First I would like to thank the organizers for this opportunity to present Energy Strategy 2025.
In 2004 the Danish Government decided to develop a long term energy strategy. We made a series of scenarios and carried out a broad range of analysis. And last summer I presented the strategy to the Danish Parliament.
Since then we have moved on to implement several of the initiatives in the strategy. I will go into more detail with the initiatives in just a moment.
Also we have initiated a political process in Parliament to follow up on the strategy.
Goals and ambitions
For the Danish Government, the overall ambition with the energy strategy is to ensure security of energy supply, protection of the environment, competition and efficiency.
On top of these ambitions it is a purpose in itself to ensure that our energy policy supports the development of significant Danish business potentials within energy technology.
Danish companies and research institutions already hold strong global positions within several energy technologies. The energy sector also has considerable experience in implementing new technologies in existing energy systems.
The energy sector is part of a complex world, and what we do has serious impact on other sectors and activities, not least on the environment. It is a well known fact that consumption of fossil fuels from energy production and transport are the main contributors to climate change.
Therefore, decision makers within the energy sector must take a greater responsibility than just ensuring energy supplies.
It is crucial that we integrate economic and environmental concerns into our long term policies - nationally as well as internationally.
As I see it, the two most important challenges facing the energy sector are security of supply, and still more demanding international targets for the reduction of greenhouse gasses.
The basic conditions that we all share around the world are an increasingly globalised economy and at least in some areas a more liberalised market framework.
The main principle for the Danish Government - and this is crucial - is that we try to reach our goals in a cost effective way.
This implies that market forces prevail in all areas where they are most effective. Governments should only intervene when markets fail to produce effective solutions.
We believe that setting up a proper framework for the energy markets, will allow the market to do a large part of the job.
Also we see an urgent need for more common policies and measures at the international level to effectively achieve results regarding competitive markets and the environment.
This is certainly true when it comes to reducing CO2-emissions from transport. Here we need an international effort to develop more efficient vehicles and engines. And in the longer run we will probably need new infrastructure for alternative fuels like perhaps hydrogen.
Now, what can we do to achieve our goals?
First of all we should do the obvious. Experience shows that measures for increasing security of supply and reducing the environmental impact can go hand in hand.
If we focus on energy efficiency, if we optimise our energy systems and invest in energy efficient technology, our economies will use less energy for the same level of activity.
In addition to security of supply and achievement of environmental objectives, a more energy efficient economy is also a more competitive economy.
Unfortunately, experience also shows that even cost effective energy savings are not always carried out.
Together with a broad majority in Parliament we have therefore agreed on an ambitious target for the reduction of our future energy consumption.
For all sectors taken together – except transport - energy consumption should be reduced by 1.7 % annually from 2006 to 2013.
CO2 emissions trading
On top of taking the obvious steps with multiple positive benefits, we must focus on concerted international action targeted towards the reduction of greenhouse gasses. The aim should be to reach our environmental goals in the most cost efficient way.
The Danish Government has great expectations in the European Emissions Trading scheme. Emissions trading and JI- and CDM-projects enable countries and industries to comply with their obligations in the most flexible and cost effective way.
Markets and renewables
Another way to reduce environmental impact and increase security of supply is to rely more on renewable energy sources.
In Denmark we already support the use of renewables in terms of direct subsidies and favourable conditions regarding grid connection. In the future we will take new, market oriented initiatives to further promote the use of renewable energy.
For example, we are developing a programme for a more flexible electricity demand. This will fit well with an electricity production that includes considerably fluctuating production from wind power.
Today only few professional costumers reflect over the market price of electricity before turning on the switch.
Also, we want to strengthen the infrastructure in order to prepare for a larger intake of electricity based on wind power.
In this way we believe, that we can achieve several goals at the same time.
First of all, more efficient markets will lead to more competitive prices for businesses and private households. Secondly, a more developed grid and more suppliers will increase security of supply. And thirdly, these measures will make it more interesting to invest in wind power since investors can count on better market prices for their production on larger markets.
In the years to come technology will be an important tool to help us dealing effectively with our long term challenges.
The Danish Government sees great potential in the development of energy technologies such as fuel cells, more efficient wind turbines, technologies using biomass and not least technologies that improve energy efficiency.
We are already funding research and development efforts with substantial means.
Furthermore, we want to induce more ambitious research and development efforts.
The Energy Strategy identifies full scale demonstration projects as one particular area, where we should increase our efforts.
In fact, The Danish Government has decided to strengthen research and development efforts in general, looking to ensure future production and employment in a still more globalised economy.
For the Government, one of the most interesting sectors in this respect is the energy sector. It is one of the fastest growing sectors in terms of exports and employment. And the global market for energy technology is booming.
Especially when it comes to energy efficient equipment and technologies using renewables Danish products and experience are often outstanding, even in a global context.
This was confirmed to me in early January, when I visited China with the Energy Policy Committee of the Danish Parliament. Both representatives of the Chinese Government and the National Peoples Congress expressed their interest in Danish Energy technology.
This spring the Danish Government will present a comprehensive strategy on globalisation. The energy sector is truly global and has a great deal to offer in terms of development and business potentials. Therefore, it is expected that the energy sector will play an important role in our efforts to meet the challenges of globalisation.
- To conclude, the Danish Government has modernised the energy policy by adapting it to more competition on liberalised international markets.
- By focusing on cost effectiveness, development of new technologies and international measures, we are increasing the effectiveness and competitiveness of our economy.
- Thank you for your attention.