Switch to green energy will not make Denmark fossil-free
Danish electricity companies and public institutions ignore their actual CO2-emissions to appear environment-friendly, even though the structure of the Danish power grid precludes the promised fossil-free scenario.
By Magnus Scherman
“Our wind-power comes from certified climate-neutral sources. We guarantee it!” says the online introduction to one of the sustainable electricity solutions, presented with images of green grass and windmills by new energy provider Natur-Energi. Anna Wieland, a 27-year-old nurse from downtown Copenhagen, was attracted by Natur-Energi’s environmental responsibility when confronted by a salesperson outside a supermarket: “He told me that for the price of a litre of milk a month, I could switch to green electricity. I am quite aware of what I consume in order to minimize unnecessary pollution, and I definitely got the impression that my electricity is green,” she says.
But what Anna and many others don’t know is that the Danish power supply is not as environment-friendly as some companies and politicians claim. Natur-Energi wishes not to comment on the promise of its product, even though a purely green electricity supply is impossible in Denmark. Nor is an electricity supply of solely wind or Danish-produced power realistic, even though some of Natur-Energi’s competitors offer such products. The reason why these single-source products are deceptive is found in the structure of the Danish power grid.
Bathtub effect
Electricity is a product which can’t be stored. The moment power is generated, it needs to be used. Because this unhandy condition, combined with a demand that doesn’t follow supply, constantly creates excess or shortages, electricity companies cooperate across borders to assist each other when they have too much or little electricity to power their customers. This flexible exchange lowers the cost of electricity because a shortage can be solved by importing excess electricity from neighbours instead of urgently firing up emergency generators.
The Danish energy companies buy and sell about 80 percent of their electricity on the Nordic energy exchange, NordPool. Here electricity from Denmark, Sweden, Norway, Finland, Germany, and the Baltic countries is bought and sold across borders every hour. The result of this international energy market is that a Danish consumer uses electricity from a variety of sources: Danish windmills, Swedish nuclear power plants, Norwegian water-turbines and German high-pollution coal power plants. Because energy is exchanged with neighbouring countries, using purely sustainable energy is an illusion. “The trouble with electricity is that it has a bathtub structure. On the surface you fill it up with different sources, but the consumer tabs it from the bottom. The consumer might have invested in one tab, but the product has been mixed with all the other sources before it gets to you,” explains portfolio manager Jacob Skovsby Toft from Markedskraft, an independent energy market analyst.
This picture is confirmed by Energinet.dk, the Danish Transmission System Operators (TSO), which is in charge of securing and supplying Denmark with the electricity needed. According to their figures, the average kWh in Denmark in 2013 consisted of 38 percent coal, 35 percent wind, water and solar, 14 percent waste, biomass, and biogas, two percent nuclear and one percent oil. 2013 wasn’t very windy so despite Denmark’s expansion of windmills, import of German coal-fuelled power was necessary to meet the Danish demand. According to Jacob Skovsby Toft, 2013 is a good example of why one source (e.g. windmills) is insufficient: “Even if we covered all of Denmark with windmills, we would still have to import power from our neighbours when calm weather stops the mills,” he says, and criticizes the “green” electricity Anna Wieland was sold on her way home from shopping. “Green certificates and green electricity have the characteristics of a letter of indulgence. You buy a good conscience, but it doesn’t have any effect on the climate, unless it involves an investment in new capacities like wind power. Many customers feel mislead.” The Consumer Ombudsman doesn’t wish to comment on Natur-Energi in particular but makes clear that “the overall impression of marketing decides if it’s accurate and fair or not. Not only words but also illustrations and the general context can build that impression,” says administrative officer Anne Zerman Nielsen. She adds that since the publication of the Consumer Ombudsman’s “Guidelines on the Use of Environmental and Ethical Claims in Marketing” in 2011, many companies have started making more realistic promises in their marketing.
State of green?
The false switch to sustainable energy goes beyond the market of private consumers. Public institutions are also keen to appear climate friendly. “I have assisted a Danish municipality in buying 100.000 kroner worth of green certificates. One can ask, does the municipality then have a green profile? On paper, yes. But it doesn’t have any actual effect on the climate. They’ve thrown 100.000 out of the window,” says Jacob Skovsby Toft from Markedskraft. Also the current energy agreement (2012-2020), approved by a vast majority in the Danish parliament, emphasises the possibility of CO2-free energy consumption. The agreement aims to replace fossil fuelled energy with sustainable sources by 50 percent in 2020 and 100 percent in 2050. This policy has been praised as a sustainability trailblazer and ranked highest on the 2014 Climate Change Performance Index which was presented at the UN Climate Change Conference (COP19) in Poland. But due to the import/export dependent structure of the power grid, a Danish 100 percent production changeover to emission free energy in 2050 will not give the Danes 100 percent fossil free energy consumption. Importing ‘dirty’ energy from our neighbours is necessary. In fact, the European Network of Transmission System Operators for Electricity (ENTSO-E) in charge of balancing power supply and demand across the European borders recently published a report stating that Denmark alongside Poland and Macedonia is the most import-dependent country in Europe.
In the mind of Denmark’s Minister for Climate, Energy and Building, Rasmus Helveg Petersen, using imported fossil fuelled energy is no hindrance to claim fossil independence by 2050: “By then we will not use oil, gasoline and gas in our energy-, heating- and transport system. Obviously we will still exchange with our neighbours, but our export of green energy will be bigger than our import of black energy. So for the planet’s sake, our balance will more than add up to fossil free,” he says, and notes that he sees no problem in a municipality spending 100.000 tax kroner on green certificates: “It’s that municipality’s priority to go a bit further and I think that’s fine.” Also the Danish state uses the green label for commercial reasons. In 2008 a variety of Danish ministries launched a big scale public-private partnership by the name “State of Green” to join the green economy, which holds massive potential for Denmark, Rasmus Helveg Petersen explains: ”We get energy that’s cheaper than the fossil fuelled one, and we insure ourselves against sudden price increases in fossil fuels. We also have a giant and still growing export of green environment technology, because it is developed and produced here in Denmark. Last year our export of energy technology went up by 17 percent. The export growth on the traditional goods was two percent. The green solutions are now a significant part of our export.” Obviously, the economic aspect of the energy market isn’t a Danish discovery. It has been at the core of the European development for almost 30 years.
Electricity in varietate Concordia
When Anna Wieland was sold an electricity supply outside her supermarket, an EU decision from the 1980s was realized. In a 1986 resolution the European Council laid the foundation for the future of European energy policies calling for “greater integration, free from barriers to trade, of the internal energy market with a view to improving security of supply, reducing costs and improving economic competitiveness.” This liberal mind-set has remained central in the European master-plan on energy policies, which has expanded to include environmental protection and initiated a privatization of European countries’ energy supply. In Denmark the electricity supplier market has been free since 2003. A big leap towards a fully common energy market was taken when the first common action plan titled “An Energy Policy for Europe” was approved in 2007 by EU’s then 25 member states. Today, the EU directive on “common rules for the internal market in electricity” from 2009 builds on the 2007 agreement and requires the member states to further integrate their electricity supply, aiming at a complete internal market by this year. Last week Rasmus Helveg Petersen did exactly that by approving the construction of a new power cable connection from Esbjerg to Eemshaven, Holland which expands the connections through which excess wind power can flow.
Is national energy policy a thing of the past?
With EU-agreements deciding the political path and pace and the necessity to use an exchange-dependent power grid, national energy policy in a small country like Denmark can seem redundant if the ambitious EU 2050 goal to reduce greenhouse gases by 80 percent below the 1990 level remain non-binding. Which difference does Denmark’s complete transition to sustainable energy make, if for example our heavyweight emitting exchange partner, Germany, doesn’t cut back on the fossil fuels as well? At the end of the day, a five percent reduction in German fossil fuels has the same environmental effect as a complete Danish switchover. Minister Rasmus Helveg Petersen acknowledges that energy is an increasingly international policy area: ”EU-regulation is the way forward here, and we are working hard to create an internal market for energy, which is one of the areas where the internal European market still isn’t working well enough. In the EU we negotiate over how much sustainable energy there should be in the power grid in 2030, CO2 reductions and energy efficiency. EU is our battleground in this regard,” he says. On this battleground, article 194 (2) of the Lisbon Treaty can become a tricky bump on the way to the Union’s ambitious climate goals. The article states that the regulations leading to an internal market “shall not affect a Member State's right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply.” This is a battle the climate side will win, Rasmus Helveg Petersen assures: ”No matter the amount of oil and gas, EU countries will not be allowed to use it after 2050. Having these resources doesn’t oblige us to exploit them.”
Green illusions can increase CO2 emissions
The deceptive promise of fossil-free energy can, in addition to not being emission-free, have other negative consequences. Research from Norway and the UK shows that a cognitive perception of using only clean energy can actually make the consumer increase his consumption. The phenomenon is called compensatory green beliefs (CGB), and occurs when a consumer feels that the positive consequences of pro-environmental behaviours, like riding the bicycle to work instead the car, can somehow compensate for the negative consequences of unsustainable behaviours like leaving the heating on while not at home. The degree of this psychological process depends on factors like age, education (high age and education showed low CGB) and number of people living in the house (many people showed high CGB). When companies like Natur-Energi and green-washed public institutions lead people to believe that their choice of energy supplier is beneficial for the environment, CGB can cause people to increase their CO2 emissions by consuming more. This shows a hidden danger behind the false promises. Instead of green labelling policies and products which are still multi-sourced, an honest exposure of the real environmental impact could be beneficial to both the environment and the discussion about how to handle climate change. One thing is certain; a substantial change takes more than the price of a litre of milk a month.
Magnus Scherman has previously contributed to Danish magazines, newspapers and Danish national public radio and has written a widely-cited book about the Italian Agnelli family.
