Denmark is highly involved in the implementation of an interventionist policy aimed at reducing the environmental impact of national energy consumption with the adoption of ambitious objectives for the reduction of greenhouse gas emissions and the adoption of appropriate fiscal measures. Primary energy consumption in Denmark is now stable at the same levels as 1972 despite relatively high and steady economic growth where renewables (mainly biomass and wind power) contribute eight percent of the energy demand.A. INSTITUTIONAL ASPECTS
A.1. - POLICIES, STRATEGIES AND PROJECTS
In Denmark energy, environmental and agricultural policies are interdependent. Environmental considerations were integrated into energy policy early on and such issues have driven the whole energy policy. The major input was made at the end of 1988 with the launching of the "Energie 2000" action plan designed to promote sustainable development.
In 1996 the Danish Ministry of Energy presented the fourth national energy plan "Energie 21" setting out guidelines for the future sustainable development of energy production within the coming 35 years. RE is expected to cover 35 percent of the energy demand in the year 2035 (one focus is on biomass). Another driving force behind Denmark energy policy is the optimisation of electricity and its costs; the same holds true for the development of biomass as an energy resource.
In 1990, the Danish Parliament adopted "Energie 2000" action plan in order to stabilise CO2 emissions by the year 2000 and lowering them by 20 percent by 2005. The measures supported were:
- Conserving energy and improving energy efficiency
- Transforming the energy supply system
- Using less polluting energy sources
- Fostering R&D
In the wake of political agreement between the Government on the one hand and the parties on the other hand, a specific measure was taken by the Parliament in 1993. It required large energy companies to use 1.2 million tonnes of straw and 200,000 tonnes of fuel-wood for the year 2000, for large thermal installations.
A.2. - THE ROLE OF TECHNICAL AGENCIES
Governmental Organisations involved:
Biomass development is handled directly by the Government at both political and administrative levels. The Environment and Energy Ministry has delegated all aspects of biomass energy policy to the Danish Energy Agency (DEA). Under the Agricultural Ministry there is an agency specifically in charge of production of agricultural resources for non-food uses. This agency includes a co-ordination unit that acts as the interface and ensures policy co-ordination between the two ministries.
An Energy Crops Committee whose members come from different ministries is in charge of drawing up programmes in this area. The Government also established the Renewable Energy Council, which is an interest group supporting the development of RE.
· DEA is an institution that implements the Ministry policies. As the Minister's section for energy, it makes plans, administer rules, laws, etc. on the use of biomass in the energy sector.
· Danish Forest and Landscape Research Institute is an agency of the Danish Ministry of Energy, which carries out fuel quality studies (harvesting, transport, delivery).
Non Governmental Organisations involved:
· BIOMASS INSTITUTE - The Institute of Biomass Utilisation and Bio-refinery is an independent Research Institute at the University Centre. Partners of networking are Danish Agro-Industry, Danish Agriculture, Planning and Engineering companies, Regional Development companies, Universities and Ministerial Agencies and bodies. Its concerns are assessment of biomass, implementation of RE policies, projecting, technology transfer, and innovations.
· CARL BRO GROUP is a company operating worldwide as consultant in the sectors of Transportation, Energy, Industry, Agricultural and Environment systems. As regards wood-fuels, its interests are feasibility studies, environmental impact studies, production and transportation of wood-fuels, project implementation.
· COWI consult is a consultancy enterprise dealing with wood-fuels system, energy management conservation, improvement of energy, efficiency, combined heat and power.
· DTI - Danish Technological Institute - is an independent non-profit institute dealing with renovation and conversion of heating plants with wood-fuel, integration of bio-fuel concepts in traditional energy systems.
· ELSAMPROJECT is an international consulting engineering company owned by the main Danish power utility. It provides a full range of consultancy services regarding new power plants, CHP, energy planning, environmental protection, growing, harvesting, transport, storage, handling, treatment and technologies for conversion of biomass into heat and power.
· HEDESELSKABET is a company specialised in Danish forestry with 7,000 members and 125 years experience in nature reserve management. It also provides consultancy on the use of vegetable as fuels production of forest chips, development of forestry methods and equipment for harvesting wood-fuel.
· Centre of Biomass Technology centralises technical and economic know how related to the use of bio-fuels (wood and straw) which is subsidised by the DEA. It is the result of co-operation between four Danish organisations:
- Dr-TEKNIK, group of consultants providing services to industry
- National Agricultural Engineering Institute
- Danish Forest Institute
B. LEGAL ASPECTS
In Denmark a wide range of subsidies, taxes, duties and legislation dominate the development of the energy sector in general and of RE in particular. Under the Electricity Act of May 31 1996, prices on feeding electricity into the national grid have been set. The pricing is based on the avoided costs for the energy utility. Besides this, production subsidies and low-interest loans are used both for production of renewables and R&D activities.
For the production of energy crops, the set-aside scheme can be used.
_ FINANCIAL REGULATION
FINANCIAL INCENTIVES FOR THE PRODUCTION OF ENERGY CROPS:
"Set-aside" regulation exists but the uncertainty of its future and the lack of a long-term agricultural policy on energy crops hamper their development. Cheap loans are also available.
FINANCIAL INCENTIVES FOR THE CONVERSION OF ENERGY CROPS:
Subsidies for investments in biomass plants are available from the DEA. Subsidies of up to 50 percent are also available for switching from coal to biomass. So far no dedicated energy crops grants have been introduced. Straw and wood chips may be entailed to a subsidy of approximately 0.02 EURO per kWh if they are used in small scale CHP.
FINANCIAL INCENTIVES FOR THE UTILISATION OF ENERGY FROM ENERGY CROPS:
Tax incentives set are:
- Energy tax (1986)
- CO2 tax (1992)
- Green taxes (1995)
Biomass and other renewables are exempted from Danish Energy and Carbon Dioxide Taxes (which are quite high). The DEA is offering a substantial subsidy to the costs in connection with the establishment of RE devices in private dwellings. The subsidy for a biomass boiler varies from 10 to 305 of the investment, depending on efficiency and emission of Carbon and dust.
Woodfuel plant emissions standards for carbon, nitrogen and particulate have been set at certain ranges: From 0.12 to 1MWth input, 1 to 50MWth and >50MWth. For the first group there are no limits for SOx and NOx. Also for wood chips (from 3 to 45mm) are divided in two classes - fine and large - and their standard of moisture content, which varies between plants, can be acceptable from <5 to >40 percent.
Denmark offers a wide interest in biofuel concerns. Institutional organisations, private companies, power utilities, and other groups understand the advantages and the interdependence of energy with environmental and agricultural policies. Hence, biomass system is highly developed. An Energy Tax, which for many years has been imposed on the use of energy, is now being supplemented and partly replaced by a CO2 duty on the use of fossil fuel. Due to the effect of the Energy Tax and CO2 duty on fossil fuels and also the subsidy granted on biomass, bioenergy is now competitive with fossil fuels despite the fact that bioenergy is still the most expensive.