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The Little Country That Could

Solutions in Action from the Climate 2030 Blueprint

Children’s tales don’t often figure in grownup discussions of energy policy, but Denmark’s progress in tapping wind energy is reminiscent of The Little Engine That Could

Denmark’s story begins in 1973, the year OPEC (the Organization of Petroleum Exporting Countries) embargoed oil exports, creating debilitating shortages and skyrocketing prices. At that time Denmark relied on oil to produce 80 percent of its electricity. For the next few years that country, much like the United States and other developed nations, invested in energy efficiency and alternative energy to prevent such a situation from occurring again.

When oil prices plummeted in the 1980s, however, the Danish and U.S. governments responded very differently. The United States stopped developing approaches to reducing its dependence on oil, but the Danish government continued to encourage the development of new energy sources and nascent technologies. Denmark reaps the benefits today as a net exporter of energy—a high percentage of which is carbon-free.

Denmark relied on a suite of policies to transform its economy into a much leaner, greener, and more secure one. Although it expanded development of conventional fuels off its coasts, Denmark focused principally on reducing demand for electricity and heat. The country stepped up its energy efficiency by insulating existing buildings, enacting stringent codes for new buildings and appliances, and relying on highly efficient combined-heat-and-power plants to provide both electricity and heat. The primary power plant serving Copenhagen, for example, boasts an efficiency of more than 90 percent, compared with an average efficiency rate of 33 percent for a typical U.S. coal plant (Freese, Clemmer, and Nogee 2008).

Denmark fostered renewable energy as well, and today renewables supply 27 percent of the country’s electricity—most of it from wind (Ministry of Climate and Energy 2008). With fewer than 70 wind turbines in 1980, the nation now has more than 5,000 providing 3,135 megawatts of capacity—enough to power more than 1.6 million typical American households (DWEA 2009).

Consistent, long-term policies encouraging the development of wind energy helped Denmark become a global leader. The government spurred investment in wind power by providing incentives that covered 30 percent of the costs of installing turbines until 1990. Denmark also required utilities to buy wind power at a fixed price until 1999. Although at that point the country required customers to pay any added costs of wind power, the government mandated that utilities provide 10-year fixed-rate contracts for wind developers, which helped them secure investment financing. Wind power also benefited from priority access to the electricity grid (GAO 2006). 

This energy transformation helped Denmark expand its economy while reducing carbon emissions. Domestic investment in wind has made Denmark a global leader in turbine manufacturing. Vestas and Siemens Wind Power dominate global wind sales, and the industry accounts for roughly 20,000 jobs in Denmark—and 4 percent of its industrial production. While the economy has grown by roughly 75 percent in 25 years, energy consumption has remained stable, and the country has cut its carbon emissions in half since 1980 (Danish Energy Agency 2008; Ministry of Climate and Energy 2008).

Although Denmark is obviously much smaller than the United States, and its energy needs are much lower, the Danes have proved beyond a doubt that national foresightedness and perseverance—combined with smart policies and industrial innovation—can produce an extraordinary shift in a country’s energy profile. The United States could learn much from the example of “the little country that could”—and did!

References
Danish Energy Agency. 2008. Energy statistics 2007. Copenhagen. A
ccessed on January 28, 2009.

Danish Wind Energy Association (DWEA). 2009. Turbines in Denmark. Accessed on January 28, 2009.

Freese, B., S. Clemmer, and A. Nogee. 2008. Coal power in a warming world: A sensible transition to cleaner energy options. Cambridge, MA: Union of Concerned Scientists. 

Government Accountability Office (GAO). 2006. Department of Energy: Key challenges remain for developing and deploying advanced energy technologies to meet future needs. GAO-07-106. Washington, DC. Accessed on January 28, 2009.

Ministry of Climate and Energy. 2008. The Danish example. Copenhagen. Accessed on January 28, 2009.

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