Identifier
Created
Classification
Origin
08COPENHAGEN169
2008-03-25 12:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Copenhagen
Cable title:
NEW DANISH ENERGY POLICY BOOSTS RENEWABLES
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UNCLAS SECTION 01 OF 02 COPENHAGEN 000169
SIPDIS
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: KGHG SENV ENRG SENV EUN DA
SUBJECT: NEW DANISH ENERGY POLICY BOOSTS RENEWABLES
UNCLAS SECTION 01 OF 02 COPENHAGEN 000169
SIPDIS
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: KGHG SENV ENRG SENV EUN DA
SUBJECT: NEW DANISH ENERGY POLICY BOOSTS RENEWABLES
1. (SBU) Summary: After more than a year of political
negotiations, Denmark's government has reached agreement within
parliament to meet the EU's energy targets and boost its renewable
energy share to 30 percent by 2020, from the current level of 16
percent. The new policy formalizes Denmark's commitment and is one
of several initiatives to show leadership on climate change issues
in the run-up to hosting the UN climate summit (COP-15) in
Copenhagen in December 2009. Prime Minister Rasmussen's recent
climate-focused trip to India was another. End Summary.
2. (U) On February 21, the Danish government reached agreement with
seven political parties in Parliament (all except the minor Unity
List party) regarding energy policy. The settlement mainly covers
the period corresponding to the Fogh Rasmussen government's tenure
through 2011; some initiatives have a longer horizon.
3. (U) The policy's stated objective is to reduce Denmark's
dependency on fossil fuels (currently at 83 percent of total gross
energy consumption) for environmental and energy security reasons,
with an ultimate goal of independence from fossil fuels in the long
term. The policy incorporates measures addressing renewable energy,
energy savings and efficiency; and transportation.
Renewable Energy Boosted
--------------
3. (U) In addition to stating that it will meet the target agreed
by the EU (most likely 30 percent renewable energy by 2020 for
Denmark),the Danish policy targets an interim increase to 20
percent by 2011. To do so, Denmark will increase its subsidies for
wind power production and mandate compensation by wind turbine
owners to property owners whose property values decline due to
installation of new wind turbines. Two new 200 MW offshore wind
parks are planned to open off the Danish coast in 2012.
4. (U) Besides wind, Denmark has focused on increasing the use of
biomass in power plants, mainly by increasing subsidies for
electricity generated from biomass. Funds to implement other
renewable energy sources, such as solar and wave technologies, will
also be increased, by approximately $5 million annually. Finally,
all renewable energy legislation will be merged into a single
comprehensive framework.
New Energy Efficiency Goals
--------------
5. (U) The new policy extends current efforts to increase the
energy efficiency, mandating a reduction of gross energy consumption
by 2 percent by 2011 (from a base year of 2006) and by 4 percent in
2020. Energy efficiency requirements for newly constructed
buildings will be tightened gradually through 2020. Denmark will
also establish a new energy savings information center and increase
government funding for research, development and demonstration of
more efficient energy technologies. Danish CO2-taxes will be
increased and a new NOx-tax will be imposed starting in 2010.
Transportation
--------------
6. (U) The transport sector currently generates 31 percent of
Denmark's CO2 emissions, but is not included in the EU emissions cap
and trade system. The new policy mandates an increase in renewable
energy fuels for transport to 5.75 percent (from close to zero
today) by 2010 and 10 percent by 2020. The new fuels are not
specified, but must be "adequately socio-economically competitive
and environmentally sustainable." Hydrogen-powered cars will be
exempt from taxes and the sunset date for the current tax exemption
for electric cars will be extended by three years to 2012. In the
fall of 2008, the Minister for Transport Carina Christensen is
charged to present a more detailed strategy outlining how to reduce
CO2 emissions in the transport sector.
Industry Reacts Cautiously
--------------
7. (U) The Confederation of Danish Industries (DI) welcomed the
political agreement, while expressing concern over implementation.
Helle Juhler, DI's special advisor on energy and climate matters,
declared "the current scheme, in which many of the costs are put on
the businesses, is not sustainable in the long run. It will be a
COPENHAGEN 00000169 002 OF 002
big challenge to come up with a model that can finance the 2020
energy and climate targets." Lars Aagaard, Deputy Director of the
Danish Energy Association (representing the power company
interests),said "the agreement reached has much to recommend it, as
it eliminates large parts of the gap between Danish and European
energy and climate policies. This agreement means that far more
will need to be saved on energy, and that the energy companies will
be at the heart of this effort. We are ready to negotiate the
implementation with the government."
Spreading the Energy Gospel
--------------
8. (U) Energy and climate issues are very high on the political
agenda in Denmark, with Denmark preparing to host the COP-15 climate
summit in December 2009. Eager to position Denmark for success at
the summit, Prime Minister Anders Fogh Rasmussen and Minister for
Climate and Energy Connie Hedegaard are stepping up Denmark's
climate diplomacy efforts abroad, spreading the Danish gospel that
economic growth can be decoupled from energy consumption. They cite
statistics demonstrating impressive economic growth, with hardly any
increase in energy consumption.
9. (U) Minister Hedegaard actively promoted Denmark's role as host
of COP-15 while in Washington on March 4-6 for the WIREC conference.
Hedegaard spoke at the Joint Ministerial-Stakeholder plenary
"Straight Talk" Session and hosted an official Danish side event
about renewable energy technology deployment. The Danish Minister
also conducted bilateral meetings with U/S Dobriansky, CEQ Chair
Connaughton and NSA Price, Senator Boxer and DOE A/S Karsner.
10. (U) Shortly after assuming her post in November 2007, Hedegaard
declared that Denmark's role as the host of the COP-15 at the Bali
meetings will be to push governments to commit to an agreement in
Copenhagen, but also to seek broad agreements and to join forces and
interests. The minister's main priority is to get the U.S. on board
as an active participant, she said, expressing optimism that China
might be willing to move ahead faster than expected and "show big
surprises," and said Denmark also intended to closely with India,
Mexico, Brazil and Argentina. To bolster Denmark's presence
overseas, Hedegaard has announced plans to appoint Danish climate
attaches in five key countries, most likely including in the U.S.,
China and India.
But Treading Lightly with India
--------------
11. (U) During a February visit to the Delhi Sustainable
Development Summit, PM Rasmussen stressed the importance of
recognizing the need for including developing countries in a new
global climate agreement to be penned in Copenhagen in December
2009. Rasmussen publicly recognized that developing economies like
India's might contribute under an international agreement by
concentrating on making efficiency gains in lieu of capping their
energy consumption. Indian PM Singh reportedly pledged that India's
per capita greenhouse gas emissions would never exceed Denmark's.
Comment
--------------
12. (SBU) The government's efforts to burnish its green credentials
abroad are popular at home, but have not been cost-free. The
opposition has accused Rasmussen of overselling his government's
responsibility for Denmark's long term progress, begun under the
previous government. They charge that under the Rasmussen
government Danish CO2 emissions and energy consumption have begun to
rise, and new wind power deployment has been largely frozen.
18. (SBU) Perhaps to answer this criticism, the government recently
established an advisory climate commission composed of prominent
energy and climate experts and economists. The commission, headed
by Amcit Katharine Richardson of Aarhus University, is charged with
suggesting further ways to eliminate Denmark's dependency on oil and
coal in line with the government's long term targets. We will
engage with Richardson and continue to follow Denmark's preparations
to host COP-15 closely.
CAIN
SIPDIS
SIPDIS
SENSITIVE
E.O. 12958: N/A
TAGS: KGHG SENV ENRG SENV EUN DA
SUBJECT: NEW DANISH ENERGY POLICY BOOSTS RENEWABLES
1. (SBU) Summary: After more than a year of political
negotiations, Denmark's government has reached agreement within
parliament to meet the EU's energy targets and boost its renewable
energy share to 30 percent by 2020, from the current level of 16
percent. The new policy formalizes Denmark's commitment and is one
of several initiatives to show leadership on climate change issues
in the run-up to hosting the UN climate summit (COP-15) in
Copenhagen in December 2009. Prime Minister Rasmussen's recent
climate-focused trip to India was another. End Summary.
2. (U) On February 21, the Danish government reached agreement with
seven political parties in Parliament (all except the minor Unity
List party) regarding energy policy. The settlement mainly covers
the period corresponding to the Fogh Rasmussen government's tenure
through 2011; some initiatives have a longer horizon.
3. (U) The policy's stated objective is to reduce Denmark's
dependency on fossil fuels (currently at 83 percent of total gross
energy consumption) for environmental and energy security reasons,
with an ultimate goal of independence from fossil fuels in the long
term. The policy incorporates measures addressing renewable energy,
energy savings and efficiency; and transportation.
Renewable Energy Boosted
--------------
3. (U) In addition to stating that it will meet the target agreed
by the EU (most likely 30 percent renewable energy by 2020 for
Denmark),the Danish policy targets an interim increase to 20
percent by 2011. To do so, Denmark will increase its subsidies for
wind power production and mandate compensation by wind turbine
owners to property owners whose property values decline due to
installation of new wind turbines. Two new 200 MW offshore wind
parks are planned to open off the Danish coast in 2012.
4. (U) Besides wind, Denmark has focused on increasing the use of
biomass in power plants, mainly by increasing subsidies for
electricity generated from biomass. Funds to implement other
renewable energy sources, such as solar and wave technologies, will
also be increased, by approximately $5 million annually. Finally,
all renewable energy legislation will be merged into a single
comprehensive framework.
New Energy Efficiency Goals
--------------
5. (U) The new policy extends current efforts to increase the
energy efficiency, mandating a reduction of gross energy consumption
by 2 percent by 2011 (from a base year of 2006) and by 4 percent in
2020. Energy efficiency requirements for newly constructed
buildings will be tightened gradually through 2020. Denmark will
also establish a new energy savings information center and increase
government funding for research, development and demonstration of
more efficient energy technologies. Danish CO2-taxes will be
increased and a new NOx-tax will be imposed starting in 2010.
Transportation
--------------
6. (U) The transport sector currently generates 31 percent of
Denmark's CO2 emissions, but is not included in the EU emissions cap
and trade system. The new policy mandates an increase in renewable
energy fuels for transport to 5.75 percent (from close to zero
today) by 2010 and 10 percent by 2020. The new fuels are not
specified, but must be "adequately socio-economically competitive
and environmentally sustainable." Hydrogen-powered cars will be
exempt from taxes and the sunset date for the current tax exemption
for electric cars will be extended by three years to 2012. In the
fall of 2008, the Minister for Transport Carina Christensen is
charged to present a more detailed strategy outlining how to reduce
CO2 emissions in the transport sector.
Industry Reacts Cautiously
--------------
7. (U) The Confederation of Danish Industries (DI) welcomed the
political agreement, while expressing concern over implementation.
Helle Juhler, DI's special advisor on energy and climate matters,
declared "the current scheme, in which many of the costs are put on
the businesses, is not sustainable in the long run. It will be a
COPENHAGEN 00000169 002 OF 002
big challenge to come up with a model that can finance the 2020
energy and climate targets." Lars Aagaard, Deputy Director of the
Danish Energy Association (representing the power company
interests),said "the agreement reached has much to recommend it, as
it eliminates large parts of the gap between Danish and European
energy and climate policies. This agreement means that far more
will need to be saved on energy, and that the energy companies will
be at the heart of this effort. We are ready to negotiate the
implementation with the government."
Spreading the Energy Gospel
--------------
8. (U) Energy and climate issues are very high on the political
agenda in Denmark, with Denmark preparing to host the COP-15 climate
summit in December 2009. Eager to position Denmark for success at
the summit, Prime Minister Anders Fogh Rasmussen and Minister for
Climate and Energy Connie Hedegaard are stepping up Denmark's
climate diplomacy efforts abroad, spreading the Danish gospel that
economic growth can be decoupled from energy consumption. They cite
statistics demonstrating impressive economic growth, with hardly any
increase in energy consumption.
9. (U) Minister Hedegaard actively promoted Denmark's role as host
of COP-15 while in Washington on March 4-6 for the WIREC conference.
Hedegaard spoke at the Joint Ministerial-Stakeholder plenary
"Straight Talk" Session and hosted an official Danish side event
about renewable energy technology deployment. The Danish Minister
also conducted bilateral meetings with U/S Dobriansky, CEQ Chair
Connaughton and NSA Price, Senator Boxer and DOE A/S Karsner.
10. (U) Shortly after assuming her post in November 2007, Hedegaard
declared that Denmark's role as the host of the COP-15 at the Bali
meetings will be to push governments to commit to an agreement in
Copenhagen, but also to seek broad agreements and to join forces and
interests. The minister's main priority is to get the U.S. on board
as an active participant, she said, expressing optimism that China
might be willing to move ahead faster than expected and "show big
surprises," and said Denmark also intended to closely with India,
Mexico, Brazil and Argentina. To bolster Denmark's presence
overseas, Hedegaard has announced plans to appoint Danish climate
attaches in five key countries, most likely including in the U.S.,
China and India.
But Treading Lightly with India
--------------
11. (U) During a February visit to the Delhi Sustainable
Development Summit, PM Rasmussen stressed the importance of
recognizing the need for including developing countries in a new
global climate agreement to be penned in Copenhagen in December
2009. Rasmussen publicly recognized that developing economies like
India's might contribute under an international agreement by
concentrating on making efficiency gains in lieu of capping their
energy consumption. Indian PM Singh reportedly pledged that India's
per capita greenhouse gas emissions would never exceed Denmark's.
Comment
--------------
12. (SBU) The government's efforts to burnish its green credentials
abroad are popular at home, but have not been cost-free. The
opposition has accused Rasmussen of overselling his government's
responsibility for Denmark's long term progress, begun under the
previous government. They charge that under the Rasmussen
government Danish CO2 emissions and energy consumption have begun to
rise, and new wind power deployment has been largely frozen.
18. (SBU) Perhaps to answer this criticism, the government recently
established an advisory climate commission composed of prominent
energy and climate experts and economists. The commission, headed
by Amcit Katharine Richardson of Aarhus University, is charged with
suggesting further ways to eliminate Denmark's dependency on oil and
coal in line with the government's long term targets. We will
engage with Richardson and continue to follow Denmark's preparations
to host COP-15 closely.
CAIN