy-related CO₂ emissions are declining overall, thanks to a combination of energy efficiency improvements and fuel switching to renewables. As in all countries, more needs to be done to limit emissions from transport.