Denmark
Table 4: Key renewable and biomass energy statistics, Denmark
|
Electricity from biomass |
Heating and cooling from biomass |
% of total energy |
||||||
|---|---|---|---|---|---|---|---|---|
|
Mtoe |
% of total electricity |
% of ren electricity |
Mtoe |
% of total heat/cool |
% of ren heat/cool |
Biomass |
All renewables |
|
|
2009 |
0.17 |
5.4% |
19.2% |
1.72 |
22.3% |
75.5% |
11.9% |
20.0% |
|
2016 |
0.30 |
9.8% |
18.2% |
2.35 |
31.1% |
74.5% |
16.9% |
32.2% |
|
Annual average growth |
8.3% |
4.5% |
5.1% |
7.0% |
||||
|
2020 target |
30.0% |
|||||||
Source: Eurostat SHARES database, http://ec.europa.eu/eurostat/web/energy/data/shares.
Note: Biomass as percentage of total energy does not include solid biomass used for transport fuel (volumes are not yet significant).
Demand for biomass
Denmark’s Energy Agreement of 2012 set the target of 35 per cent of energy from renewables by 2020, ahead of its EU target of 30 per cent, and described a longer term aim of continuing to reduce dependence on fossil fuels, with a possible total phase-out by 2050.44 The most recent projections suggest that in fact the country will achieve 40 per cent by 2020.45 A new policy framework extending beyond 2020 is due to be agreed in 2018.
Denmark has long been a leading producer of wind turbines, and the Energy Agreement included the goal of generating 50 per cent of its electricity supply from wind by 2020. Biomass, however, is the second most important source of renewable electricity (in 2016 Denmark generated the second highest proportion of electricity from biomass of all EU member states), and the main source of renewable heat. In common with other Scandinavian countries, Denmark developed district heating systems in combination with CHP generation to increase energy efficiency and reduce dependence on imported oil following the oil crises of the 1970s. Today, Denmark is considered one of the most energy-efficient countries in the world, with the majority of households receiving district heating from CHP plants.46
Thermal CHP stations, including district heating systems are currently undergoing a substantial transition from coal and natural gas to biomass.47 Several conversions and new builds have already been completed or are expected to be completed within the next few years; in February 2017 the largest Danish energy company, the state-owned DONG Energy (now renamed Ørsted), announced that it would phase out the use of coal from 2023. Biomass use is projected to continue to increase to 2020, when most major CHP stations are expected to have been converted to biomass, and remain roughly stable thereafter, though this depends on future policy development (see Figure 7). Should Denmark aim for complete phase-out of fossil fuels, biomass use can be expected to increase further; in some scenarios, energy from biomass is projected to rise to as much as 700 petajoules (PJ) by 2050 (from about 140 PJ in 2015).48
Figure 7: Use of biomass in Danish energy consumption, 2005–15 (actual) and 2016–30 (projected), in PJ
— Source: Danish Energy Agency (2017), Denmark’s Energy and Climate Outlook 2017, https://ens.dk/sites/ens.dk/files/Analyser/denmarks_energy_and_climate_outlook_2017.pdf (accessed 4 Jan. 2018).
Figure 7: Use of biomass in Danish energy consumption, 2005–15 (actual) and 2016–30 (projected), in PJ
Denmark’s biomass supply includes a range of wood-based products and agricultural waste that are used across the domestic and industrial, power and heating sectors, most notably in large-scale CHP generation and district heating (see Figure 8). In 2014, there were a total of 39 CHP plants using at least some biomass as fuel, with a total consumption of 2.7 million tonnes.49 Ørsted’s Avedøre CHP plant near Copenhagen, which is in the process of converting from coal and gas to biomass (mainly wood pellets), alone used a third of this amount.50
Wood pellets and chips are the main feedstock for large-scale plants; other forms of biomass – including straw, wood fuel and wood chips – are used in private boilers, district heating, CHP and power-only plants, but in recent years, several of these plants have switched to wood pellets.51 Most wood fuel, wood chips and wood residues are sourced domestically, though some are transported by truck or boat from Sweden and Germany, as well as from Estonia and Latvia; straw is mainly sourced domestically (see Figure 8).52
Figure 8: Use of solid biomass in Danish energy system in 2015 with share of imports, % of energy content
— Source: Danish Energy Agency (2015), Energy Statistics 2015, https://ens.dk/sites/ens.dk/files/Statistik/energy_statistics_2015.pdf (accessed 4 Jan. 2018).
Figure 8: Use of solid biomass in Danish energy system in 2015 with share of imports, % of energy content
Wood pellets, however, are mainly imported; in 2016, Denmark was the EU’s second largest importer after the UK. For each year between 2011 and 2016, the country imported between 2.0 and 2.5 million tonnes of wood pellets, most for replacing coal in large-scale CHP plants.53 As shown in Figure 9, the main sources of imports of wood pellets are Latvia, Estonia and Russia, followed by Portugal and Sweden. Imports from the US have grown recently and are expected to increase further, as Ørsted has agreed a supply contract with the US pellet manufacturer Enviva.54
Figure 9: Denmark’s imports of woody biomass potentially for energy, 2010–16
— Source: Generated from Eurostat data at http://epp.eurostat.ec.europa.eu/newxtweb/mainxtnet.do.
Note: Wood chips and residues are not only used for energy generation.
Note: Wood chips and residues are not only used for energy generation.
Figure 9: Denmark’s imports of woody biomass potentially for energy, 2010–16
Note: Wood chips and residues are not only used for energy generation.
Support for biomass energy
Renewable energy has received government support since the 1980s. The main current support mechanisms include feed-in tariffs and tax reliefs.55 In addition, strict energy efficiency standards for new buildings and performance requirements for existing buildings have helped to reduce energy use per capita.
Feed-in tariffs were first introduced in 1993 for wind turbines and biomass power plants, and were extended under the 2009 Promotion of Renewable Energy Act, which introduced two sorts of feed-in premiums: variable, covering the difference between average annual electricity prices and the target remuneration, and fixed, under which plant operators receive a fixed bonus per megawatt hour (MWh) on top of the market price; in each case the premium is limited to a specified number of full-load hours of generation. Electricity from biomass, whether from co-firing or biomass-only installations, currently receives a premium of DKK 150 (about €20) per MWh. The government also subsidizes grid connections and balancing costs, as well as work to reinforce the grid to connect renewable electricity plants.
Financial support for renewable energy is provided partly from the public service obligation (PSO) levy, which is added to electricity bills. In 2016, the Danish Parliament reached an agreement to phase out the PSO gradually over the 2017–21 period and instead finance support for renewables through the national budget. Consumption is expected to rise somewhat as a result of this fall in electricity bills.
Various energy taxes have been introduced since the late 1970s to encourage fuel switching and energy efficiency; these currently include a tax on the energy content of the fuel, taxes on emissions of carbon dioxide, nitrogen oxides and sulphur dioxide, and the PSO levy (currently being phased out). The tax rates vary per use and user, with the result that households, public bodies and small businesses face very high rates (among the highest in industrialized countries); electricity for heating is taxed at a lower level and energy for industry lower still.
Biomass used to produce heat, both in district heating and in residential use, is exempt from energy and carbon taxes, which provides an important stimulus for switching from fossil fuels to biomass.
Biomass used to produce heat, both in district heating and in residential use, is exempt from energy and carbon taxes, which provides an important stimulus for switching from fossil fuels to biomass. Indeed, it even favours biomass over electric heating generated from renewable sources such as wind, which is still subject to the energy tax, though at a lower rate than fossil fuels.
Other initiatives to promote renewable heating include a prohibition on the installation of oil and gas-fired boilers in new buildings from 2013 and oil-fired boilers in existing buildings from 2016 onwards in areas with district heating or natural gas. These regulatory measures have been accompanied by demonstration projects and awareness-raising actions such as providing advice on alternatives to oil and gas boilers.
Sustainability criteria
In Denmark, woody biomass for energy is included in the government’s timber procurement policy, most recently revised in 2014, although its application to bioenergy is voluntary throughout the public sector. The policy sets out detailed definitions of the terms ‘legal’ and ‘sustainable’. Products certified under the two main international forest certification schemes – those of the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) – satisfy the criteria. These schemes aim to ensure that the ways in which forests are managed and harvested meet criteria for legality and sustainability, but they do not include any criteria – such as greenhouse gas savings relative to fossil fuels – relating to the use of the products for energy.
In 2015, in response to a request from the government, the Danish District Heating Association and the Danish Energy Association introduced a voluntary sustainability standard for biomass.56 This includes similar requirements for legality and sustainability as the government’s procurement policy, and products certified under the FSC, PEFC or Sustainable Biomass Partnership schemes are considered to meet them.
The standard also requires greenhouse gas reduction levels of 70 per cent by 2015, 72 per cent by 2020 and 75 per cent by 2025, compared to fossil-fuel reference levels according to the Renewable Energy Directive methodology. This does not include emissions from changes in forest carbon stock or indirect land-use change, but the standard also aims to avoid the use of biomass that ‘negatively affects the quantity and quality of forest resources in the medium and long terms’, where there is regionally competing demand for high-value wood resources or if the supply of those resources derives from deforestation or inappropriate conversion of forest to agriculture. The industry is working to develop further criteria to cover these issues.
As noted, application of the standard is voluntary (and only applies to stations with capacity above 20 MW), but the associations aim to increase the level of compliance with the requirements of CHP installations (the only large-scale consumers of biomass for energy in Denmark) from 40 per cent in 2016 to 100 per cent in 2019; it is likely that if these kind of targets are not met, the government would legislate to make them mandatory. The standard will be reviewed in 2018 in light of the criteria expected to be adopted at the EU level.
44 IEA (2012), ‘Danish Energy Agreement for 2012–2020’, https://www.iea.org/policiesandmeasures/pams/denmark/name-42441-en.php (accessed 4 Jan. 2018); IEA (2011), ‘Energy Strategy 2050’, http://www.iea.org/policiesandmeasures/pams/denmark/name-25113-en.php?s=dHlwZT1yZSZzdGF0dXM9T2s,&return=PGRpdiBjbGFzcz0ic3ViTWVudSI – (accessed 4 Jan. 2018).
45 Danish Energy Agency (2017), Denmark’s Energy and Climate Outlook 2017, https://ens.dk/sites/ens.dk/files/Analyser/denmarks_energy_and_climate_outlook_2017.pdf (accessed 4 Jan. 2018).
46 Stelte, W., Hinge, J., and Dahl, J. (2015), Country report 2014 for Denmark, Paris: IEA Bioenergy Task 40, http://www.bioenergytrade.org/downloads/iea-task-40-country-report-2014-denmark.pdf (accessed 13 Jul. 2016).
47 Ibid.
48 Danish Energy Agency (2014), Energy scenarios for 2020, 2035 and 2050, https://ens.dk/sites/ens.dk/files/Analyser/energiscenarier_uk.pdf (accessed 23 Jan. 2018).
49 EnergiNet DK (2015), ‘Climate and Environment: Biomass’, http://www.energinet.dk/EN/KLIMA-OG-MILJOE/Miljoerapportering/VE-produktion/Sider/Biomasse.aspx (accessed 13 Jul. 2016).
50 Ibid.
51 Stelte, W., Hinge, J., and Dahl, J. (2015), Country report 2014 for Denmark.
52 Ibid.
53 Stelte, W., Hinge, J., and Dahl, J. (2015), Country report 2014 for Denmark.
54 Biomass Magazine (2017), ‘Denmark’s Biomass Reboot’, 17 January 2017, http://biomassmagazine.com/articles/14088/denmarks-biomass-reboot (accessed 23 Jan. 2018).
55 Stelte, W., Hinge, J. and Dahl, J. (2015), Country report 2014 for Denmark; EurObserv’ER (2017), Renewable Energy Policy Factsheet: Denmark; IEA (2017), Energy Policies of IEA Countries: Denmark.
56 Dansk Energi and Danske Fjernvarme (2015), ‘Industry agreement to ensure sustainable biomass (wood pellets and wood chips)’, www.danskenergi.dk/~/media/Biomasse/IndustryAgreement_Biomass-20150909.ashx (accessed 29 Dec. 2016).