The Future Danish Energy System - Technology Scenarios

The Danish Board of Technology

The Future Danish Energy System Technology Scenarios

The Danish Board of

Technology

The Future Danish Energy System Technology Scenarios Project manager at The Danish Board of Technology

Gy Larsen

Project assistant

Ditte Vesterager Christensen

Project secretary

Eva Glejtrup

The report can be ordered at The Danish Board of Technology

Antonigade 4

DK- 1106 Copenhagen K

Denmark

Phone +45 33 32 05 03

Fax +45 33 91 05 09

[email protected]

The Danish Board of Technology’s reports 2007/2

The Future Danish Energy System

Technology Scenarios

3

Contents

Preface 5

1. Abstract 9

2. Introduction 19

3. Layout of the Scenarios 24

4. The Combination Scenario 30

5. References 42

Appendices Appendix 1 Participants

Appendix 2 The Reference Scenario

Appendix 3 The Cost Savings Scenario

Appendix 4 The Gas Scenario

Appendix 5 The Wind Scenario

Appendix 6 The Biomass Scenario

Appendix 7 Comparison of Scenarios

Appendix 8 Preconditions and Results

Appendix 9 The National Economy

Appendix 10 The Analysis Models

5

Preface

In 2003 the Danish Board of Technology initiated two energy projects: “Energy

as Growth Area” and “When the Cheap Oil Runs Out”. The results of both of

these projects are indicative of a demand for more long-term oriented bids for

future energy scenarios, focusing on technology development and the balance

between a secure supply, the environment, and economy.

In 2004 the Danish Board of Technology initiated the project “The Future Dan-

ish Energy System” on this basis. The purpose of the project is to create an all-

round and broadly based debate on the subject of the kind of energy Denmark

wants in the future. Among the participants in this debate are representatives

from the political arena, authorised to make decisions. Players and interested

parties from the energy sector are also represented.

The report gathers the different aspects of the scenario work. The report sug-

gests how a Danish energy system might look in 2025 – a suggestion, which is

developed on the basis of goals, set by the project’s steering committee. The

work on the report was finalised in September 2006. In January 2007 a minor

update of model calculations and text concerning among other things the

costs involved in the application of various technologies in the transport sec-

tor and boilers in households and industry1 .

In the time up to the expected completion of the project in June 2007 there

will be a focus on the development of policy instruments and on including a

broader group of interested parties and politicians. The task of this group of

specialists is to assess the way in which the goals of the future energy system

can be formulated and fulfilled. This will take place in conjunction with rele-

vant players.

In concrete terms the plan is to conduct five theme workshops in the period

February to April 2007 followed by a Future Panel seminar in May 2007. The

workshops will focus on wind power, transport, biomass, energy saving in

construction, as well as the district heating systems of the future.

The work scenario is carried out by a task force group from the Danish Board

of Technology.

1 Only the model results of the so-called combination scenario (see chapter 4) have been updated. The model calculations of the specific tech-

nology scenarios presented in the appendix have not been updated – it concerns the costs of various technologies in the transport sector, as

well as boilers in households and industry.

Brief Info on the Project

6

The task force group consists of:

Anders Kofoed-Wiuff, EA Energy Analyses Ltd.

Jesper Werling, EA Energy Analyses Ltd.

Peter Markussen, DONG Energy

Mette Behrmann, Energinet.dk

Jens Pedersen, Energinet.dk

Kenneth Karlsson, the Risø National Laboratory

The political participation will be arranged through a so-called Future Panel,

consisting of politicians from the Danish Folketing who represent all the par-

ties in the Danish Folketing.

Eyvind Vesselbo (V)

Jens Kirk(V)

Lars Christian Lilleholt (V)

Jacob Jensen (V)

Torben Hansen (S)

Jan Trøjborg (S)

Niels Sindal (S)

Jens Christian Lund (S)

Aase D. Madsen (DF)

Tina Petersen (DF)

Charlotte Dyremose (KF)

Per Ørum Jørgensen (KF)

Martin Lidegaard (RV)

Morten Østergaard (RV)

Johannes Poulsen (RV)

Anne Grete Holmsgaard (SF)

Poul Henrik Hedeboe (SF)

Keld Albrechtsen (EL)

Per Clausen (EL)

Emanuel Brender (KD)

The players and interested parties of the energy sector are represented

through an external steering committee:

Inga Thorup Madsen, the Metropolitan Copenhagen Heating Transmission

Company (known as CTR)

Hans Jürgen Stehr, the Danish Energy Authority

Poul Erik Morthorst, the Risø National Laboratory

Benny Christensen, Ringkjøbing County

Flemming Nissen, DONG Energy

Helge Ørsted Pedersen, EA Energy Analyses Ltd.

Poul Dyhr-Mikkelsen, Danfoss

Aksel Hauge Pedersen, DONG Energy

Tarjei Haaland, Greenpeace

Ulla Röttger, the Energy Research Advisory Council (REFU)

Peter Børre Eriksen, Energinet.dk

The Authors of the Report

The Political Future Panel

The External Steering

Committee

7

Furthermore, a great number of other players and interested parties from the

energy sector have been included in the project, in among other ways through

the four hearings conducted in 2005 and 2006.

The Danish Board of Technology would like to take the opportunity to thank

the Danish Folketing’s Future Panel, the external steering committee, and not

least the task force group who prepared the present report.

The Danish Board of Technology, January 2007

Gy Larsen

9

1. Abstract

The development of the Danish energy sector in the past 35 years is unique in

an international perspective. In spite of a considerable economic growth – the

gross national product has increased by more than 50% since 1980 – Denmark

has succeeded in maintaining the gross energy consumption on a more or less

constant level. Some of the most important means of maintaining this level

has been insulation of buildings, the development of wind power and in-

creased fuel efficiency, especially through the co-production of electricity and

heat. At the same time the share of renewable energy has grown and it now

covers 15% of the gross energy consumption. Because of the discovery of oil

resources in the North Sea and the replacement of oil by coal, gas, and renew-

able energy, Denmark is no longer dependent on imported oil. See figure 1.1.

- 100 200 300 400 500 600 700 800 900

1 000

1972 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

PJ

oil

coal RE

gas

Figure 1.1. The development in Danish gross energy consumption.

In recent years the framework of the Danish energy sector has changed as a

result of liberalisation, the international climate convention, increased fuel

prices, etc. These changes create new challenges for the sector, and several

players have expressed an interest in discussing goals and ways in which the

Danish energy system can develop, subject to these new conditions.

In 2004 the Danish Board of Technology invited a broad sector of individuals

representing the greatest players in the energy sector, researchers, NGOs, and

the Danish Folketing to participate in the investigation of possible avenues

for the development of the Danish Energy system.

A cornerstone of the project is the so-called Future Panel, which consists of

members of the Danish Folketing. The Future Panel is subject to fixed-term

appointment. This committee consists of 20 participants, which represent all

The Future Danish

Energy System

10

parties in the Danish Folketing. The Future Panel is supported by a steering

committee with key experts and players from the energy sector, by a task

force group, and by the Danish Board of Technology, which supplies a secre-

tary and a project manager.

In the course of the project four public hearings have been conducted. Mem-

bers of the Future Panel have supervised the hearings. They have focused on

goals and challenges of the energy sector and means to meet these challenges

with regard to supplies, as well as consumption. The reports from the hear-

ings can be found on the homepage of the Danish Board of Technology

(www.tekno.dk).

1.1. Scenarios

With regard to the Danish energy system the project has resulted in a number

of scenarios. The first step has been to develop four technology scenarios,

which focus on energy cost reduction, natural gas, wind power and biomass.

In addition there will be a reference scenario, which takes the market prices

into account. The reference scenario will demand limited efforts from the po-

litical sector. The purpose of the technology scenarios is to illustrate several

possible avenues by which the future Danish energy system could accomplish

the goals agreed upon. They have been constructed in such a way that they

can be accomplished by a focused and active political effort.

The cost savings scenario focuses on more efficient electrical devices, on im-

provement of the climate envelope with regard to existing and new houses,

and on increased fuel efficiency of new cars. In the gas scenario high-

efficiency gas plants will supplant coal in the production of electricity. Micro

combined heat and power will supplant gas boilers in the households, and a

substantial amount of natural gas will be applied in the transport sector.

A significant part of the wind scenario is expansion with wind power, espe-

cially offshore, and the development of a flexible consumption of electricity.

Electricity produced by wind power is applied to the production of heat, pri-

marily by the use of high-efficiency heat pumps, and a large section of the

transport sector will be based on electrical cars.

The biomass scenario primarily focuses on an increased application of bio-

mass for the production of electricity and heat, and bioethanol and bio-diesel

in the transport sector. Biomass also supplants oil in the heating sector and in

the industry.

The steering committee has established two quantitative goals for all the

technology scenarios:

• Reducing CO2 emission by 50 % in 2025 compared to the 1990 level

• Reducing oil consumption by 50 % in 2025 compared to the 2003

level

First Step Technology

Scenarios

Cost Savings, Gas,

Wind, and Biomass

Two Goals

11

None of the scenarios will be able to attain both goals by 2025.

In the preparation of the scenarios, global responsibility and the national

economy have been given special consideration.

Following a seminar with the Future Panel it was decided to develop a combi-

nation scenario. Over and above complying with the goals, the politicians

would in general like to have an energy system focusing on energy saving, the

application of wind power, and independence from import of large amounts

of natural gas and biomass. Through a combination of energy saving, wind

power, electrical cars/hybrid cars, and bio fuels, a combination scenario,

which fulfils the goals, was developed.

A model tool has been developed in the project in order to quantify the scenar-

ios. Often it is a problem that different players have different approaches and

apply complex models, which are not transparent to outsiders. For this reason

relatively simple models have been prepared in the project in order to give all

players a chance to gain insight into the analyses. Yet another advantage of

the simple tool is that new analyses can be prepared relatively quickly - for

instance during meetings. On the other hand the degree of details shown by

the model is not as developed as that which one finds in complex sector mod-

els. For instance, the models are only capable of describing the energy system

in the year of the scenario which is analysed – here 2025 – and not the actual

developmental process leading to the status of that year.

1.2. The Combination Scenario

The combination scenario takes its point of departure in an effort in the con-

sumption area matching the level in the savings scenario. In the scenario the

end users’ final energy consumption in 2025 is 304 PJ. It is the equivalent of a

decrease of almost one third compared to 2003. This fall is the equivalent of

the energy consumption in 65 % of Danish households in 2003.

The gross energy consumption also decreases in the period up to 2025. The de-

crease is almost 40% compared to 2004. The proportion of renewable energy

increases to 45 % of the gross energy consumption.

Model Tools

The Final Energy

Consumption

Gross Energy

Consumption

12

-

100

200

300

400

500

600

700

800

900

1964 1984 2004 2025

PJ

Oil Coal and carbonsed coal Renewable energy, etc Natural gas

Figure 1.2. Gross energy consumption in 1964, 1984, 2004, and in the combination scenario

in 2025. In 2025 renewable energy will encompass 48 PJ wind and 177 PJ biomass, as well

as a smaller conribution from solar energy. The consumption is exclusive fuel consumption

for international air traffic and extraction of oil and gas in the North Sea. Furthermore, the

historic energy consumption is corrected for climate variations and electricity exchange.

In the combination scenario the greater part of the electricity production

will be based on wind power (50%) and biomass (23%). It is assumed that full

use will be made of the biogas potential. Furthermore natural gas contrib-

utes approximately 10%, coal 8%, waste 8%, oil 1%, and solar cells 0.5%.

The cumulative Danish wind power capacity will amount to approximately

4500 MW. Of these 2600 MW are produced by land-based wind turbines

(with greater output than the present wind turbines) and approximately

1800 MW by offshore wind turbines. In comparison, the wind capacity in

2004 was approximately 3100 MW. The amount of offshore wind turbines in

the combination scenario is the equivalent of 9 – 10 established offshore

wind farm sites like Rødsand 2 (200 MW). The fluctuating production of the

wind turbines will primarily be stabilised by gas power, flexible consump-

tion, and heat pumps.

The reduction in the oil consumption is mainly due to the effort made in the

transport sector, as well as the phasing out of oil as heating fuel in house-

holds and in the industry. In the transport sector an efficiency improvement

of 25% in the car population is expected, as well as a new focus on fuels

other than oil – primarily bio fuels and electricity, but also natural gas.

13

From 1990 to 2025 the CO2 emission will be reduced by approximately 60%.

This is primarily due to the reduced energy consumption and the increasing

share of renewable energy in the supply sector.

Figure 1.3. The development in the actual and the corrected CO2 emission in the time from

1990 to 2004 (source: the Danish Energy Agency), as well as an indication of CO2 emission

in the combination scenario 2025. Corrected emissions allow for yearly temperature varia-

tions and exchange of electricity with other countries.

The oil consumption will be reduced by approximately 50% compared to

2003. This is due to efforts in the transport sector, where there will partly be

an increased efficiency and transfer from passenger cars to train and bus

transport and bicycles, and partly a change from oil consumption to bio fuels

and electric/plug-in hybrid cars. Furthermore there will be a considerable

reduction in oil consumption pertaining to heating purposes in individual

houses and in the industry by means of energy saving and a change of fuel

to for example biomass and heat pumps.

Import and Export

The considerable reduction in energy consumption reduces the need for, and

thereby the dependency on, imported fuels. In spite of the effort it will still

be necessary to maintain import of a certain amount of coal and natural gas

(se figure 1.4). The import of gas will primarily balance the fluctuating pro-

duction of the wind turbines. The coal will be consumed in the combined

heat/power production.

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 2025

Actual Corrected

Million tons CO2

The combination scenario

The Goals

14

Import and Export of Energy and CO2

(150)

(100)

(50)

0

50

100

150

200

oil coal gas biomass biogas waste electricity CO2 (mt)

Reference 2025 PJ

The combi scenario PJ

Export

Import

Figure 1.4. Import and export of energy in 2025, PJ (Denmark’s production potential minus

domestic fuel consumption). Import of CO2 emission means that Denmark must reduce more

in order to stay within the allocated quota or purchase quotas abroad. Export means that

Denmark can sell quotas abroad.

Assuming for example that Denmark has a goal of reducing the CO2-

emission with 50% in 2025, it would be possible to sell quotas the equivalent

of approximately 7 million tons of CO2. At a quota price of 150 DKK per ton

the sum would be approximately one billion DKK.

Investments and Infrastructure

There is a need for considerable investments in the existing building stock

and in more energy efficient equipment. It is assumed that half the existing

building stock will be renovated in 2025. Its average heat loss condition will

then reduce its heat loss with approximately 50%. The extra effort to reduce

the buildings’ heat loss will presumably be carried out in the context of the

general renovation. Furthermore it is assumed that half of all recently con-

structed buildings are established as energy neutral constructions (Hous-

ing+) - in Danish ”Bolig+”.

There will also be investments in offshore wind turbines and in infrastruc-

ture for the accumulation of the production from the wind turbines. Invest-

ments in offshore wind farm sites and electricity infrastructure will demand

concerted planning. There is a need for a further analysis of the advantages

of co-operating with Denmark’s neighbours and further integration of the

northern European electricity markets.

Furthermore there is a need for investments in heat pumps in collective

heating systems and for the development of flexible electricity consump-

tion. Many of the investments necessary for the development of flexible

electricity consumption could come about gradually, when the consumers’

Buildings, Equipment,

Offshore Wind Turbines

Housing+ standard

Housing+ consists of

energy neutral build-

ings, which in the

course of the year

produce at least as

much electricity and

heat as they

consume.

Heat Pumps and

Flexible Consumption

15

electricity meters and equipment are replaced by more advanced models

that allow for a response to hourly rates.

The relays in the transport sector demand investments in new production

facilities in the production of bio fuel. There will also be a need for invest-

ments in the existing tank systems of distribution of bio fuels.

There will be a need to analyse which roles and what extent the district

heating and the natural gas system should have in the future energy system.

Costs

The economy of the scenario is calculated as the annualised extra costs com-

pared to the reference. The economy of the scenarios is calculated as the an-

nualised value of the entire energy system in the scenario year 2025. This

means the yearly cost of payments and financing by a reinvestment of the

energy system. This is not a national economic calculation, but an economic

parameter, which enables a relative comparison of the scenarios with the

reference.

Furthermore it must be stressed that externalities associated with supply se-

curity, for example in the form of faulty fuel supplies and environment

(with the exception of CO2) are not appraised in this study. Given the pre-

condition that the use of fossil fuels will be reduced considerably in the

combination scenario, it is to be expected that there will be a bonus in the

form of lower environmental costs and more secure supply.

The yearly extra costs involved in realising the combination scenario instead

of the reference is estimated to approximately 1.6 billion DKK or the equiva-

lent of 300 DKK per capita (see figure 4.6). A precondition for this estimate is

an oil price of 50$ per barrel in 2025 and a CO2 quota price of 150 DKK per

ton.

In comparison it costs approximately 12.800 DKK (incl. fees) to heat an aver-

age household in 2005 (source: The Danish District Heating Association). The

expenses for electricity consumption of an average household is estimated

to approximately 8.750 DKK incl. fees (5000 kWh*1,75 SKK per kWh).

Compared to the reference the fuel costs are reduced, while the investment

costs are greater. The operating costs are also increased in the combination

scenario, among other reasons because biomass, biogas, and waste are more

difficult to handle than fossil fuels.

It must be noted that there are great uncertainties involved in assessing the

future costs of the energy system. The fuel prices may for example vary con-

siderably from those applied in the present report. If the price of oil would be

approximately 60$ per barrel, then there would be no extra costs involved in

carrying out the scenario.

Biomass

Gas and District Heating

Costs per Capita

16

Technology Development

With reference to the technological development necessary to realise the

combination scenario, there will among other things be a need to develop

standard building units with a high degree of insulation capacity, especially

with regard to windows, removal of traditional thermal bridges, etc. In the

field of electrical equipment Denmark has a leading edge on some counts

(pumps, fridges, control systems, etc.) and should make an effort to stay

ahead. In other areas the technology must be imported.

In order to make use of flexibility in electricity consumption, there will be a

need to develop control systems for intelligent electrical equipment, which

to a greater extent can adjust the consumption to the electrical system’s ac-

tual current output load.

When the energy consumption decreases and the share of wind power in-

creases, the foundation of the district heating project will in many places de-

crease. It is important to clarify partly in which areas district heating should

continue to have priority, and partly how energy loss can be reduced. It is

also vital to discuss how the energy efficiency can further be increased

through dynamic use of heat pumps, geothermal energy, remote cooling,

and heat storage.

An efficiency improvement of 25% of the cars’ energy consumption would

among other issues demand an improvement of the present motors, as well

as promotion of lighter and smaller cars. This also concerns diesel, petrol,

and the so-called flexi fuel cars, which are propelled by a mixture of ethanol

and petrol. Furthermore there is also a need for a continued significant de-

velopment of electrical cars and plug-in hybrid cars, as well as a commer-

cialisation of methanol motors.

In the transport area there might furthermore be a need for a development

of various GPS based systems for the registration of the individual car and

truck’s operational patterns, so that travel fees can be introduced. These fees

should vary in accordance with the zones through which you travel, and the

time of day you travel (road pricing). This project will in part be promoted by

the drive to find solutions to congestion problems.

Other priority areas will be research, development and demonstration

within offshore wind turbines (also on deep sea locations), large heat pumps

in the district heating system, electrical system components for the purpose

of securing a safe operation of the electrical system in times of high levels of

wind power production.

Export Potential

The export encompasses among other things construction components for

low energy housing and renovation of existing buildings. This also involves

energy-efficient electrical equipment (pumps, fridges, etc.), control devices to

optimise the consumption relative to the current load of the electrical cir-

cuit, as well as road pricing technologies.

Buildings and

Equipment

Intelligent Electrical

Equipment

District Heating

Transport

Offshore Wind Turbines,

Heat Pumps, Operation

of the Electrical System

Buildings, Electrical

Equipment, Control, etc.

17

There will also be a significant export potential in the field of wind power

technology – especially offshore wind turbines.

In the field of bio fuels Denmark has knowledge of production of ethanol, as

well as methanol. For this reason there is considerable export potential in

technology and products for the ethanol process. Denmark does not have the

biomass potential to export ethanol.

In addition, Denmark’s export potentials will be strengthened in the area,

which one could term “the flexible energy system”. The phrase signifies a

system, where the consumers play a far more active role in the creation of a

cohesive system. Important components are flexible district heating systems

with electricity propelled heat pumps, components for electrical cars (intel-

ligent charging in the contexts of the needs of the drivers, as well as the

needs of the electricity system), and not least activation of any other flexible

ways of consumption in consumer and industry contexts.

1.3. The Next Step

This report gathers the result of the previous work. In the time leading to the

expected completion of the project in June 2007, there will be a focus on de-

veloping policy instruments and the inclusion of a broader group of inter-

ested parties and politicians in order to assess the ways in which the goals of

the future energy system can be formulated and fulfilled. This will happen

in co-operation with relevant players. Furthermore the effort will also be di-

rected towards consolidating and checking the robustness of the combina-

tion scenario.

Even if the project concentrates on the Danish energy system, several of the

mechanisms involved depend on the global development. The results from

the project could be an input in the present negotiations about the future

Danish energy strategy, which again would be a good Danish contribution to

the European negotiations about an EU policy contributing to the develop-

ment in Denmark. The conclusions of the present report have been for-

warded to the EU commission as a measure in the hearing of the EU

commission’s green book (the Danish Board of Technology, September 2006)

and the Danish Folketing’s council on energy policy has likewise sent an an-

swer to the hearing to the EU commission with reference to the present

work.

Wind Power

Bio Fuels

The Flexible Energy

System

19

2. Introduction All sectors of a modern society depend on energy supply. Increasing or de-

creasing energy prices and lack of energy will generate significant conse-

quences. Increasing discharge of CO2 and other greenhouse gases from fossil

energy sources (oil, natural gas, and coal) and resulting climate changes in-

fluence human health conditions and economic bases for living.

In 2003 the Danish Board of Technology implemented two energy projects:

“Energy Technology as Growth Area” and “When the Cheap Oil Runs Out.”

The results of both of these projects indicate a need for more long term sug-

gestions for a future Danish energy policy with a good balance between

supply security, environment, and economy. These suggestions should en-

compass a strategy to further business potentials, while also considering

that oil resources will be limited within a foreseeable future.

On this basis the Danish Board of Technology has implemented the project

concerning the future Danish energy system.

2.1. A Debate on the Future Danish Energy

The project should contribute to supporting and furthering a continual dia-

logue about what type of Danish energy future we wish to have in a long-

term perspective. The project endeavours to include a broad selection of rep-

resentatives from political levels, as well as players and interested parties

from the energy sector. The Danish Board of Technology has attempted to

create a good framework for a constructive dialogue, taking its point of de-

parture in qualified analyses of the present energy system and the future

challenges and opportunities for development.

The pivotal point of the project has been a Future Panel consisting of mem-

bers of parliament, which represent all parties in the Danish Folketing. The

Future Panel consists first and foremost of politicians who are involved with

policies, which influence and/or are influenced by the energy policy, for ex-

ample environment, business development, and transport.

The project is managed by a steering committee, representing a large num-

ber of Danish players and interested parties – companies, institutions, and

interest groups – all within the energy sector. The steering committee has

established a task force group to take charge of the analytical sector of the

project. Furthermore the steering committee has established a group of ex-

perts to work specifically with potential energy saving plans. The configura-

tions of the steering committee, the task force group, and the savings group

can be seen in appendix 1.

Long Term Suggestions

are Required

A Future Panel of

Politicians

The Steering Committee

Represents Players and

Interested Parties

20

2.2. The Course of the Project

Since its inception in summer 2004, the project has moved through the fol-

lowing phases:

• Identification of future challenges in the Danish energy system

• Setting of goals for the Danish energy system in 2025

• Identification of possible mechanisms to fulfil the goals (includ-

ing identification of insecurities)

• Development of four scenarios of different ways to fulfil the goals

• Debate on the subject of the strengths and the weaknesses of the

scenarios (including sensitivity calculations)

• Development of a so-called “combination scenario”, which com-

bines mechanisms from the four scenarios

The steering committee and the Future Panel have participated actively in

the management of the direction of the project, as well as the contents of the

various phases, and the task force group has delivered the analytical work

necessary to qualify the decisions made by the steering group and the Future

Panel.

The communication and contact between the steering group and the Future

Panel have unfolded partly via public hearings and partly via meetings and

seminars involving the Future Panel and the steering group. Via the hear-

ings, the meetings, and the seminars the steering group has continually re-

ceived input and response from the Future Panel. In this way the Future

panel has had a direct influence on the setting of goals, the selection of op-

tions available for action in the four scenarios, and development of the final

combination scenario.

The Danish Board of Technology has supplied secretarial functions to the

project and has managed the overall process.

The Project’s external activities have encompassed four hearings in the

course of 2005 and 2006. The four hearings were conducted on 19. January

2005, 17. November 2005, 25. January 2006, and on 18. May 2006.

The hearings reflect the project’s phases, since the first hearing concerned

the future challenges, the next two were about possible measures to be

taken in the production and consumption sectors respectively, while the last

hearing was a presentation of the combination scenario – a possible Danish

energy future, where a number of the mechanisms discussed are combined.

This report gathers the result of the work done so far. In the period up to the

expected completion of the project in June 2007 the focus will primarily be

on mechanisms and the inclusion of a broader group of interested parties

and politicians for the purpose of assessing the goals and the mechanisms of

the future energy system.

The Further Course of

the Project

The Roles of the Project

Participants

Four Public Hearings

21

In spring 2007 five workshops have been held concerning:

• Wind

• Transport

• Energy Savings

• Infrastructure at the The Heating Area

• The Application of Biomass Energy

2.3. The Scenario Process

Concurrently with the four hearings – and with input from those - the task

force group has prepared four scenarios, each showing a different energy

system that complies with the goals established in the project for the Danish

energy system in the year 2025. Furthermore the task force group has tested

their “robustness” via sensitivity calculations involving for example varying

oil prices. In order to compare the societal consequences of every scenario, a

reference scenario has been prepared which represents a likely development

of the energy system in 2025 under the given conditions.

The four technology scenarios each have their priority area, each of which

has received significant attention in the choice of mechanisms. The priority

areas are energy savings, biomass, gas, and wind respectively (the four sce-

narios are described in appendix 2-6). Each one of the technology scenarios is

a suggestion as to how the future Danish energy system could develop via

an active political effort. In chapter three the applied scenario method is de-

scribed.

The scenarios vary - primarily by virtue of different preconditions with re-

gard to the configuration of the production apparatus and equipment in the

consumption sector. Infrastructure has only been included with regard to

expansion of gas transmission and connection to offshore wind turbines.

The prices of fuel, the CO2 quotas, and the economic growth are identical in

the scenarios; just like the same amount of energy services are delivered (for

example heat consumption per square meter, number of electrical appli-

ances).

Prior to the hearing on 18. May 2006 a seminar was conducted with the par-

ticipation of the Future Panel, the steering group, and the task force group.

On the seminar the four technology scenarios were presented to the Future

Panel. It was then decided to combine selected mechanisms from the four

technology scenarios in a combination scenario. Chapter 4 describes the

combination scenario.

2.4. The Danish Contribution to EU’s Energy Policy

In the EU commission’s presentation on energy policy (EU’s green book on

sustainability, competition, and supply security, March 2006) the commis-

Four Technology

Scenarios

Energy Savings, Biomass,

Gas, Wind

The Combination

Scenario

The EU Commission’s

Presentation on Energy

Policy

22

sion estimates that there is a need for massive investments – approximately

1.000 billion Euro – in the energy sector in the next 20 years. At the same

time Europe has become more dependent on import of energy from outside

Europe and in the next 20-30 years around 70% of EU’s energy needs will be

covered through import, whereas today 50 % is imported. Part of the import

will come from politically unstable regions.

The presentation therefore focuses on important priority areas such as

greater energy efficiency and increased application of renewable energy.

At the March 2006 meeting the commission’s presentation was the point of

departure for a discussion of a shared energy policy among EU’s prime min-

isters.

Among other things the minister decided to prepare an EU energy report

whose specific focus should be the preparation of a long term energy policy

in relation to the world outside the EU. Furthermore the ministers asked the

Commission to prepare a prioritised action plan, which can be adopted this

spring at the meeting of the prime ministers. The action plan presented by

the commission on 10 January 2007 contains among other issues sugges-

tions of binding goals and an increased effort in relation to energy savings

and efficiency improvement.

For Denmark energy technologies entail a great business potential. As a re-

sult of the concentrated efforts in the Danish energy policy sectors since the

1980s the energy sector contributes substantially to Denmark’s economic

growth and employment. The export of Danish energy technology measured

in current prices has developed from approximately 17 billion DKK in 1996

to 39 billion DKK in 2005. To this figure should be added the export of oil and

gas which in 2004 was approximately 20 billion DKK.

With regard to the future several of the priority areas in the EU Commis-

sion’s presentations are areas where Denmark has knowledge and compe-

tence, and where the business potential for this reason is considerable.

Among other issues involved are the increased energy efficiency and appli-

cation of sustainable wind and biomass energy.

EU’s Prime Ministers

Considerable Business

Potential

24

3. Layout of the Scenarios

3.1. Four Technology Scenarios and a Reference

As a point of departure four technology scenarios were constructed, all fo-

cusing on savings, wind, gas, and biomass respectively.

The scenarios attempt to illustrate “reasonable” extreme points involved in

various choices of technology. The reference signifies that they neither re-

flect the full technological potential, nor do they realise their potential. The

focus is on possible scenarios of development, which can be attained

through a goal oriented and active political effort.

Figure 3.1. The driving forces behind the individual scenarios, which focus on savings,

wind, gas, and biomass

None of the scenarios should be seen as isolated formulas with reference to

Denmark’s future energy system. Each of them has been included to illus-

trate the consequences of choosing one individual scenario with precisely

the technology portfolios necessary to realise the scenario. The four technol-

ogy scenarios should be perceived as monocultures each within their area.

They are first and foremost tools in the creation of a debate on the subject of

the possible directions in which our energy system could develop.

Reference

Ikke noget der skubber i én retning. Energi - markederne

og brændselspriserne er afgørende for

udviklingen

Gas Ønske om at øge anvendelsen af gas i transportsektoren og til produktion af el og varme. Hertil kommer hensynet til at mindske CO

2 emissionen og olieafhængigheden.

Der er store gasressourcer i Nordeuropa og Rusland.

Besparelser

Ønske om en høj grad af

selvforsyning af både brændsler og energiprodukter, og dermed uafhængighed af udviklingen i omverdenen. Fokus er på ændring af energibehovet og udvikling af lavenergi udstyr

Vind

Ønske om øget selvforsyning og mere vedvarende

energi i el - og varmeproduk - tionen . Dertil kommer fortsat udvikling af den danske vindmølleindustri

Biomasse

Ønske om mere diversificeret brændselsforbrug og øget andel af vedvarende energi. Hertil kommer integration af energi - , landbrugs - og transportsektoren, og ønsket om at være med i forreste række mht udvikling af teknologi til produktion af biobrændsler

A +

Reference

Gas Savings

Wind Biomass

A + A + A wish for a high degree of self-sufficiency with regard to fuels, as well as energy products resulting in independence of the develop-ment in the world. The focus is on change of the demand for energy and on development of low energy equipment.

A wish to increase the application of gas in the transport sector and in the production of electricity and heat. In addition there is the consideration with regard to reducing the CO2 emission and the dependence on oil in Northern Europe and in Russia.

A wish for more diversified fuel consumption and an increased share of renewable energy. Furthermore there is a focus on the integration of the energy, the farming, and the transport sectors, as well as a wish to be in the front line with regard to development of technology in the production of bio-fuels.

Not a momentum in a particular direction. The energy markets and

the fuel prices are crucial to the development

A wish for increased self- sufficiency and more renewable energy in the electricity and the heat production. Furthermore there will be a continued development of the Danish wind turbine industry.

No Isolated Formulas

25

In order to be able to evaluate the consequences of the technology scenarios

(savings, wind, gas, and biomass) there is a need for a reference. The refer-

ence presupposes a continued active effort in relation to energy savings and

energy efficiency improvement. A continuation of the energy savings effort

laid out in the government’s action plan of 2005 is assumed (cf.: the Danish

Energy Agency 2005: Technological Forecasting, Including a Strengthened

Energy Savings Effort, Resulting from the Agreement of 10. June 2005). This

would be the equivalent of the final energy consumption - exclusive trans-

port - remaining largely the same (430 PJ) till 2020 (this would match the

implementation of actual savings of approximately 1.7% per year).

On the supply side the energy markets and the fuel prices determine the de-

velopment. It is assumed that the configuration of the production technolo-

gies is approximately the same as today. However, the fuel consumption

does fall considerably over time. This is due to the fact that the existing

power stations will presumably be substituted with new high-efficiency sta-

tions (Best Available Technology) as replacements are implemented in the

power station park. In this context it is assumed that the investors in the

electricity sector expect that the fuel prices will not be lower than at present

and that CO2 ha a market value. If the investors act from a limited time hori-

zon, there is a risk that the fuel savings potential mentioned above will not

be will not be applied.

3.2. Goal Setting

Taking their point of departure in four overall goals, the scenarios analyse:

• Global responsibility

• Environment and climate

• National economy

• Supply security

The goals of environment, climate, and supply security are in a tentative

way converted to quantifiable goals for CO2 emission and oil consumption.

The national economy is included in the optimisation of the individual

technology scenarios, while global responsibility is applied in the choice of

mechanisms. Apart from the reference scenario, which is an extension of the

present energy system, the goals of all the scenarios are identical. In the ref-

erence scenario the energy markets and the fuel prices determine the expan-

sion of the production capacity and the development of technology. In the

other scenarios the goals are to cut Denmark’s emission of CO2 from 1990 to

2025 by half. This will be accomplished by halving the total consumption of

oil as of 2003.

Reference

Quantifiable Goals

26

3.3. A Combination Scenario

In the real world it would be an obvious choice to combine the mechanisms

of the various scenarios.

In a seminar with representatives from the Danish Folketing it was decided

to develop a combination scenario, which unites the efforts of the four tech-

nology scenarios. Over and above complying with the goals, the politicians

would in general like to have an energy system, which focuses on energy

savings and the application of wind power, and which allows them to be in-

dependent of import of large amounts of natural gas.

3.4. Method and Tools

The attempt to quantify Denmark’s energy situation 20 years into the future

has been carried out with considerable caution and humility. Societal, envi-

ronmental, and energy-based challenges will in many ways seem different

in 2025. Retrospective views of the energy situation and the debate on en-

ergy politics 20 years ago illustrate this issue.

All scenarios presuppose the same economic growth (1.6% per year in trade

and service businesses, 1.5% per year in the industry, and 1.9% in the private

consumption) and the same need for energy services, See figure 3.2.

Figure 3.2. Growth in Energy Services

The savings scenario differs from the other technology scenarios. The differ-

ence occurs through a focus on consumption issues – efficiency improvements

ReferenceIkke noget der

skubber i én retning. Energi-markederne


udviklingen

GasØnsket om at øgeanvendelsen af gasi transportsektoren ogtil produktion af el og varme. Hertil kommer hensynet til at mindske CO2 emissionen og olieafhængigheden.


BesparelserØnsket om høj grad af

selvforsyning af både brændsler og energiprodukter, og dermed uafhængighed af udviklingen i omverdenen. Fokus er påændring af energibehovet og udvikling af lavenergi udstyr

VindØnsket om øgetselvforsyning af brændsler og mere

vedvarende energi i el- og varmeproduktionen. Dertil kommer fortsat udvikling af den danske vindmølleindustri

BiomasseØnske om mere

diversificeret brændselsforbrug og øget andel af vedvarende energi. Hertil kommer integration af energi-og landbrugssektoren, og ønsket om at være med i forreste række mht udvikling af teknologi til produktion af biobrændsler

A+




udviklingen









A+A+




udviklingen









A+




udviklingen









A+A+

Growth in Energy Services

1

1,05

1,1

1,15

1,2

1,25

1,3

1,35

1,4

1,45

1,5

2003 2008 2013 2018 2023

Inde

x, 2

003=

1

Households

Production

Commerce & Service

Transport

Heating

27

of the energy consumption of the individual energy service. In the other three

technology scenarios the focus is on changing fuels and the configuration of

production technologies.

Measures to secure sufficient and environmentally friendly energy are ex-

tremely important, but must necessarily be seen in relation to the need for

energy. Furthermore, when it comes to the savings scenario it is important to

remember the following: most electricity consuming equipment and gear are

relatively short-lived and embody the possibility of making quick changes. By

way of example, one could say that the electrical equipment, which will be in

use in 2025, is not on the market today. A general feature of a development of

all technology scenarios is that the advance of new technology is associated

with great insecurity.

In the preparation of the scenarios there is in general a focus on efforts, which

can be carried out in our day and age, and on technical possibilities, which ex-

ist or are on their way into the market.

The supply and demand of energy agendas are to a great extent defined by

players outside Denmark. These players could for instance be energy suppli-

ers, producers, dealers selling energy consuming equipment, politicians in

other countries and in the EU, and not least the individual consumers. From a

political point of view the possibilities of planning a certain development are

relatively limited. Nevertheless society may via framework conditions, in-

citements, and the behaviour of the public sector itself influence and develop

the markets in a certain direction.

It has been decided to apply the same assumptions as the Danish Energy

Agency, namely an oil price of 50 USD per barrel and a CO2 quota price of 150

DKK per ton (the Danish Energy Agency 2006). The CO2 price of 150 DKK per

ton reflects the long-term international costs in reducing CO2 and not the

costs of damages related to the CO2 emission. According to the English Stern

Review (Stern 2006) the quotas might be considerably higher – approximately

490 DKK per ton. However, it must be stressed that there are considerable sci-

entific and methodical challenges associated with the assessment of the dam-

ages resulting from emission of green house gasses.

A number of limitations have been drawn with regard to the scenario calcula-

tions. For instance, emissions and energy consumption from the offshore sec-

tor (oil and gas) as well as from international air and sea traffic have not been

included. Another limitation is that only the green house gas CO2 is in focus

in the calculations (for instance the methane emission from gas motors has

not been calculated). In the economy area the costs of moving car drivers from

car to train and bike transport has not been included. Furthermore any spe-

cific costs involved in changing to more energy efficient cars have not been

part of the calculation.

In the project a model has been developed as a tool to quantify the scenarios.

Right from the beginning it was the intention that the scenarios should be

used as a tool to qualify and support the debate about various action plans in

Oil and the Price of

CO2 Quotas

Limitations

Model Tools

28

the future Danish energy system. For this reason the model tool is designed to

handle the changes in the scenarios. It has turned out to be useful during

meetings to be able to support the discussions of the scenarios in process.

The desire for speed means that the models handle reality in large-scale fea-

tures. For this reason they do not show the results with the precision, which

more detailed models with a longer computation time span are capable of.

The advantage of the model as a tool is that it is optimal when it comes to

supporting here and now discussions during meetings. This was essential to

the project. In order to test the models’ robustness in certain areas, the results

have been verified in more detailed tools. Energinet.dk has carried out calcula-

tions by means of the electrical system simulation tool SIVAEL and the results

confirm the systematic relations uncovered with the large-scale tool.

The preconditions of the scenarios are primarily based on publications from

the Danish Energy Agency. The development of technologies is based on

Technology Data for Electricity and Heat Generating Plants, March 2005, En-

ergy Savings in Households, Businesses, and the Public Sector of 2004 and in

the Action Plan for a Renewed Energy Saving Effort of 2005. The resource po-

tential is gained from the background reports to Energy Strategy 2025.

Limitations in the Model

30

4. The Combination Scenario The combination scenario is based on a combination of mechanisms from the

four technology scenarios, which focus on savings, gas, wind power, and bio-

mass respectively.

The savings scenario emphasises more efficient electrical equipment, im-

proved insulation of existing and new houses, as well as making new cars

more fuel-efficient. In the gas scenario high-efficiency gas fuelled heating

power stations supplant coal in the electricity production. The gas fuelled mi-

cro combined heat/power station supplants gas boilers in the households, just

as a considerable amount of natural gas is applied in the transport sector.

The wind power scenario undergoes a massive expansion, especially off shore,

and the focus will be on flexible electricity consumption. Electricity produced

by wind power is applied in heat production, primarily through highly effi-

cient heat pumps, just like a large part of the transport sector will be based on

electrical cars. The biomass scenario primarily emphasises an increased appli-

cation of biomass for the electricity and heat production, as well as bioethanol

and biodiesel in the transport sector. Furthermore biomass supplants oil in

the heating sector and in the industry.

The reference scenario and the four technology scenarios are described in

more detail in appendices 2-7. However, it should be noted that a smaller up-

dating of model calculations have taken place since the text and the graphics

in the appendix were prepared.

4.1. Why a Combination Scenario?

On a work seminar with the Future Panel the four technology scenarios were

presented and discussed. It was decided to develop a combination scenario,

which combines mechanisms from the four technology scenarios.

Over and above fulfilling the goals of cutting the CO2-emission and the oil

consumption in half, the politicians pointed to the fact that a combination

scenario must encompass energy savings and wind power, just like the trans-

port sector must contribute. The supply security was also emphasised in rela-

tion to oil, as well as gas and biomass. The competitive edge should also be

emphasised in the context of the energy price paid by the end users. This also

applies to the competitive ability developed by the sector of the Danish busi-

ness world, which produces equipment to the energy sector.

4.2. Preconditions and Results

The overall preconditions and results can be seen in table 4.1.

31

Combination Scenario

Fuel prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55 $/ton coal

CO2 quota price

150 DKK/ton CO2

Gross energy consumption (PJ)

Oil

Coal

Gas

RE

493

143

20

100

229

CO2 emission

19 million ton CO2

Final energy consumption (PJ) Excl. transport

304

Tabel 4.1. Overall Preconditions and Results

4.3. Final Energy Consumption

The combination scenario takes its point of departure in a substantial effort

matching the level in the saving scenario. The end users’ final energy con-

sumption thus declines from 435 PJ in 2003 to 304 PJ in 2025. The reduction

presupposes a tight follow-up on the effort embedded in the Energy Saving

Plan of 2005, which is in force up until 2013.

In figure 4.1 the final energy consumption in the combination scenario is

compared to the consumption of 2003 and to the reference scenario in 2025.

The figure also shows how the final energy consumption will develop if no

improvement occurs in the energy efficiency compared to the present.

(“Maintained efficiency”).

Figure 4.1. Final energy consumption (excl. the transport sector).

Final Energy Consumption 2025

0

100

200

300

400

500

600

700

2003 Maintained Effeciency Reference 2025 The combi scenario

PJ/year

The final energy

consumption is the

amount of energy

delivered above the

cadastral limit to the

consumer and to

vehicles. It is the sum

of the delivered

amount of electricity,

district heating, and

fuels for process and

heating, as well as

fuels for transport.

32

The combination scenario presupposes an efficiency improvement in the elec-

trical equipment sector, which results in a development in the cumulative fi-

nal electricity consumption the equivalent of 5950 kWh/inhabitant in 2003

descending towards 4000 kWh/inhabitant in 2025. This results in an ap-

proximately 50% reduction in electricity consumption in the households and

an approximately 15% reduction in the industry.

Insulation as well as heat recycling contributes to the reduction of the energy

consumption. Table 4.2. shows the efficiency development in energy con-

sumption for heating.

2005 Existing buildings

2005 New buildings

2025 Existing buildings

2025 New buildings

14 litres oil/m2 5,5 litres oil/m2 10 litres oil/m2 0 litre oil/m2

Table 4.2. Efficiency development in energy consumption for heating.

The reason that no energy consumption is expected in the heating of new

buildings in 2025 is an assumption that new buildings from 2015 will be es-

tablished as housing+ standard. Housing+ standard consists of energy neutral

buildings, which in the course of the year produce at least as much, or more

electricity and heat than they consume.

It is assumed that due to the emphasis on energy saving technology, more

electricity consuming equipment will enter the market with an inbuilt con-

trol, designed to break a circuit when the electrical system is challenged. It

might be control systems, which react to pricing signals, net frequencies, or

other issues. It is assumed that 250 GWh can be transposed from hours with

high electricity consumption and distributed to the remaining hours in the

year. This is the equivalent of taking 500 MW out of circuit in the 500 most

challenged hours.

4.4. Gross Energy Consumption

The distribution of the gross energy consumption in 2003, in the reference

scenario and the combination scenario can be seen in figure 4.2

Efficient Electrical

Equipment

Insulation of Buildings


33

Figure 4.2. The distribution of the gross energy consumption in 2003 (PJ), in the reference

scenario, and in the combination scenario.

The oil consumption is reduced from 283 PJ (40 %) in 2003 to 143 PJ in 2025 (30

%), while the gas consumption is reduced from 169 PJ in 2003 to 100 PJ in

2025.

The share of renewable energy is increased to approximately 45%. This en-

compasses 48 PJ wind and 177 PJ biomass. Furthermore there will be expan-

sion with suncells (0.5 PJ) and sun heating (2.5 PJ) to a smaller extent in the

context of the establishment of energy neutral housing.

Wind power is expanded so that in 2025 approximately 2600 MW will be on

land (with a higher yield than the present turbines) and approximately 1800

MW offshore turbines. The number of offshore turbines will be the equivalent

of the establishment of 9 – 10 offshore wind farm sites like Rødsand 2 (200

MW).

The fluctuating production from the wind turbines will primarily be evened

out by gas power, flexible electricity consumption and heat pumps. It is as-

sumed that approximately 900 MWheat heat pump capacity will be established

in the collective district heating system which will produce approximately

one sixth of the district heating needed. In the households it is assumed that

heat pumps cover 10% of the cumulative heating need.

Distribution of Gross Energy Consumption

284 277 143

238 112

20

169

138

100

117

137

229

-

100

200

300

400

500

600

700

800

900

PJ

RE

gas

coal

oil

2005 2003 The combi scenario

Oil and Gas

Consumption

Renewable Energy

Plug-in Hybrid Cars

Plug-in hybrid cars are

cars that run on electric-

ity, as well as on pet-

rol/diesel, and which

can be recharged from

the electric circuit. The

car is recharged in the

household, at a station

or at work, and uses

electricity for the main

part of the daily trans-

port. The combustion

engine is primarily

applied on longer trips.

34

4.5. Gross Energy Consumption Distributed in Sectors

In the transport sector it is assumed that an efficiency improvement of 25%

will be achieved in the car segment. There will also be limited restructuring

from car transport to bike and public transport. Electric cars and the so-called

plug-in hybrid cars will undertake in total 25% of the transport work for buses

and cars. Another 10% of the cars run on ethanol. 5% of the buses run on bio-

diesel, and 5% on hydrogen. In the truck sector it is assumed that 10% will

transfer to biodiesel.

In 2025, gas will furthermore be used as fuel in 25% of the Danish bus sector.

In order to delimit the expenses of the distribution system this could for ex-

ample apply to city buses in a number of selected cities. The gas distribution

network can be used to gradually introduce hydrogen in the transport system,

in the first instance by mixing hydrogen with gas.

Electricity will be applied to somewhat greater extent than today (an increase

from 50% to 60% of the cumulative person transport load in the train sector

and from 60% to 70% of the cumulative goods transport load in the train sec-

tor) as a result of electrification of the railroad network.

Figure 4.3. Gross energy consumption distributed into sectors.

In the combination scenario the greater part of the electricity production will

be wind power based (50 %) and biomass based (23 %). Among other things it

is assumed that there will be a full application of the biogas potential. Fur-

thermore gas contributes approximately 10%, coal 8%, waste 8%, oil 1%, and

sun cells ½%.

The Transport Sector

PJ

Fuel Consumption, Sectors

-

100

200

300

400

500

600

700

800

900

1.000

2003 Reference 2025 The combi scenario

Heating and process

Transport

District heating

Electricity

The Electricity Sector

35

Power Plant Capacity (MW)

Reference

The Combination Scenario

Coal 2100 525

Gas 3500 2130

Wind, land 2400 2640

Wind, Sea 770 1820

Biomass 280 330

Biogas 50 630

Waste 280 290

Suncells 0 150

Table 4.4. Assumptions about power plant capacity in the combination scenario.

The production of district heating will be based on 55% renewable energy (in-

cluding waste), 19% gas, 17 % heat pumps, 8 % coal and 1 % oil.

4.6. The Goals - CO2 and Oil Consumption

The CO2 emission will be reduced by approximately 60% from 1990 to 2025.

This is primarily due to the reduced energy consumption and the increasing

share of renewable energy in the consumption area.

Figure 4.4. CO2 emissions in 1990, 2003, the reference scenario, and the combination

scenario.

The District Heating

Sector

The CO2 Emission

Heat Pumps

A heat pump works like

a fridge. Via a compres-

sor energy is transferred

from an outdoor reser-

voir (open air/earth/

water) to an indoor

location for heating

purposes. Measured in

energy units, the heat

pump system can de-

liver up to four times

more heat compared to

the amount of electricity

they use. Heat pumps

can be used in collective

district heating systems,

as well as in private

households.

0

10

20

30

40

50

60

1990 2005 Reference 2025 Combi scenario

Million ton CO2

36

The oil consumption will be reduced to approximately 50% compared to 2003.

This is due to the effort in the transport sector, where there is partly an in-

creased efficiency improvement and restructuring from passenger car trans-

port to bus/train and bicycle, and partly a restructuring of the oil

consumption to bio fuels, as well as a phasing out of oil for heating purposes

in individual houses and in the industry.

4.7. Import and Export

In general terms the combination scenario causes a considerable reduction in

the import of fuels compared to the reference scenario. In spite of the effort it

will, however, still be necessary to have some degree of import of coal, as well

as gas (see figure 4.5).

Assuming that Denmark in 2025 will be awarded a CO2 quota the equivalent

of 50% of the 1990 level, it will be possible to sell approximately 7 million tons

CO2 as quotas.

Figure 4.5. Import and export of energy (PJ) and CO2 (Mt) in 2025 (Denmark’s production po-

tential minus Danish fuel consumption). Import of CO2 emission means, that Denmark must

reduce even more in order to remain within the allotted quota or buy quotas abroad. Export

means that Denmark can sell quotas abroad.

4.8. Challenges and Mechanisms

Supply Security

The marked reduction in energy consumption reduces the need and thereby

the dependence on imported fuel. Compared to the present there is a greater

diversification of the gross energy consumption.

The Oil Consumption

Import and Export of energi and CO2

(150)

(100)

(50)

0

50

100

150

200

oil

coal

gas

biomass

biogas

waste

electricity

CO2 (mt)

Reference 2025 PJ The Combi scenario PJ

Eksport

Import

37

Investments and Infrastructure

There is a need for relatively substantial investments in the existing building

stock and in more energy efficient equipment. There will also be investments

in offshore turbines and infrastructure for the accumulation of the production

from the turbines. Investments in offshore wind farm sites and electricity in-

frastructure demands a concerted planning effort. There is a need for further

analysis of the advantages in co-operating with Denmark’s neighbours and

further integration of the Northern European electricity markets.

There will also be a need for investments in heat pumps in collective heating

systems and for the development of flexible electricity consumption. Many of

the investments necessary for the development of flexible electricity con-

sumption will be implemented gradually, as the consumers’ electricity meters

and equipment are replaced with new and more advanced models, which en-

able response to hourly rates.

The increased application of biomass demands investments in new produc-

tion facilities for the production of bio fuels. There will also be a need for in-

vestments in the existing tank plants distributing bio fuels.

It will be necessary to analyse which roles and what distribution the district

heating and gas systems should have in the future Danish energy system.


With regard to the technology development necessary to realise the combina-

tion scenario, there will among other issues be a need for the development of

standard building elements with a high insulation capacity. The focus is on

windows, removal of traditional thermal bridges, etc. In some sectors of the

field of efficient electrical equipment Denmark has a leading edge (pumps,

fridges, controls, etc.) and should emphasise a continued front line position. In

other fields the technology must be imported.

In order to benefit from electrical consumption flexibility, there will be a need

to develop controls for intelligent electrical equipment, which to a greater ex-

tent will be able to adjust the consumption to the actual load factor of the

electrical system.

When the energy consumption spent on heating is diminished and the wind

power proportion is increased, the basis of district heating will decrease in

many areas.

It is important to clarify partly in which areas the district heating should have

priority, partly how energy loss in district heating can be reduced. Further one

should look at how the energy efficiency can be increased though a dynamic

application of heat pumps, geothermal energy, remote cooling, and heat stor-

age.

An efficiency improvement of 25% of the cars’ energy consumption entails an

improvement of the present motors. This concerns diesel, as well as petrol and

the so-called flexifuel cars, which run on a mixture of ethanol and petrol. Fur-

Buildings, Equipment,

Offshore Turbines

Heat Pumps, Flexible

Consumption

Biomass

Gas and District Heating

Buildings and Equipment

Intelligent Electrical

Equipment

District Heating

Transport

38

thermore there is a need for continued significant development of electrical

cars and a commercialisation of methanol engines.

In the transport area there might furthermore be a need to develop various

GPS based systems for the registration of the traffic patterns of the individual

cars and trucks, so that road pricing can be levied. These should vary in accor-

dance with the zones you pass through and the time of day you are on the

road.

Other priority areas will be research, development, and demonstration in the

field of offshore wind turbines (also in deep water), large heat pumps in the

district heating system, electrical system components securing safe operation

of the electrical system during intensive wind power production.

Export Potential

The export potential encompasses among other issues building components

for low energy construction and renovation of existing buildings. In addition

there are energy efficient electrical equipment (pumps, fridges, etc.), controls

to optimise the consumption in the context of the electricity circuit’s load fac-

tor, and road pricing technologies.

Furthermore, in the field of wind power technology – especially offshore wind

turbines - there will be a significant export potential.

In terms of biofuels, Denmark has knowledge about the production of ethanol,

as well as methanol. As a result there is a considerable export potential for

technology and products for the ethanol process. Denmark does not have

biomass potential to export ethanol.

In addition, Denmark’s export potentials will be strengthened in the area,

which one could term “the flexible energy system”. This is a system where the

consumers play a far more active role than they do today in order to create

cohesion in the system. Important components are flexible district heating

systems with electricity driven heat pumps, components for electrical cars (in-

telligent charging in the context of the needs of the electrical system, as well

as the needs of the drivers). There should also be an emphasis on activating

the consumers’ and the industry’s other flexible needs.

The Costs of the Combination Scenario

The economy of the scenario is calculated as the annualised extra costs com-

pared to the reference. The economy of the scenarios is calculated as the an-

nualised value of the entire energy system of the scenario year 2025. This

means the annual cost of instalments and financing through reinvesting the

energy system. This does not involve a national economic calculation, but an

economic parameter, which makes it possible to make a relative comparison

of the scenarios with the reference.

Furthermore it must be stressed that externalities associated with supply se-

curity, for example in the form of faulty fuel deliveries and environment

(with the exception of CO2) are not appraised in this study. The precondition

Offshore Wind Turbines,

Heat Pumps and Operation

of the Electrical System

Buildings, Electrical

Equipment, Control, etc.

Wind Power

Biofuels

The Felxible Energy

System

39

is that the consumption of fossil fuels decreases considerably in the combina-

tion scenario and that this scenario will produce a gain in the form of lower

environmental costs and a more secure delivery.

The calculations are in fixed 2006 prices and the interest of the calculation of

the financing costs has been set at 6% on the basis of the recommendations of

the Ministry of Finance with regard to national economic calculations.

The yearly extra costs of realising the combination scenario instead of the ref-

erence are estimated to be 1.6 billion DKK or the equivalent of approximately

300 DKK per inhabitant (see figure 4.6). This presupposes an oil price of 50$

per barrel in 2025 and a CO2 quota price of 150 DKK per ton.

In comparison the district heating of a household cost approximately 12.800

DKK (including fees) in 2005 (source: Danish District Heating).

The electricity consumption costs of an average household are approximately

8.750 DKK including fees (5000 kWh*1.75 DKK/kWh).

Figure 4.6. Annualised additional expenses of the combination scenario compared to the ref-

erence. The assumed price levels are: oil price of 50 $/t and a CO2 quota price of 150 DKK/ton.

There is a 6% interest. Please note: the costs are not discounted back to the present.

Compared to the reference, the fuel costs are reduced, while the investment

costs are larger. The operational costs are likewise increased in the combina-

tion scenario, among other reasons because biomass, biogas, and waste are

more difficult to handle than fossil fuels.

Difference in Yearly Annualised Costs between Scenario and Reference

(15.000)

(10.000)

(5.000)

0

5.000

10.000

15.000

Fuel Operation Investment Total Mill

ion

DK

K

40

It should be noted that there are great uncertainties associated with assessing

the future costs of the energy system. The fuel prices might for example vary

considerably from the preconditions applied here. If an oil price of approxi-

mately 60$ per barrel is applied, then there will be no extra costs involved in

the completion of the scenario.

Furthermore, preconditions for the technological development play a signifi-

cant role. In the scenarios it is assumed that in the long-term perspective

there will be a significant reduction in for example the investment costs re-

lated to the offshore wind turbines, among other reasons because the wind

turbines are increasing in size. If there will not be a reduction in costs in rela-

tion to the present, the scenario costs could increase by approximately 400-

500 million DKK.

On the other hand a precondition in the transport sector is that there are no

insignificant extra costs in delivering electric cars and plug-in hybrid cars

compared to conventional cars with a combustion engine. These costs will

among other things depend upon how the battery technology develops in the

future. If battery driven cars do not become more expensive than normal cars,

the extra costs in the combination scenario will be reduced by approximately

3 billion DKK per year.

The scenarios encompass a number of mechanisms applied in the contexts of

consumption, supply, and transport, which should be seen as interacting fac-

tors. Mechanisms, which in isolation can seem relatively expensive (for in-

stance heat pumps or electricity based cars), can become advantageous when

interacting with other mechanisms - for example wind power. In this project

it has not been possible to determine the marginal costs of individual meas-

ures.

Furthermore it must be noted that individual measures in the scenarios have

not been appraised. This also pertains to the costs of increasing the fuel effi-

ciency of the car population and the costs of relaying transport from individ-

ual cars to bicycles and public transport. The same goes for any advantages in

the way of lower costs in the health sector and less road congestion.

Mechanisms

Table 4.4. presents examples of some of the mechanisms which will be neces-

sary in order to carry out the combination scenario.

Costs of Mechanisms

41

Global EU Denmark

▪ Technology development

▪ Continuation of the Kyoto agreement or suchlike international agreements

▪ No Norms pertaining to electrical equipment (remove the least efficient products from the market) ▪ Norms pertaining to the energy consumption and emission of vehicles

▪ Goals pertaining to the share of renewable energy

▪ Dynamic labelling arrangements pertaining to equipment, buildings, and transport vehicles cf. ECO-design

▪ Goals for savings and sustainable energy

▪ Tightening of the building regulations

▪ Develop the market for energy saving companies (ESCO)

▪ Heat saving foundation

▪ Public purchasing policy

▪ Differentiated registration fees

▪ Transprot fees

▪ Supply of wind turbine parks and infrastructure plan ▪ Demonstration of heat pumps in the district heating circuit ▪ Demonstration of heat pumps substituting oil heating in buildings

Table 4.5. Examples of mechanisms necessary in order to realise the combination scenario.

The Devil’s Advocate and the Spin Doctor

Table 4.6. lists the pros and the cons of the combination scenario.

Spindoctor Djævelens advokat

Better global and local environment

Unrealistic to implement the necessary political measures

Supply security – decrease in fossil dependency – robustness in oli price contexts

Costs, besides the investment, of chang-ing the behaviour in households and in industry

Secures the Danish competitive ability – low energy costs – technology development

Dependent on European standards

Table 4.6. The devil’s advocate and the spin doctor in the combination scenario.

42

5. References

• Technology Data for Electricity and Heat Generating Plants, March

2005 (Teknologikataloget), www.ens.dk

• Energibesparelser i husholdninger, erhverv og offentlig sektor fra

2004, www.ens.dk

• Handlingsplan for en fornyet energispareindsats fra 2005,

www.ens.dk

• Baggrundsrapporterne til Energistrategi 2025 (including ressource

evaluations), www.ens.dk

• Stern Review of the Economics of Climate Change. HM Treasury,

2006.http://www.hm-treasury.gov.uk/independent_reviews/

stern_review_economics_climate_change/sternreview_index.cfm

• Teknologirådet (2006). Input to the Green Paper on a European

Strategy for Sustainable, Competitive and Secure Energy

44

Appendices

45

Appendix 1: Participants

The pivotal point of the project is the Future Panel, consisting of members of

the Danish Parliament, which represent all parties in the Danish Folketing.

The project is managed by a steering group, which represents a number of

Danish players – companies, institutions and organisations within the energy

sector.

The Future Panel

The Project’s Future Panel consists of:

Eyvind Vesselbo (V)

Jens Kirk(V)

Lars Christian Lilleholt (V)

Jacob Jensen (V)

Torben Hansen (S)

Jan Trøjborg (S)

Niels Sindal (S)

Jens Christian Lund (S)

Aase D. Madsen (DF)

Tina Petersen (DF)

Charlotte Dyremose (KF)

Per Ørum Jørgensen (KF)

Martin Lidegaard (RV)

Morten Østergaard (RV)

Johannes Poulsen (RV)

Anne Grete Holmsgaard (SF)

Poul Henrik Hedeboe (SF)

Keld Albrechtsen (EL)

Per Clausen (EL)

Emanuel Brender (KD)

The contact person in the Danish Folketing is secretary of the Energy Policy

Committee Jan Rasmussen

The Steering Committee

The project’s steering committee consists of:

Inga Thorup Madsen, the Metropolitan Copenhagen Heating Transmission

Company

Hans Jürgen Stehr, the Danish Energy Authority

Poul Erik Morthorst, the Risø National Laboratory

46

Peter Børre Eriksen, Energinet.dk

Benny Christensen, Ringkjøbing County

Flemming Nissen, Elsam

Helge Ørsted Pedersen, Ea Energy Analyses Ltd.

Poul Dyhr-Mikkelsen, Danfoss

Aksel Hauge Pedersen, DONG

Tarjei Haaland, Greenpeace

Ulla Röttger, the Energy Research Advisory council (REFU)

The Savings Group

A special group has been founded to handle the savings scenario. The group

consists of:

Göran Wilke, the Electricity Savings Foundation

Anders Stouge, the Energy Industry, DI

Lars Byberg, Energinet.dk

Kaj Jørgensen, the Risø National Laboratory

Ole Michael Jensen, the Danish Building Research Institute (SBI)

Kim B. Wittchen, the Danish Building Research Institute (SBI)

Peter Bach, the Danish Energy Agency

Kenneth Karlsson (the Risø National Laboratory) and Tarjei Haaland (Green-

peace) participate as representatives of the task force group and the steering

committee respectively.

The Task Force Group

The Project’s task force group consists of:

Anders Kofoed-Wiuff, EA Energy Analyses Ltd.

Kenneth Karlsson, the Risø National Laboratory

Peter Markussen, Elsam

Jens Pedersen, Energinet.dk

Jesper Werling, EA Energi Analyses Ltd.

Mette Behrmann, Energinet.dk

Project Management

Gy Larsen, the Danish Board of Technology

Ditte Vesterager Christensen, the Danish Board of Technology

47

Appendix 2: The Reference Scenario

B2.1. Why Have a Reference?

Because of the model’s simplified version of the energy system, the actual fig-

ures of 2003 and the model’s results are not directly comparable. There can be

certain aberrations, since the model assumes that the best technology is ap-

plied. The model makes a simplified optimisation of the energy system.

In order to assess the consequences of the technology scenarios (savings,

wind, gas, and biomass) there is a need for a reference. The reference takes its

point of departure in the present frameworks and technologies of the energy

system.

The reference presupposes a continued active effort in the context of energy

savings and energy efficiency improvement. It is assumed that there will be a

prolongation of the energy savings, effort laid out in the government’s 2005

action plan (cf. the Danish Energy Agency 2005: Technological Forecasting, In-

cluding a Strengthened Energy Savings Effort, Resulting from the Agreement

of 10. June 2005). This matches a scenario, where the final energy consump-

tion, excluding transport remains by and large unchanged: approximately 430

PJ up until 2020 (the equivalent of implementing savings of approximately

1.7% per year).

On the supply axis the energy markets and the fuel prices determine the de-

velopment. The configuration of production technologies is assumed to be the

same as at present. However, the fuel consumption does decrease considera-

bly over time. This is due to the fact that the existing power plants will pre-

sumably be replaced by new highly efficient plants (Best Available

Technology) when the power plant park is renewed. In this context it is pre-

supposed that the investors in the electricity sector invest with the expecta-

tion that the fuel prices will not drop below those of the present and that the

CO2 has a market value. If the investors act from a short time horizon there is

a risk that the fuel saving potential mentioned above would not be applied.

There are no demands concerning an internal Danish reduction of the CO2

emission and oil consumption. Like in the other scenarios, the goal is that

Denmark should reduce the CO2 emission with 50 % compared to the emis-

sion in 1990. In the reference this is achieved first and foremost through the

buying of quotas abroad.

B2.2. Preconditions and Results

Table B2.1. shows overall preconditions and results of the reference. More de-

tailed information can be found in Appendix 7.

48


Final Energy Consumption

It is assumed that the final energy consumption of the end users will decrease

from 435 PJ in 2003 to 413 PJ in 2025. The reduction presupposes a continua-

tion of the effort embedded in the Energy savings plan of 2005. It applies till

2013.

It is assumed that there will be 250 GWh of flexible electricity consumption as

a result of intelligent consumption. This is the equivalent of approximately

500 MW of electricity consumption being disconnected during the 500 hours,

where the electrical system is under the highest strain.

Gross Energy Consumption

The total gross energy consumption will be reduced by approximately 20 %

from 2003 to 2025.

It is particularly the share of coal that is reduced while the application of re-

newable energy and gas is on the increase.

The oil consumption is stabilised at 284 PJ. The expected growth in oil con-

sumption is primarily evened out by the reduction of oil consumption in elec-

tricity and heat production and the substitution of some oil fuelled heating

with heat pumps.

The combined heat/power production will be distributed approximately like

in 2003, where coal and biomass were applied in the central power plants,

while decentralised combined heat/power and individual heating will pri-

marily be based on gas and biomass. The electricity production based on wind

power will increase with 30% compared to the present, primarily because the

land-based wind turbines will presumably be replaced with newer models

with a higher yield.

The oil consumption is almost unchanged in the transport sector. The share of

biodiesel used in road, bus, and goods transport increases to 5% of the trans-

port related fuel consumption.

Reference 2025

Fuel Prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55$/t coal

CO2 quota price 150 DKK/t CO2


Oil

Coal

Gas

RE

673

284

113

138

138

CO2 emission 40 million ton CO2 Final energy consumption excl. transport (PJ)

410



49

The CO2 Emission

The CO2 emission decreases to 40 million ton CO2, the equivalent of approxi-

mately 23% compared to the 1990 level. The primary reason is primarily a

lower final energy consumption and the assumption that the best known

technology will be applied.

Import and Export

The reduction in the energy consumption also creates the possibility that

Denmark can export oil and gas in the future. There will still be an import of

coal, but to a lesser extent than in 2003.

B2.3. Challenges

Depending on whether or not new resources of oil and gas are located in the

North Sea, it is likely that the reference in 2025 will be more vulnerable to

fluctuations in energy prices or faulty delivery of oil than the present Danish

system. The Danish oil production is expected to be approximately 300 PJ in

2025, unless new wells are found, while the oil consumption in the reference

scenario is 284 PJ. With reference to the gas supply, Denmark will no longer be

self-sufficient. The gas consumption is approximately 140 PJ in the reference

scenario, while the production is 40 PJ, barring new finds.

The reference scenario takes its point of departure in the present best-known

technology, and it is assumed that there will be no need to make a special ef-

fort to develop new technologies. It is also assumed that no investments will

be made in infrastructure over and above the present capacity.

Supply Security

Investments and Tech-

nology Development

50

Appendix 3: The Savings Scenario

B3.1. Why Focus on Savings?

Energy saving is an important factor in Denmark’s energy future. With a con-

tinued economic growth, and a sustained growth in the demand for energy

services, energy savings will be necessary in order to secure that the con-

sumption does not grow at the same rate as the economic growth. Energy sav-

ings lessen the dependency of all types of fuels. A serious effort in energy

savings could also increase the possibility that renewable energy could cover

a great part of the electricity and heat production.


In the savings scenario the Danish Folketing and society are prepared to make

a great effort to further energy savings. At EU level great efforts are made to

increase demands in the field electricity consuming equipment and buildings

on a continual basis. On a national level there is a continued effort to apply

labelling arrangements, tightening building regulations, launch information

campaigns and arrangements supporting energy savings.

Table B3.1. shows overall preconditions and results of the savings scenario.

More detailed information can be found in Appendix 7.

Table B3.1. Overall preconditions and results of the savings scenario.


As a result of a comprehensive effort in the energy savings area, the final en-

ergy consumption (excl. transport) decreases from 435 PJ in 2003 to 285 PJ in

2025.

In general there is a decline in the need for heating. As a result it is assumed in

the scenario that in particular the oil consumption and the electricity con-

sumption can be reduced. On the other hand the gas and district heating con-

sumption only show a small decline. In the industry there are likewise

savings, which primarily lead to a reduction in the coal and oil consumption.

Savings Scenario 2025

Fuel Prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55$/t coal



Oil

Coal

Gas

RE

475

178

42

128

127

CO2 emission 25 million ton CO2 Final energy consumption excl. transport (PJ)

285

51

The implemented energy savings in households are shown in table B3.2. The

savings percentages indicate reduction in the electricity and space heating

consumption compared to the consumption in 2003. In the reference 35% less

electricity should therefore be applied to fulfil the same energy service as in

2003. In the savings scenario the equivalent figure is 75%. The savings per-

centages denote purely technical savings, such as for example improved

power electronics and control, as well as introduction of new technologies.

The applied savings levels are all within reach with technologies already

known and accessible. Diode lighting (not yet in commercial production) is

expected to reduce the electricity used for lighting considerably, while exist-

ing low energy light sources already consume less than 6% of the incandes-

cent bulb. At present low energy circulation pumps use only 20% of the

energy used by a “normal” pump, and in the electronic arena portable tech-

nology, optimised to low energy consumption, is on the rise.

End Use Reference Savings Scenario

Lighting 35 % 75 %

Pumping 35 % 75 %

Cooling / freezing 15 % 30 %

IT and electronics 40 % 80 %

Other electricity application 25 % 50 %

Cooking 30 % 65 %

Washing machines 35 % 70 %

TV/video 30 % 65 %

Space heating 25 % 40 %

Total 26 % 48 %

Table B3.2. The savings implemented in households.

It is assumed that there will be an unchanged consumption of domestic hot

water per person. It is further assumed that the extra effort in the reduction of

the heat loss of the buildings is made in the context of the usual renovation.

This means that by 2025 half the existing building stock will have been reno-

vated and will be in an average condition with regard to heat loss. This will

reduce the heat loss with approximately 80%.

In 2025 the cumulative floor space of buildings has increased with 10% and

half the new buildings are presumably housing+ standard. The savings gen-

erated by the housing+ houses are added to the savings in table B3.2. This

means that the cumulative saving on space heating will be 44,5%.

Households

Large Potentials

A laptop uses app. 1/10

of the energy used by a

stationary ”thick”

screen.

The average consump-

tion of the equipment

on the shelves in the

shops is app. 25% lower

than that of the equip-

ment park in the homes.

40 % of the electricity

consumption in offices

is applied outside nor-

mal working hours.

Source: Elsparefonden

Housing+ standard

Housing+ consists of

energy neutral

buildings, which on a

yearly basis consume

almost as much electric-

ity and heat as they

consume.

52

Concerning the business world, the savings potential has likewise been calcu-

lated for a number of end uses. Table B3.3 shows the savings percentages cal-

culated for the three main end uses.

End Use Reference Scenario Savings Scenario

Process energy 24 % 38 %

Electricity for other uses

than process 28 % 60 %

Space heating 25 % 45 %

Total 25 % 45 %

Table B3.3. The savings implemented in the business world.

The energy consumption in the transport sector decreases in the savings sce-

nario from 168 PJ in 2003 to 156 PJ in 2025, while the transport work has in-

creased by 24%. This development is ensured in among other ways by:

• Moving passenger transport from cars to public transport.

Public transport will be made much cheaper. Turnpike systems will

be established around the cities, as well as fees differentiated by

area and time of passage. On this basis it is assumed that transport

work undertaken by trains and busses each is increased by 3% of

the cumulative person transport work. At the same time the trans-

port work in individual cars will decrease with 6% of the overall

figure.

• Relaying passenger transport from cars to bicycles. Information

campaigns about health and satisfaction makes more people

choose the bicycle for short trips. Restrictions in car traffic near

schools, kindergartens, and shopping centres will be implemented.

In certain locations parking spaces will simply not be available and

in other locations there will be car free zones. On this basis it is as-

sumed that a further 4% of the transport work can be relayed from

car to bicycle.

• Improvement of vehicle efficiency. In order to improve the popular-

ity of efficient vehicles, a differentiated registration fee will be im-

plemented in Denmark. In this way the fees applying to energy

efficient vehicles will be significantly lower. Furthermore a new

road pricing charge will be implemented. Over and above applying

to transport in city and country zones, it will also depend on the

vehicle’s efficiency. At the same time the EU commission tightens

up on the demands on the car producers concerning emissions and

energy consumption per kilometre. With reference to the issues

mentioned, it is assumed that in the year 2020 the average mar-

keted models will be 50% more efficient than in the basis year. With

the delay in the system, with reference to replacement of the vehi-

Business

Transport

Plug-in Hybrid Cars













engine is primarily


53

cle park, it is assumed that the average vehicle park in 2025 will be

25% more efficient than in the basis year.

• Electric cars, plug-in hybrid cars, and biodiesel.

It is assumed that 10% of the car transport work in 2025 will be

covered by plug-in hybrid cars introduced as a result of the focus on

more efficient vehicles. Cars that run on electricity only cover an-

other 10% - first and foremost applied as fleet vehicles (mail and de-

livery service, taxies, etc.). This development should also be

encouraged with environmental zones, etc. Priority in taxi queues

for non-polluting taxies, etc. Furthermore 5% of the car transport

will be covered by biodiesel.

• Electric busses and plug-in hybrid busses. It is assumed that there

will be 10% plug-in hybrid busses and 10 % busses running on elec-

tricity only.

• Trucks. With regard to trucks, it is assumed that biodiesel will cover

5% of the transport work, while 10% will be covered by plug-in hy-

brids (mainly delivery vans for city traffic).

With regard to the filling ratio in passenger transport vehicles, the same pre-

conditions apply as in the reference scenario. The calculation involves a slight

decrease in filling ratio as a result of more cars per inhabitant.

In the savings scenario it is assumed that because of the focus on energy sav-

ing technology, there will be a substantial increase in electricity dependent

equipment with built in control to handle disconnections on an hourly basis,

when the electrical system is overloaded. The controls might react to pricing

signals, net frequencies, etc.

It is assumed that 550 GWh can be moved from the hours with the highest

electricity consumption and distributed across the remaining hours in the

year. This is the equivalent of approximately 600 MW being disconnected dur-

ing the 900 hours, where there is a significant strain on the system.


The lower demand for energy is significant in relation to the gross energy con-

sumption, which is reduced from 807 PJ to 475 PJ in 2025.


Reduction of the Gross

Energy Consumption

54

Figure B3.1. distribution of the gross energy consumption in the savings scenario. The share

of renewable energy in the savings scenario encompasses 33 PJ wind and 95 PJ biomass (incl.

waste).

The configuration of fuels is by and large the same as in the reference. The

amount of biomass applied in the electricity and heat production is kept at a

relatively constant level. For this reason wind and biomass cover 27% of the

cumulative gross energy consumption, as opposed to 19% in the reference

scenario. The oil consumption is reduced by 37%.

Distribution of Gross Energy Consumption in Sectors

The gross energy consumption is reduced for all sectors.

Figure B3.2. distribution of gross energy consumption in sectors in the savings scenario.


283 284 178

238 113

42

169

138

128

117

138

127

-

100

200

300

400

500

600

700

800

900

RE

gas

coal

oil

Reference 2003 Savings

Gross Energy Consumption, Sectors

-

100

200

300

400

500

600

700

800

900

1,000

2003 Reference Savings

PJ

heat

transport

district heating

electricity

55

The CO2 Emission

The CO2-emission is reduced from 52 mill ton in 1990 to 25 mill ton in 2025,

the equivalent of a 52% reduction.

Figure B3.3. C02 emission in the savings scenario.

Import and Export

The savings scenario still needs coal supply; however, only half the amount of

what is mentioned in the reference scenario. The net oil export is increased as

a result of the smaller domestic consumption.

Figure B3.4. Import and export of energy in the savings scenario, 2025 (Denmark’s produc-

tion potential minus domestic fuel consumption). Import of CO2 emission means that Den-

mark must reduce further in order to stay within the allocated quota or buy quotas abroad.

Export means that Denmark can sell quotas abroad.

CO2 Emission

0

10

20

30

40

50

60

1990 2003 Reference Savings

Mill

ion

tons

CO

2

Greater Oil Export

Import og export of Energy and CO2

(150)

(100)

(50)

0

50

100

150


Reference PJ

Savings PJ

Export

Import

56

The Goals

In the savings scenario the oil consumption is reduced by 37% in relation to

2003, while the CO2 emission is reduced by 52% in relation to 1990.

As a result further application of mechanisms would be needed in order to

reach the goals of cutting the oil consumption in half. A way of reaching both

goals could be to replace individual oil furnaces with heat pumps.

B3.3. Challenges and Mechanisms

The energy savings lower the demand for, and thereby the dependence on

imported fuel.

There is a need for relatively substantial investments in the existing building

stock and in more energy efficient equipment. On the other hand the scenario

does not give cause for expansion of the existing infrastructure – on the con-

trary.

There is a need for continued development of standard building components

with a high degree of insulation capacity. The focus is on windows, removal of

traditional thermal bridges, etc.

In the field of efficient electrical equipment Denmark has a leading edge with

regard to pumps, fridges, controls, etc. Denmark should make an effort to re-

main in the frontline in these areas. In other fields the technology must be

imported.

There will be a need for the development of controls for intelligent electrical

equipment, which to a greater degree can adjust the consumption to the ac-

tual load stress factor.

In the transport area there will be a need for the development of various GPS

based systems for the registration of traffic patterns of individual cars and

trucks. In this way road pricing can be implemented. The road pricing will

vary in accordance with the zones you travel through and the time of day you

travel.

The export potential encompasses among other issues construction compo-

nents for low energy building and renovation of existing buildings. Further-

more there will be a focus on energy efficient electrical equipment (pumps,

fridges, etc.) controls for optimising consumption in relation to the load stress

of the electricity circuit and road pricing technologies.

Mechanisms

Table B3.4. presents examples of some of the mechanisms which will be nec-

essary to implement the savings scenario.

Supply Security

Investments and

Infrastructure


and Export

- Development Needs

- Export Potential

57

Table B3.4. Examples of mechanisms which are necessary on order to realise the savings

scenario.


Table B3.5. A catalogue of the pros and cons involved in the savings scenario

direction.

Table B3.5. The devil’s advocate and the spin doctor in the savings scenario.

Global EU Denmark

▪ Technology development – equipment and gear

▪ Continuation of the Kyoto

agreement or suchlike international agreements

▪ Norms of electrical equipment (remove the least efficient products from the market)

▪ Norms of vehicle energy consumption and emissions

▪ Dynamic labelling arrangements for equipment buildings and transport vehicles, cf. ECO-design

▪ The public institutions should blaze a trail and create an example in order to create a market

▪ Campaign/support for

following up various labelling arrangement

▪ Advanced energy decla-

rations– for example making the energy consumption of buildings transparent via web application

▪ Revised tax and fee implementation structure for home owners – the better the energy label the house has, the lower the property tax or the higher the mortgage loan frame ▪ Removal of transport tax reduction

▪ Retention of high, but differentiated registration fees

▪ Transport fees

▪ Campaigns furthering bicycle culture and public transport

The Devil’s Advocate The Spin Doctor

You cannot force people to buy effi-cient equipment

Contributes to a society which puts less strain on the environment and the resources

Normative control is imperative Increased supply as a result of diminished needs for import of fossil fuels

Unrealistic to implement the necessary political efforts

Great possibilities for Danish export - low energy costs and high technological development

Dependence on EU standards - you cannot stand alone

Opens up a possibility to cover a great sector of the Danish energy consumption with sustainable energy

Not all costs are included in the calcu-lation

There is only a need for half the capacity in the form of thermal power pants in comparison with the other scenarios

58

Appendix 4: The Gas Scenario

B4.1. Why Focus on Gas

Natural gas can play a central role in a future energy system, where oil is not

as dominant as in the present. Gas is already today applied in the production

of electricity and heating and there is a well-developed gas transmission and

distribution network. Furthermore, gas can be applied instead of oil in the

transport sector and in new micro combined heat/power plants, which re-

place the existing natural gas furnaces. At the same time the combustion of

natural gas yields a considerably lower CO2 emission than the burning of coal

and oil. Changes in favour of the gas scenario can occur without great de-

mands to the technology development.

Denmark’s gas reserves are decreasing and if a great share of the energy con-

sumption is based on gas, it will be necessary to prepare import of gas either

in volatile or fluid form. There are considerable gas resources within trans-

mission distance in Norway and Russia. In recent years there has also been a

considerable technological development, which in time will give the transport

of fluid gas by sea a competitive edge.


In the gas scenario natural gas replaces the application of coal in the central

coal fuelled combined heat/power stations. Furthermore micro combined

heat/power plants will be established in homes, which today have gas fur-

naces and access to the gas network. Micro combined heat/power plants are

considered to be heat/power plants. They are dimensioned in accordance with

the heat consumption and are expected to have a higher electricity production

than the need for electricity in the individual households. In the transport sec-

tor the oil consumption expended in the transport work of cars and busses

will in part be replaced with natural gas.

The Gas Scenario 2025

Fuel prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55$/t coal

CO2 Quota price 150 DKK/t CO2


Oil

Coal

Gas

RE

657

175

6

302

175

CO2 emission 31 million ton CO2 Final energy consumption (PJ)

Excl. transport

413

Table B4.1. Overall preconditions and results in the gas scenario.

59

Energy Consumption

It is assumed that the final energy consumption of the end users will decrease

from 435 PJ in 2003 to 413 PJ in 2025. It is also assumed that the reduction en-

tails a continuation of the effort embedded in the Energy Savings Plan of 2005,

which is in force up until 2013. The share of oil in the gross energy consump-

tion is reduced from approximately 40% today to approximately 27% in 2025.

The oil will be replaced by gas, but also the share of biogas for combined elec-

tricity and heat production on the central plants will increase (could also be

applied in transport).

It is assumed that there will be 250 GWh of flexible electricity consumption as

a result of intelligent consumption. This is the equivalent of a disengagement

of approximately 500 MW of electricity consumption during the 500 hours

when the electrical circuit is under high pressure.


In 2025 the share of natural gas consists of 46% of the gross energy consump-

tion. In 2003 the equivalent figure was 20%. The gas is applied in combined

heat/power production in central, decentralised, and individual micro com-

bined heat/power plants, as well as in transport.

It is assumed that 50% of Danish households with gas furnaces will have mi-

cro combined heat/power plants installed. This is the equivalent of 175.000

households out of 2.5 million households. Furthermore, gas partly replaces oil

in the production sector, where the share of coal will for all intents and pur-

poses be phased out.

The share of renewable energy is increased to 27%, especially in the form of

biogas, which is applied in electricity and heat production. The share of re-

newable energy applied in electricity production purposes is around 48%.

Electricity production based on coal will be replaced completely by gas, which

by then will constitute 50% of the gross energy consumption in the electricity

production.


Gas Covers Almost 50%

Renewable Energy

60

Figure B4.1. The distribution of gross energy consumption in the gas scenario. The share of

renewable energy in the gas scenario encompasses 32 PJ wind and 143 PJ biomass (including

waste).

The oil consumption is reduced from 283 PJ in 2003 to 175 PJ in 2025, the

equivalent of 38%.

Distribution of Gross Energy Consumption in Sectors

Gas in the Transport Sector

In the transport sector gas covers 50% of the passenger traffic and 50% of the

bus traffic. Likewise 20% of the transportation of goods by truck is covered by

gas.

In all gas will cover 36% of the cumulative energy consumption in the trans-

port sector. It will happen at the cost of diesel and petrol. See figure B4.3.

The application of micro combined heat/power is considered to be combined

heat/power and for this reason the share of district heating will increase.


283 284 175

238 113

6

169

138

302

117

138 175

-

100

200

300

400

500

600

700

800

900

PJ

RE

gas

coal oil

2003 Reference Gas

The Oil Consumption

61

Figure B4.2. Distribution of gross energy consumption in sectors in the gas scenario.

The CO2 Emission

The CO2 emission will be reduced with 40% from 1990 to 2025.

Figure B4.3. Emission of CO2 in the gas scenario.

Import and Export

In the gas scenario considerable amounts of gas must be imported. Most likely

it will come from Norway and Russia. However, it might also be a possibility

to establish an LNG terminal.


-

100

200

300

400

500

600

700

800

900

1,000

2003 Reference Gas

PJ

heat

transport

district heating

electricity

CO2 emission

0

10

20

30

40

50

60

1990 2003 Reference Gas

Mill

ion

ton

CO

2

Considerable Amounts

of Gas

62

Figure B4.4. Import and export of energy and CO2 in the gas scenario, 2025 (Denmark’s pro-

duction potential minus domestic fuel consumption). Import of CO2 emission means that

Denmark must reduce further, in order to stay within the allotted quota, or buy quotas

abroad. Export means that Denmark can sell quotas abroad.

The Goals

In the gas scenario the oil consumption is reduced 38% compared to 2003,

while the CO2 emission is reduced with 40% compared to 1990.

Further mechanisms would have to be applied if the goals are to be attained.

One way of attaining the oil scenario goal would be to replace the oil con-

sumption in the transport sector with biofuels or electricity. It will also be a

possibility to replace some of the industry’s oil consumption in the process-

heating sector with electricity or biofuels. In order to reach the CO2 standard

more wind or biofuels can be applied in the electricity and heat production in

households as well as in the industry.


The increase in the gas consumption results in needs for investments in the

gas transmission, the distribution network, and presumably also in gas stor-

age facilities. Furthermore there will be investments in the transport sector,

which should be expanded with storage capacity in gas stations. Investments

in means to transport the gas to the tank stations should also be made.

From approximately 2015 Denmark’s energy consumption of gas will be

based on import. It is assumed that no more gas fields will be discovered and

that the extraction from the existing fields will be increased.

Figure B4.6 shows the Danish Energy Agency’s prognosis for a future Danish

gas production distributed across backup contributions, technology contribu-

tions (increased amount of extraction) and exploration contributions (new


(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

150


Reference PJ

Gas PJ

Export

Import

Supply Security and

Investment

LNG

(Liquid Natural Gas)

More than half of the

planet’s known gas

reserves are located

more than 3.000 km

from a possible place of

consumption. This has

resulted in an intensive

development of tech-

nology to be applied in

the conversion of natu-

ral gas from gas to fluid, thereby providing a

possibility of transport-

ing large amounts.

63

findings). In comparison the Danish consumption of gas is today approxi-

mately 4 billion Nm3. In the gas scenario this figure climbs to approximately

12 Nm3 (300 PJ).

Figure B4.5. The Danish Energy Agency’s prognosis for a future Danish energy production

distributed across backup contributions, technology contributions, and exploration contribu-

tions (The Danish Energy Agency 2005: ”Analysis Concerning Oil and Gas Resources” p. 72).

For the purpose of covering gas consumption, it is assumed that there will be

an expansion of the transmission pipelines to the Norwegian gas fields in the

North Sea. Furthermore it is assumed that a branch connection will be estab-

lished to the planned gas pipe between Russia and Germany, and that an LNG

terminal is established. In all, these investments amount to approximately 5

billion DKK. In addition there will be an expansion of the land-based trans-

mission network, establishment of pumping stations and connections to the

central power stations, which in all will amount to approximately 2.5 billion

DKK. It is assumed that the existing distribution network will not be ex-

panded, because the micro combined heat/power plants replace the existing

gas furnaces.

In this scenario there will be a particular need for technology development in

the application of gas to micro heat/power. Furthermore there will be a need

for the development of systems for the incorporation of many and smaller

production units in the energy system. The application of gas to other electric-

ity and heat production, as well as in the transport sector, is by known tech-

nology.

There is export potential in the sales of micro heat/power. The concept links

up well with the tendency to individualisation and the safeguarding of own

electricity supply.

exploration contribution

technology contribution

production and backup contribution

Billion Nm3


and Export

- Needs for Development

- Export Potential

64

Mechanisms

Table B4.6 presents examples of some of the mechanisms necessary to im-

plement the savings scenario.

Globalt EU Denmark

▪ Securing more supply sources

▪ … Establishing an infrastructure for import of gas

▪ Securing more supply sources ▪ Promotion of gas in the transport sector (stan- dardising, norms, and possibly goals with regard to gas in the transport sector)

▪ Establishing of an infrastructure for import of gas ▪ Securing more supply sources

▪ Research, development and demonstration of micro heat/power technology (small gas turbines, fuel cells)

▪ Development of systems for the incorporation and control of many small units in the electrical system

▪ Norms or fee reductions in return for buying gas for transport

Table B4.6. Examples of mechanisms necessary for the realisation of the gas scenario.


Table B4.7. A list of the pros and the cons involved in the scenario.


Instead of being dependent on oil we now become dependent on gas

The gas can be delivered from more stable political regimes

The gas can not be stored as easily as coal and oil

An efficient way of reducing the oil consumption in the transport sector

There is a need for investment in infra-structure, not least in the transport sector

Optimum utilisation of the established gas transmission and distribution net-work

Gas is the first step on the way to a CO2 free energy system

No need for development of risky tech-nology

Table B4.7. The devil’s advocate and the spin doctor in the gas scenario.

65

Appendix 5: The Wind Scenario

B5.1. Why Focus on Wind Power?

Wind power is one of the great success stories in Danish energy policy. Today

wind power covers approximately 20% of the cumulative Danish electricity

consumption and the Danish manufacturers of wind turbines are responsible

for a substantial part of the world’s production of wind turbines. In the future

it is expected that the international demand for wind turbines will increase at

explosive rates. If the Danish industry is to maintain its position in the mar-

ket, it is important to back up the domestic industry. There is among other is-

sues a need for further development and demonstration of offshore wind

turbine technology and a need to test technologies and processes, which se-

cure an intelligent interaction with the rest of the energy system. Denmark is

a small country and for this reason it is important to strengthen the busi-

nesses, for example wind power, where the Danes already have an edge. For

this reason we cannot afford to spread our efforts across too many areas, and

therefore we focus on wind power in this scenario.

In addition to the business perspectives, wind power is also the cheapest re-

newable energy technology in electricity production under Danish climate

conditions. Bearing in mind the future expectations about an improvement of

the pricing/output ratio for wind turbines, electricity produced by wind

power may become even cheaper than coal and gas power.


The wind scenario focuses on electricity as energy carrier – in the heat sector

(via heat pumps) and in the transport sector (via electrical cars and plug-in

hybrid cars). The intention is to secure a high-energy efficiency and an inter-

action between the electricity sector, the heating sector, and the transport sec-

tor, which enables the incorporation of large amounts of wind power in the

electricity sector.

At the same time there is a focus on flexible electricity consumption in the

households, as well as in the industry. The purpose is to enable a relocation of

consumption to those hours best suited in the electricity system. This could

for example be scheduled in such a way that the consumption is increased

when the wind is up and reduced when less wind power is produced – for in-

stance on cold and quiet winter days.

Plug-in Hybrid Cars













engine is primarily


66

Table B5.1. Overall preconditions and results.


The final energy consumption of the end users decreases from 435 PJ in 2003

to 384 PJ in 2025. This entails a continuation of the effort begun in the Energy

Savings Plan of 2005. Furthermore the oil consumption in the heating sector

will be relayed to efficient heat pumps, which entails further reduction in the

final energy consumption.

The share of oil in the final energy consumption will be reduced from 20% to-

day to 10% in 2025. The relaying will occur primarily by changing the energy

source from oil to electricity in the operation of heat pumps.

The development of the flexible electricity consumption is a central element

in the wind scenario, implemented in order to secure an economically sound

implementation of wind power. With regard to a flexible consumption, the

most important mechanisms in the scenario are:

- Electricity propelled heat pumps in the district heating system,

which can increase the electricity consumption when the wind

power production is considerable and the electricity price low. In

the wind scenario it is assumed that heat pumps (with in all 2600

MWheating capacity) will cover approximately 30% of the demand

for district heating.

- Electric cars and plug-in hybrid cars, capable of flexible charging in

relation to the needs of the electrical system, such as increasing the

electricity consumption at night and during windy periods. In prin-

ciple the electric cars will also have the possibility of supplying the

circuit with energy in situations when the strain on the system is

high. However, the latter situation is not accounted for in the pre-

sent scenario.

- Hydrogen cars where the hydrogen is produced in an electric con-

duction plant (fission of water to hydrogen and oxygen via electric-

ity), which has a flexible production mode that can be applied in

relation to the needs of the electrical system.

Wind Scenario 2025

Fuel prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55$/t coal



Oil

Coal

Gas

RE

594

176

6

177

235

CO2 emission 23,4 million ton CO2 Final energy consumption (PJ) 384


Heat Pumps

A heat pump works like

a fridge. Via a compres-

sor energy is transferred

from an outdoor reser-

voir (open air/earth/

water) to an indoor

location for heating

purposes. Measured in

energy units, the heat

pump system can de-

liver up to four times

more heat compared to

the amount of electricity

they use. Heat pumps

can be used in collective

district heating systems,

as well as in private

households.

67

- Electricity consuming equipment with built in controls, which can

adapt the consumption to pricing signals and disconnect when the

electrical system is under stress. The equipment could be from the

industry, the service sector, households, and should either react to

pricing signals or net frequency (the “pulse” of the electrical sys-

tem).

- Increased application of electricity in heating via heat pumps will

contribute to increasing the flexible electricity consumption poten-

tial compared to the present.

In all the electricity consumed by traffic (electricity and hydrogen) increased

with approximately 5 TWh in the scenario – the equivalent of one seventh of

the present cumulative electricity consumption. Of the 5 TWh it is assumed

that 1/2 will be consumed at night, ¼ during the hours when it is best for the

electrical system, and ¼ in non flexible ways.

In a similar way it is assumed that the consumption can be reduced during

the hours when that would be best for the electrical system. This would

amount to approximately 500 hours every year, where the cumulative Danish

electricity system on average will be reduced by approximately 1000 MW – or

the equivalent of 15% of the peak load consumption.

Fuel Consumption

The cumulative fuel consumption in the wind scenario in 2025 will be ap-

proximately 15 % less than the figures mentioned in the reference scenario

(570 PJ seen in relation to 673 PJ). In comparison the fuel consumption was

approximately 840 PJ in 2003. See figure 11.

The share of renewable energy is increased in such a way that it constitutes

approximately 40%. Coal for electricity and heat/power production is phased

out and only a very small coal consumption is maintained in the industry. The

oil consumption is reduced to approximately 176 PJ, the equivalent of ap-

proximately 55% of the consumption in 2003.

The application of wind power is increased considerably in the scenario, in

such a way that wind covers 60% of the cumulative electricity production in

2025. The expansion of wind power will happen almost exclusively through

the construction of offshore wind turbines, which in 2025 are assumed to

have a cumulative capacity of approximately 6000 MW. It is assumed that the

wind turbine capacity on land will by and large be unchanged compared to

the present output.

In the transport sector 20% of the transport work done by cars and busses will

be covered by electricity, 5% by biodiesel, and 5% by hydrogen. Trucks use 5%

electricity, 5% biodiesel, 5% hydrogen and the rest is diesel.

With regard to train transport, electricity will be applied to a somewhat

greater extent than today (there will be an increase from 50% to 60% of the

cumulative passenger transport carried out by trains and from 60% to 70% of

10% Less Fuels

Wind Power Constitutes

60% of the Electricity

Consumption


68

the cumulative goods transport carried out by trains), for example as a result

of increased electrification of the railroad net.

Figure B5.1. The distribution of gross energy consumption in 2003, the reference scenario,

and the wind scenario. The share of renewable energy in the wind scenario encompasses 104

PJ wind and 120 PJ biomass (including waste).

The oil consumption is considerably reduced from approximately 283 PJ in

2003 to approximately 176 PJ in 2025. By way of comparison the oil consump-

tion in 2025 is approximately 284 PJ in the reference scenario.

The reduction in the oil consumption is gained by applying electricity and hy-

drogen in the transport sector. Furthermore there is a considerable phasing

out of oil for heating in private homes and in the industry. The oil consump-

tion is replaced by electricity, which is applied in efficient heat pumps among

other places.

Figure B5.2 shows the distribution of fuel consumption in sectors in 2003 in

the reference scenario and in the wind scenario. It is evident that the electric-

ity consumption increases in the wind power scenario compared to the refer-

ence scenario and 2003. This is due to the increased application of heat pumps

for heating purposes in households and in the service sector, and increased

application of electricity in the industry as a replacement for oil. On the other

hand the final energy consumption in the transport sector decreases because

the degree of efficiency of electric motors and hydrogen based fuel cells is

considerably higher than for conventional combustion motors.


284 283 176

238 112

6

169

138

177

117

137

236

-

100

200

300

400

500

600

700

800

900

2003 Reference 2025 Wind

PJ

RE gas

coal

oil

The Oil Consumption Is

Reduced Considerably

Distribution of Fuels in

Sectors

69

Figure B5.2. Distribution of gross energy consumption in sectors.

Import and Export

In the wind scenario the possibilities of exporting oil are increased considera-

bly compared to the reference scenario, see figure 13. As coal on the whole is

phased out the need of import of coal will be reduced to a minimum, while

the rise of the gas consumption increases the need for import of gas. The con-

sumption of biomass in the scenario can be covered by national resources.

Large amounts of wind power will be relayed to the electrical system. Even if

efforts are undertaken in Denmark with a view to the utilisation of wind

power (electricity for transport, electricity for heating via heat pumps, and

flexible electricity consumption), the exchange of electricity with the

neighbouring countries will be decisive with regard to gaining the full use of

the value of the wind power. Hydroelectric power in Norway and Sweden can

be used to store the wind energy, and the exchange across the borders of these

countries can contribute to levelling out the natural variations in the wind

power production.

In the scenario approximately 5.3 PJ or (1.5 TWh) are exported to our

neighbouring countries in times where the wind power production exceeds

the national consumption. It is assumed that the exported electricity will be

sold at 15 øre/kWh, so that the electricity export on a yearly basis has a turn-

over of approximately 225 million DKK (approximately 1.5 TWh * 150

DKK/MWh). A relatively low export price has been set – considerably lower

than the present average electricity prices – since it is assumed that wind

power in the other Nordic countries will contribute to the dumping of the

electricity prices in times of strong winds.


-

100

200

300

400

500

600

700

800

900

1,000

2003 Reference 2025 Wind

PJ

heat and process

transport

district heating

electricity

70

Figure B5.3. Import and export of energy and CO2 in 2025 (Denmark’s production potential

minus the national fuel consumption). Import of CO2 emission means that Denmark must

reduce further in order to stay within the allotted quota or purchase quotas abroad. Export

means that Denmark can sell quotas abroad.

CO2 Emission Is Cut in Half

CO2 emission will be cut by more than 50% compared to the 1990 level, so

that in 2025 23.4 Mt will be emitted. See figure 14. In comparison the actual

emissions from the energy sector were approximately 52 Mt in 1990 and in

the reference scenario 40 Mt.

Given the precondition that Denmark achieves a yearly CO2 quota of 26 Mt

(the equivalent of 50% of the CO2 emission in 1990) Denmark could sell 2 Mt

CO2 a year to other countries. With a CO2 price of approximately 150 DKK/ton

the CO2 export has a value of 300 million DKK.

(150)

(100)

(50)

0

50

100

150

Reference 2025 PJ Wind PJ


Energy Balance (- deficit and +surplus)

71

Figure B5.4. Emission of CO2

The Goals

In the wind power scenario the goal of a reduced CO2 emission will be

achieved. At the same time, the goal of reducing oil consumption by 50%

compared to 2003 will be close to being fulfilled. Application of further

mechanisms will, however, be necessary. One way of attaining the goal with

regard to oil could be further replacement of oil in the industry sector with

biomass or increasing the application of electricity in the transport sector.

Within the time horizon of 2025 an increased application of electric cars (over

and above what is already in the scenario) will, however, entail an enforced

replacement of the vehicle park, a move which at present is not considered

realistic.


The scenario increases the supply security with regard to coal and oil consid-

erably, but the need for import of gas will increase a little. There will be no

need to import biomass.

In the scenario there is a need for a massive investment in offshore wind tur-

bines and infrastructure for the accumulation of the production from the tur-

bines. Furthermore there is a need for investments in collective and

individual heat pumping systems and for the development of flexible electric-

ity consumption. Many of the investments necessary for the development of

flexible consumption could be made gradually, as the consumers’ electricity

meters and equipment are replaced with new and more advanced models,

which enable a response to hourly pricing. Investments in offshore wind tur-

bines and electricity infrastructure would demand collective planning in close

co-operation with Denmark’s neighbours.

CO2 Emission

0

10

20

30

40

50

60

1990 2003 Reference Wind

Mill

ion

ton

CO

2

Supply Security

Infrastructure and

Investment

72

The investments in the circuit infrastructure for the accumulation of wind

power are discussed in chapter 6. The costs of investments in the electricity

circuit designed to assimilate approximately 6000 MW of offshore turbine ca-

pacity are assessed to be approximately 9 billion DKK – the equivalent of 300

million DKK for an offshore wind turbine plant of 200 MW.

The scenario’s most significant export potentials are naturally located within

wind power technology – especially offshore turbines. In this context Den-

mark would be able to develop competences, which would be in demand in

the other North Sea countries, the other Baltic countries, and in other areas

abroad, where there are favourable conditions for offshore wind turbines.

Furthermore, Denmark’s export potentials will be strengthened in the area,

which one could term “the flexible electrical system”. This refers to an electri-

cal system, where consumers, compared to the present, play a much more ac-

tive role in the creation of a cohesive system.

Important components are flexible district heating systems with electricity

driven heat pumps, components for electrical cars (intelligent charging in the

context of the needs of the driver, as well as the needs of the electrical system)

and not least an activation of any other flexible consumption of the industry

and the consumers. Development of flexible electricity consumption is not

just interesting in countries with a high ratio of wind power, but generally in

all countries which have liberalised their energy markets, because a flexible

energy consumption will contribute to ensuring the supply security (the bal-

ance of the electrical system hour by hour).

In the scenario there will be special needs for research and development

within the following areas:

- Offshore wind turbines (also in deep water)

- Large heat pumps in the district heating system (demonstration ac-

tivities)

- New components for the electrical systems (to secure a safe opera-

tion of the electrical system during high wind power production)

- Development of flexible electricity consumption (interconnected

systems, equipment which consumes in accordance with pricing

and system needs)

- Hydrogen technology

Mechanisms

Table B5.6 presents examples of some of the mechanisms which will be neces-

sary to implement the scenario.

Export Potential

Needs for Research

and Development

73

Global EU Denmark

▪ Work for a global agreement about the promotion of electrical cars and cars with a low fuel consumption

▪ Coherent circuit planning for sea wind in the Baltic Sea and in the North Sea (between authorities and between TSOs) ▪ Energy efficiency norms for new cars

▪ Supply of offshore wind turbine parks

▪ Demonstration of large electricity propelled heat pumps in the district heating circuit

▪ Fee structure which makes electricity propelled heat pumps interesting to private consumers

▪ Research and development in flexible electricity consumption in the industry and in house holds

▪ Initiatives to promote for example electric cars and hybrid cars, e.g.: - Environmental zones - Registration fees - Public purchasing policy - Support to niche markets

▪ Relaying of registration fees to new cars so the most energy efficient will be preferred

Table B5.6. Mechanisms for the realisation of the wind scenario.


Table B5.7. The pros and the cons of the wind scenario.


The scenario’s economy depends among other things on a cost reduction of offshore wind turbines

High energy efficiency (=>low gross energy consumption)

Cost efficiency

Development of large export potentials in the fields of wind power and flexible electricity consumption.

The scenario assumes that people will drive electric cars or hybrid plug-in cars. Whether or not this will happen depends among other things on the development of electric cars. Will they be able to compete with conventional cars – economically as well as in the context of satisfying mobility needs? This development will only be con-trolled from Denmark to a limited ex-tent (hence it would be interesting to get the EU to join the project)

Electricity and hydrogen powered cars can solve problems of local transport pollution

Table B5.7. The devil’s advocate and the spin doctor in the wind scenario.

74

Appendix 6: The Biomass Scenario

6.1. Why Focus on Biomass?

The problems in the transport sector involve the supply security and stress

factors levied on the environment. The transport work increases and the en-

ergy consumption in the form of oil based fuels increases at the same rate –

also in Denmark. The view to scarce and expensive oil resources in a foresee-

able future increases the wish to strengthen the Danish supply security by

diminishing the dependence on the oil.

The Danish energy system is constructed around the integration of the pro-

duction of electricity and heat, the application of the farming sector’s waste

products, and the optimising of the energy consumption. This scenario inte-

grates the production of electricity, heat, transport fuels, and surplus products

from the farming sector and can thus be seen as an extension of the integra-

tion project in the Danish energy system. Transport fuels here include etha-

nol, biodiesel, and synthetic transport fuels such as methanol and RME.


The main mechanism in this scenario is the production of biofuels for trans-

port purposes in co-production with existing heat/power units, while bio-

diesel is produced in separate biodiesel refineries. Ethanol and methanol are

co-produced with existing heat/power units, while biodiesel is produced in

separate biodiesel refineries.

Biomass such as grain and straw are applied in the ethanol production proc-

ess, while rape is used for diesel. The present fallow areas are likewise impli-

cated in the production of straw or rape. The surplus biomass resulting from

the ethanol production is vaporized and applying hydrogen from electrolysis,

methanol is produced. The electrolysis produces heat which can be applied in

the production of ethanol or in the district heating circuit.

Furthermore there is an expansion with wind power like in the reference sce-

nario and the fluctuating production can be combined with the need for elec-

tricity in electrolysis.

Ethanol, Methanol,

and Hydrogen

Ethanol is produced via

distillation of biomass.

Methanol is produced in

a chemical process on

the basis of vaporised

biomass and hydrogen.

An advantageous way

of producing ethanol

and methanol is via a

combination of electric-

ity and heat in

heat/power stations.

75

Biomass Scenario 2025

Fuel Prices

Oil

Gas

Coal

50 $/bbl

39 DKK/GJ

55$/t coal

CO2 quota price 150 DkK/t CO2


Oil

Coal

Gas

RE

710

153

99

129

329

CO2 emission

29 million ton CO2

Final energy consumption excl. transport (PJ)

413

Table B6.1. Overall preconditions and results of the biomass scenario.

The Energy Consumption

It is assumed that the end users’ final energy consumption will decrease from

435 PJ in 2003 to 413 PJ in 2025. The reduction presupposes a continuation of

the effort implemented in the Energy Saving Plan of 2005, which is in force up

until 2013.

The energy services will be kept at a constant level during this period. In the

households, as well as in the business and service areas, biomass will replace

10% points of the oil consumption in the heating sector. In the production

businesses biomass will replace 20% points of the oil consumed in process and

heating.

It is assumed that there are 250 GWh of flexible electricity use as a result of in-

telligent consumption. This is the equivalent of disconnecting approximately

500 MW of electricity consumption during the 500 hours when the electrical

circuit is under pressure.


The cumulative gross energy consumption in the integration scenario is 5%

higher than in the reference scenario (710 PJ compared to 673 PJ). In compari-

son the gross energy consumption was approximately 840 PJ in 2003. See fig-

ure B6.2.

The most significant cause for the increase is the energy spent producing al-

cohol, biodiesel, and methanol in the transport sector. 25% of the total gross

energy consumption is applied in the production of these transport fuels.

Renewable energy covers approximately 50% of the cumulative gross energy

consumption. A certain amount of coal (18%) is still applied. The is due to a

precondition stipulating that plants for the production of transport fuels are

established in combination with the present heat/power plants. In this way it

will be possible to utilise synergies between production of electricity, heat,

and transport fuels. The proportion of renewable energy in the electricity pro-

duction increases from 14% in 2003 to 53% in 2025. Wind power covers 23% of

the electricity production.


The Gross Energy

Consumption increases

40% Is Renewable energy

76

Figure B6.1. Distribution of gross energy consumption. The share of renewable energy in the

biomass scenario encompasses 33 PJ wind and 390 PJ biomass (including waste).

The gas constitutes approximately 20% of the cumulative gross energy con-

sumption and is applied in the production sector for individual heating,

heat/power, and separate heat production.

The oil consumption will be reduced by 50% compared to 2003. The reason is

primarily a reduction in the consumption of petrol and diesel in the transport

sector, but also a relaying from individual heating with oil to heating with

biomass.

Distribution of Fuels in Sectors

Figure B6.2. Gross energy consumption, sectors.


283 284 153

238 113

99

169

138

129

117

138 329

-

100

200

300

400

500

600

700

800

900

2003 Reference Biomass

RE

Gas Coal Oil

The Oil Consumption Is

Reduced by 50%

Cross Energy Consumption, Sectors

-

100

200

300

400

500

600

700

800

900

1,000

2003 Reference Biomasse

PJ

Heat

Transport District heating Electricity

77

The configuration of the gross energy consumption in the transport sector will

undergo radical change. Approximately 55 % of the gross energy consumption

will be covered by oil. Biodiesel covers 20%, while ethanol and methanol cover

approximately 30%. It is assumed that the bio fuels can replace the applica-

tion of petrol/diesel in the relation 1:1 (measured in terms of energy content).

Import and Export

If the present structure in the farming sector is maintained, and fallow areas

are applied in the production of biomass for biofuels, it will be necessary to

import gas and coal.

The decreasing national oil consumption provides Denmark with the possibil-

ity of exporting oil in 2025.

Figure B6.3. Import and export of energy (PJ) CO2 (Mt) in 2025 (Denmark’s production poten-

tial minus national fuel consumption). Import of CO2 emission means that Denmark must

reduce further in order to stay within the allotted quota or buy quotas abroad. Export means

that Denmark can sell quotas abroad.

The CO2 Emission

The CO2 emission will be reduced with 44 % compared to 1990. This is primar-

ily due to the increased share of renewable energy which replaces oil in the

transport sector.


Import of Gas and Biomass

Export of Oil


(150)

(100)

(50)

0

50

100

150

200

Oil Coal Gas Biomass Biogas Waste Electricity CO2 (mt)

Reference

Biomass PJ

Export

Import

Cutting the CO2 Emmission

in Half

78

Figure B6.4. CO2 emission

The Goals

In the biomass scenario the goal of reducing the oil consumption is all but at-

tained. The goal of reducing the CO2 emission with 50 % compared to 1990 is

within reach, but that would demand further application of mechanisms. One

way of attaining the CO2 standards could be to replace coal with biofuels or

gas. Furthermore there is also the possibility of replacing the oil and gas con-

sumption in the sectors of individual heating and process purposes with elec-

tricity and biomass.


The scenario increases the supply security with regard to fossil fuels and espe-

cially oil, but increases the dependency on the import of biomass.

The biomass scenario demands investments in new production facilities for

the production of biofuel. Biofuel could also be imported. It is, however, as-

sumed that the refinement of the biomass takes place in Denmark. The gen-

eral idea is that this should happen in a combination with the existing

electricity and heat producing units.

Furthermore the existing vehicle park should in part be replaced with cars

which run entirely or partly on methanol and ethanol. The present diesel cars

can run on biodiesel. There will also be a need for investments in the existing

tank plants for distribution of biofuels.

At the moment there is intensive research and development in the applica-

tion of enzymes in the production of ethanol. It will be necessary to continue

research and development.

CO2 Emission

0

10

20

30

40

50

60

1990 2003 Reference Biomass

Mill

ion

ton

CO

2

Supply Security

Investments

Research and Development

79

In a global view a number of developed countries already have implemented

or are in the process of implementing a policy concerning the promotion of

the application of biofuels. Denmark has knowledge about the production of

ethanol as well as methanol and for this reason there is a considerable export

potential for technology and products for the ethanol process. However,

Denmark does not have the biomass potential to export ethanol.

Mechanisms

Table B6.6 presents an example of some of the mechanisms which it would be

necessary to apply in order to implement the biomass scenario.

Global EU Denmark

▪ Technology development and norms for cars and bio fuels production

▪ Norms

▪ Goals

▪ Demonstration projects

▪ Changes in fees

Table B6.2. Examples of some of the mechanisms which it will be necessary to implement

the biomass scenario.

The Devil’s Advocate and Spin Doctor

Table B6.7. Pros and cons of the biomass scenario.

The devil’s advocat The spin doctor

- In global perspective it is irresponsible to use food as fuel

- The production of bio fuels is energy intensive and less efficient than other possibilities, for example the applica-tion of biomass in heat/power

- Is just an indirect subsidy of the farming industry

- Environmental consequences for the farming community and transport are not sufficiently analysed

- Ensures a diversified fuel supply and no dependence of oil in the transport sector

- In a Globalt perspective there are large amounts of biomass. Developing countries with large reserves of biomass could benefit from the development of efficient technologies in the production of biofuels

- Denmark has the necessary competences for the entire value chain

Table B6.3. The devil’s advocate and the spin doctor in the biomass scenario.

Export Potential

80

Appendix 7: Comparison of scenarios

B7.1 Final Energy Consumption

The final energy consumption and conversion loss for the individual scenarios

is shown in figure B7.1.

Reference

Figure B7.1. Final energy consumption distributed by scenario and utilisation. The total con-

version loss for each scenario is also shown. The loss results from the transport of energy, in

particular district heat, and from the conversion of fuels to electricity, heat or other fuels.

In all scenarios, the consumer receives the same number of energy services.

The savings scenario and the combination scenario stand apart from the oth-

ers as energy consumption in these scenarios is lower across the board. This is

also true of energy loss; measured in absolute numbers, lower energy con-

sumption results in smaller losses.

The biomass scenario is disparate due to the fact that the loss is significantly

larger than in the other scenarios. The reason for this is that the conversion of

biomass such as straw, corn and rape to biofuel is a relatively energy-

intensive process. This is also why the combination scenario shows a greater

loss than the savings scenario.

B7.2 Gross Energy Consumption

The level of gross energy consumption in the wind and gas scenarios is

roughly the same as in the reference scenario. However, it is reduced signifi-

cantly in the savings scenario and the combination scenario and increases in

the biomass scenario.

Same Number of Energy

Services

Husholdning

Final Energy Consumption and Conversion Loss

0

50

100

150

200

250

PJ/

year

Transport

Service

Production

Loss

Reference Savings Biomass Wind power Gas Combination

Household

81

Figure B7.2. Gross energy consumption for the individual scenarios

Only the biomass scenario and the combination scenario meet the goal to

halve the consumption of oil in 2025 compared to 2003. In the reference sce-

nario, consumption is reduced by less than 10%. However, the other scenarios

are quite close to achieving the target.

In all scenarios, oil consumption is primarily reduced in the transport sector

but there are also some reductions in household heat consumption and the

consumption of oil by industry for production processes and heat.

Figure B7.3 indicates the Danish Energy Authority’s prognosis for future Dan-

ish oil production distributed by contribution to reserve, technology (in-

creased level of extraction) and exploration (new finds). In 2025, oil

production is expected to be approx. 120 PJ if only the reserve contribution is

available, approx. 300 PJ including the technology contribution and approx.

570 PJ if the exploration contribution is included. By comparison, oil con-

sumption in the biomass scenario is almost 150 PJ and approx. 175 PJ in the

other technology scenarios. Oil consumption in the reference scenario

amounts to approx. 290 PJ.

Gross Fuel Consumption

-

100

200

300

400

500

600

700

800

PJ/

year

Waste

Biogas

Biomass

Wind power

Natural gas

Coal

Oil

Oil goal Reference Gas Biomass Wind Savings Combination

Oil Consumption

82

Figure B7.3. Prognosis for future Danish oil production: Distributed by reserve contribution,

technology contribution and exploration contribution (based on “The Danish Energy Author-

ity 2005: Analysis of oil and natural gas resources”, p. 42). One million m3 of oil corresponds

to 36.3 PJ of oil.

B7.3 Energy balance

All scenarios increase Denmark’s potential for exporting oil. At the same

time, the demand for imported coal is reduced in all scenarios, in particular in

the gas and wind power scenarios in which coal has been almost completely

phased out. There is a significant demand for the import of gas in all scenar-

ios, in particular, of course, in the gas scenario. In the biomass scenario, the

consumption of biomass is twice as large as domestic resources for energy

purposes (straw, waste wood, fallow areas and biogas) and, therefore, there is

a considerable demand for import.

PJ/year Reference Gas Biomass Wind Savings Combination

Coal -113 -6 -99 -6 -42 -23

Gas -98 -261 -88 -134 -88 -49

Oil 17 126 149 128 124 158

Biomass 56 20 -128 31 53 -6

Table B7.1. Energy balance (Denmark’s production potential less domestic fuel consump-

tion). A positive value indicates an export potential and a negative value that Denmark

must import. Expected domestic oil and gas production includes the technology contribution

(increased extraction) but does not include expectations for new finds (exploration contribu-

tion).



reserve contribution

Million m3

2025 2010 2015 2020 2005

0

0 10

20

30

- 570 PJ

-- 570 P

-- 300 PJ

2025

-- 120 PJ



reserve contribution

Million m3

2005 2010 2015 2020 2025

0

10

20

30

- 570 PJ

- 300 PJ

- 120 PJ

83

Figure B7.4. Trade balance for different types of fuel, electricity and CO2 quotas. Expected

domestic oil and gas production includes the technology contribution (increased extraction)

but does not include expectations for new finds (exploration contribution).

The trade balance for fuels in the different scenarios is shown in figure B7.4.

Overall, the wind, savings and combination scenarios have a positive trade

balance, whereas the reference, gas and biomass scenarios have a negative

trade balance.

CO2 emission

The wind, savings and the combination scenarios meet the goal to halve CO2

emission between 1990 and 2025. However, both the biomass scenario and

the gas scenario are close to achieving the target. CO2 emission in the combi-

nation scenario is lower than in the savings scenario due to the fact that, in

addition to savings, the combination scenario includes mechanisms from the

other scenarios, such as a considerable amount of renewable energy.

Figure B7.5. CO2 emission in the individual scenarios.

Coa

l

Gas

Trade Balance for Fuels and CO2 Quotas

-12.000

-10.000

-8.000

-6.000

-4.000

-2.000

0

2.000

4.000

6.000

8.000

10.000

mill

ion

DK

K

Reference

Gas

Biomass

Wind power

Savings

Combination

Oil

Bio

mas

s

Bio

gas

Was

te

Ele

ctric

ity

CO

2 qu

otas

Tot

al

CO2 Emissions

0

10

20

30

40

50

60

Ton

s of

CO

2 pe

r ye

ar in

mi

llion

s

Total CO2

Reduction target

1990 2003 Reference Gas Biomass Wind Savings Combination

84

B7.4 Financial viability and sensitivity analyses

The projected cost of technologies for the production of electricity and district

heat is based on the technology catalogue of the Danish Energy Authority and

the system provider. Projected investments in savings technology are based

on background material from the 2005 energy saving action plan as well as on

assessments by the specially formed savings group, see Appendix 1. The

household heating costs originate from the background report for the Energy

Strategy 2025.

Financial viability is calculated on the basis of the annualised value of the

whole energy system in 2025, i.e. what would be the annual cost of repay-

ments and financing in the case of reinvestment in the energy system in

2025? Thus, it is not an issue of macroeconomics but of an economic parame-

ter which enables a relative comparison of the technology scenarios. The cal-

culations are based on fixed 2006 prices and the selected rate of interest for

the calculation of financing costs is 6%, based on the Danish Energy Author-

ity’s recommendations for macroeconomic calculations. There is a more de-

tailed description of the calculations in Appendix 8.

In all of the technology scenarios fuel costs are reduced but investment costs

increased. Except in the case of the savings scenario, operating costs are also

increased, partly due to the fact that biomass, biogas and waste are more of a

challenge to handle than fossil fuels.

Figure B7.6 shows the annualised extra costs compared to the reference sce-

nario. The comparison presupposes an oil price of USD 50/barrel, a CO2 quota

price of DKK 150/ton and an interest rate of 6%.

85

Figure B7.6. Annualised costs of the gas, biomass, wind and savings scenarios compared to

the reference scenario. The model presupposes an oil price of USD 50/barrel, a CO2 quota

price of DKK 150/ton and an interest rate of 6%.

It is apparent that the total costs of the gas, biomass and wind power scenar-

ios are greater than those of the reference scenario. It must be emphasised

that forecasting the future cost of the energy system is associated with a great

degree of uncertainty. Some technologies may prove to be more expensive

than expected and fuel prices may differ significantly from the hypotheses

applied here. The financial viability of the gas scenario is closely linked to de-

velopments in gas prices, the biomass scenario to global biomass prices and

the wind power scenario to developments in the price of off-shore wind

power installations.

It is also difficult to assess the financial viability of the savings scenario as, to

a large degree, it depends on the ability of appliance manufacturers to make

energy-efficient appliances the standard: The greater the focus on individual

supply and savings technologies (both at a national and at an international

level), the greater the potential for improving the price/service ratio.

In overall terms, the costs of the combination scenario are lower than those of

the other scenarios. The larger investment costs are offset by lower annual

fuel costs.

All of the technology scenarios are expected to provide Danish trade and in-

dustry with a positive spin-off. Due to the inherent diversity of the various

scenarios, their potential will be focused towards different areas of Danish in-

dustry. In any case, in connection with trade and export, the creation and ex-

Annualised Extra Costs

-20,000

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

Fuel Operations Investments Total

DK

K m

illio

n pe

r ye

ar

Gas

Biomass Wind

Savings

Combination

Gas, Biomass and Wind

Savings

The Comnination Scenario

The Development of

Danish Industry

86

ploitation of Danish positions of strength on the international market will

benefit the Danish economy, the employment situation and the trade balance.

Vulnerabilities

In order to be able to asses the vulnerability of the various different scenarios

to unreliable forecasts of future fuel and technology prices, a number of sensi-

tivity analyses were conducted on the basis of the central parameters in each

scenario, i.e. on the basis of the assumptions which have the greatest influ-

ence on the results.

The impact on each scenario of a rise in the price of oil from USD 50 per barrel

to USD 100 per barrel is shown. As oil consumption in all scenarios is lower

than in the reference scenario, the result will be a relative improvement in the

finances of all scenarios. Furthermore, the consequence of a rise in the CO2

quota price from DKK 150/ton to DKK 300/ton is documented.

It is assumed that price of other energies will be linked to the price of oil

(measured in USD per barrel) in a specific ratio, although there is no profound

scientific research to support this fact:

Price of gas = 0.78*Oil price Unit: DKK/GJ

Price of coal = 30+0.5*Oil price Unit: USD/ton

Price of straw =21+0.2*Oil price Unit: DKK/GJ

Finally, a number of sensitivity analyses will be carried out for each specific

scenario:

In the gas scenario, the hypothesis related to the price of gas has the greatest

influence and the scenario is tested on a gas price which fluctuates between

minus 25% and plus 75% in relation to the gas price applied, which is DKK

39/GJ if the price of oil is assumed to be USD 50 per barrel and DKK 78/GJ if

the price of oil is USD 100/barrel.

In the case of the biomass scenario, the most significant factors are the price

of biomass and the cost of investment in a facility for the conversion of bio-

mass into transport fuel. The scenario is tested on a biomass price which fluc-

tuates between minus 25% and plus 75% in relation to the biomass price

applied, which is DKK 31/GJ if the price of oil is assumed to be USD 50 per bar-

rel and DKK 41/GJ if the price of oil is USD 100/barrel. In addition, the cost of

investment in biomass technologies fluctuates between minus 25% and plus

50% in the model.

In the case of the wind power scenario, the cost per MW of investment in new

wind turbines is the most significant factor. The scenario is tested on invest-

ment costs which fluctuate between minus 25% and plus 50% in relation to

the investment costs applied.

The savings scenario differs from the other scenarios as it focuses on the as-

sumption that there will be investment in a large number of technologies. It

Rising of Oil Prices

The Gas Scenario

The Biomass Scenario

The Wind Power Scenario

The Savings Scenario

87

can also be argued that, if a dedicated effort is made within the community to

save energy, many of the potential savings could be harvested without any

extra costs, simply because energy-efficient appliances are the standard.

Therefore, in the sensitivity analyses, the cost applied for savings investments

ranges between no extra cost and an extra 100% in excess of the applied cost.

In the combination scenario, investments in savings and wind turbines repre-

sent the most significant uncertainties. Therefore, at one extreme the price of

a wind turbine is calculated to be 25% less than the estimated average and

savings are calculated to be cost-free. At the other extreme, 50% is added to

the estimated average price of wind turbines and 100% is added to the in-

vestment in energy savings.

In figures B7.7 and B7.8, the scenarios’ extra costs are compared to the refer-

ences for the various uncertainties. Figure B7.7 illustrates the uncertainties if

the price of oil is fixed at USD 50/barrel. Figure B7.8 illustrates the uncertain-

ties if the price of oil is fixed at USD 100/barrel.

Figure B7.7. Sensitivity analysis of the financial viability of the scenarios based on an oil

price of USD 50/barrel and two CO2 quota prices. Index I corresponds to a quota price of DKK

150/ton CO2 and index II to a quota price of DKK 300/ton CO2. The transverse line on each

vertical represents the best estimate and is the value applied to the scenarios.

The Combination Scenario

-20000

-15000

-10000

-5000

0

5000

10000

15000

DK

K m

illio

n pe

r ye

ar

Gas

I

Gas

II

Bio

mas

s I

Bio

mas

s II

Win

d po

wer

I

Win

d po

wer

II

Sav

ings

I

Sav

ings

II

Com

bina

tion

I

Com

bina

tion

II

Annualised extra costs for the scenarios in relation to the reference scenario

with the price of oil at USD 50/barrel and a CO2 quota price of DKK 150/ton

and DKK 300/ton respectively

88

Figure B7.8. Sensitivity analysis of the financial viability of the scenarios based on an oil

price of USD 100/barrel and two CO2 quota prices. Index I corresponds to a quota price of

DKK 150/ton CO2 and index II to a quota price of DKK 300/ton CO2. The transverse line on

each vertical represents the best estimate and is the value applied to the scenarios.

B7.5 Challenges and mechanisms

It is the general view that it will be difficult for the mechanisms in the tech-

nology scenarios alone to ensure that the goal to halve both oil consumption

and CO2 emission is met. This is related to the way in which the project ap-

plies the scenarios. The scenarios are meant to provide an interpretation and

a summary of the objectives, causes and effects. In addition, the scenarios are

an important tool for communication and dialogue. The most likely devel-

opment is a future energy system based on a combination of elements from

all scenarios but also influenced by technological developments, the choices

made by the players and political decisions.

If the scenarios, or a combination of elements from the various scenarios, are

to be implemented, action will be required by Denmark and the EU as well as

at a global level. It will entail a conscious choice of framework conditions and

mechanisms which will help to push development in the desired direction.

-25000

-20000

-15000

-10000

-5000

0

5000

10000

15000

DK

K m

illio

n pe

r ye

ar

Gas

I

Gas

II

Bio

mas

s I

Bio

mas

s II

Win

d po

wer

I

Win

d po

wer

II

Sav

ings

I

Sav

ings

II

Com

bina

tion

II

Com

bina

tion

I

Annualised extra costs for the scenarios in relation to the reference scenario

with the price of oil at USD 100/barrel and a CO2 quota price of DKK 150/ton

and DKK 300/ton respectively

89

Table B7.2 presents a summary of challenges and examples of mechanisms for

the four scenarios: Savings, gas, wind power and biomass.

Examples of challenges

Examples of mechanisms

The savings scenario

▪ Spreading the use of low-energy technology

▪ Involving many players

▪ Norms

▪ Marking schemes

▪ Technological develop ment – appliances and equipment

The gas scenario

▪ Reliability of supply - gas

▪ Establishment of an infrastructure for the import and distribution of gas

▪ Ensure more sources of supply ▪ Gas in transport sector

The wind power scenario

▪ The infrastructure must be able to handle large quantities of wind power

▪ Fluctuating electricity production

▪ Technology development and demonstration (offshore wind turbines)

▪ Flexible electricity consumption

▪ Electricity in the transport sector

▪ Development of the electricity infrastructure

The biomass scenario

▪ Technologies based on straw are not yet fully developed

▪ Biofuels are still more expensive than petrol at USD 50 per barrel

▪ Demonstration projects

▪ Norms

▪ Taxation changes

The combinatio

n scenario consists of a

combinatio

n of

challenges and m

echanisms

Table B7.2. Challenges and examples of mechanisms for the four scenarios: Savings, gas,

wind power and biomass. The mechanisms are described in more detail in the following

chapters on the individual scenarios.

Large savings require, among other things, more widespread use of low-

energy appliances and equipment. International norms and standards are

mechanisms which can be applied but Danish efforts are also necessary. Con-

tinued technological development of both appliances and equipment is also a

requirement.

The wind power scenario presupposes the supply of approx. 9200 MW of wind

power in 2025, 2400 MW of this from on-shore wind turbines and 6800 MW

from off-shore wind turbines. Quantities of this magnitude will require an

electricity transmission network that is prepared to handle transport from the

wind turbine installations. However, the problem of fluctuating production

from wind turbines must also be solved, e.g. by means of intelligent appli-

Savings

Large Quantities of

Wind Power

90

ances, flexible electricity production, use of electricity in the transport sector

and the exchange of electricity with neighbouring countries.

In the gas scenario, almost half of the total energy consumption is based on

natural gas. If no more gas is discovered in the Danish part of the North Sea, it

will be necessary to import natural gas in large quantities. Thus, there will be

a need for decisions on an infrastructure for the import of gas. There are large

gas resources in Russia and the transport of gas in the form of LNG (fluid gas)

by ship is gradually becoming a competitive alternative to pipelines.

The biomass scenario foresees that almost 40% of the total gross energy con-

sumption will be supplied by biomass in 2025. It will be necessary to import

approx. 65% of the total quantity of biomass, amounting to 340 PJ. If a large

proportion of energy consumption is to be based on biomass, decisions will

have to be made; either on the agricultural conditions required to increase the

production of biomass or on the import of biomass. The import of biomass

could prove to be a problem; partly due to the reliability of the supply and

partly due to the environmental consequences for the countries from which

biomass is imported. Furthermore, demonstration projects will have to be

implemented to test technologies based on waste products from the agricul-

tural sector.

Gas

Biomass

91

Appendix 8: Provisions and results

PJ Reference Saving Biomass Wind power Gas Combi

Energy consumption 673

475 710 594 657 493

Transport 195 151 196 155 187 144

Household 162 101 162 171 162 131

Service 80 53 80 0 80 0

Production 171 131 171 75 171 51

Loss 65 39 101 193 57 169

Gross fuel

consumption 673 475 710 594 657 493

Oil 284 178 153 176 175 143

Coal 113 42 99 6 6 21

Natural gas 138 128 129 177 302 100

Renewable energy 138 127 329 236 175 230

Electricity 203 126 250 232 203 146

District heating 74 69 56 72 74 62

Conversion Electricity

production 126 85 152 175 127 97

Oil 6 1 2 2 1 0

Coal 46 17 43 0 0 0

Natural gas 25 21 30 44 65 97

Wind power 31 32 38 105 32 49

Other renewable energy 16 14 40 24 29 31

District heating 118 93 129 116 134 104

Oil 6 1 1 1 1 1

Coal 41 16 37 0 0 6

Natural gas 33 40 23 52 63 19

Other renewable energy 37 37 52 47 50 60

Heat pumps 0 0 15 16 20 15

Household

consupmtion 410 285 413 384 413 304

Electricity 115 60 115 139 109 76

Heating 96 77 97 97 110 82

Oil 85 49 39 39 64 26

Coal 10 4 6 6 6 5

Natural gas 75 64 70 71 91 68

Renewable energy 30 30 87 34 34 48

Transport 195 152 219 169 188 138

Oil 184 126 110 133 108 115

Electricity 2 19 26 19 3 11

Natural gas 0 0 0 0 68 2

Biodiesel 9 7 37 8 9 10

Ethanol 0 0 29 4 0 0

Methanol 0 0 18 0 0 0

Hydrogen 0 0 0 4 0 0

Other key figures

MW vind on shore 2079 2399 2799 4000 2399 2639

MW vind off shore 890 756 1869 5600 712 1821

Condensation production %

13 4 16 24 21 13

Enforced exsport 0.44 0 1.8 2.05 0.42

CM value 0.90 0.91 0.86 0.88 0.90 0.73

Million ton CO2 CO2 emission 40.10 24.95 28.55 24 31.02 19

92

Appendix 9: Macroeconomics

Operating costs and investments

Financial viability is calculated as the cost of annual investment subject to in-

vestment in existing assets in the energy system in 2025. Expansion and

changes in relation to today are the only parameters included in the infra-

structure costs. Reinvestment in existing electricity, gas and heating infra-

structure is not included.

Each GJ of energy used is converted to and divided into fuel, operating and in-

vestment costs. Operating and investment costs reflect the annual load factor

for the production plant used. Investment assumptions are taken from the

Danish Energy Authority’s technology catalogue and note on the use of bio-

diesel as an initiative for the reduction of C02 emission. Assumptions on the

production of methanol and ethanol are taken from input from Elsam.

Thus, these are not macroeconomic calculations recommended by the Minis-

try of Finance. In order to meet the requirements of the Ministry of Finance it

would be necessary to prepare a case for investment in the replacement of

plants between 2003 and 2025.

Therefore, the absolute investment costs cannot be compared to the conclu-

sions of other analyses and can only be used to assess the relative differences

between the investment plans for each scenario.

Fuels

As a baseline, fuel is imported to and converted in Denmark. In the case of

ethanol, methanol and biodiesel, it is assumed that raw materials, in the form

of biomass, are imported and converted in Denmark. As an alternative, con-

verted fuel could be imported.

Fuel potential is based on the forecasts of the Danish Energy Authority in the

Energy Strategy 2025. According to the forecast for oil and gas, extraction

from existing fields will increase. In the case of biomass, the Energy Strategy

2025’s forecast for straw, corn, rape and potential use of fallow areas is ap-

plied.

C02 is also considered a production input and, if emissions exceed the na-

tional quota, costs for the purchase of quotas are added. Similarly, emissions

which fall short of the national Danish quota will result in an income.

93

Appendix 10: The analysis models

1. The duration curve model

The purpose of the duration curve model is to analyse correlations in the Dan-

ish electricity and combined heat and power systems on an hourly basis.

Based on the analyses of the duration curve model, input is provided to the

overall energy flow and financial calculations included in the energy flow

model.

The duration curve model does not include financial optimisation. It is a rela-

tively simple spreadsheet model. The model cannot be compared with ad-

vanced optimisation models such as SIVAEL, Balmorel, the integration model

etc.

Input to the energy flow model from the duration curve model includes:

- The annual load factor for electricity and heat production plants

(including heat pumps). The annual load factor for the various dif-

ferent plants (number of full load hours in one year) is an impor-

tant input parameter for the financial calculations.

- Proportion of condensation-based electricity production. During

periods in which electricity consumption is relatively large and

heat consumption relatively small, a large number of combined

heat and power plants are required to run condensation-based pro-

duction (only for electricity). The proportion of condensation-based

electricity production is an important input parameter to the en-

ergy flow calculations.

- The size of potential electricity overflow. When wind power pro-

duction exceeds electricity consumption, electricity overflow occurs

in the system. The electricity overflow can often be exported to the

countries with which Denmark has electricity agreements (Ger-

many – 1800 MW, Norway – 1000 MW and Sweden – 2640 MW). If

the electricity overflow cannot be exported it is considered critical.

The duration curve model can assess the size of the total electricity

overflow and assess whether theoretical export potential will be

exceeded. In practice, export potential may be restricted if the

neighbouring countries also experience electricity overflow caused

by a large increase in wind power installations in the future. How-

ever, this model cannot make an assessment of this.

The duration curve model is based on historic time series (hourly values) for

electricity and heat consumption. In each scenario that is analysed, the his-

toric time series are scaled to actual consumption. The supply scenario is

modelled as a large combined heat and power plant, a large heat storage

plant, a large heat pump and a large boiler as well as four types of wind tur-

bine (2 off-shore and 2 on-shore wind turbines, one of each in East Denmark

94

and one of each in West Denmark). Denmark is analysed as an interconnected

system without domestic transmission restrictions in either district heat or

electricity.

Both production from wind turbines and consumption data are fixed on the

basis of historic time series and are scaled to the wind power production level

selected in the scenario. It is assumed that wind turbine installations will,

almost exclusively, be developed off shore.

1.1 . Coverage of electricity consumption

The model makes a simplified assumption that production from Danish

thermal power plants only covers Danish electricity consumption and that

foreign plants do not help to cover Danish requirements. The need for ther-

mal electricity production in Denmark is calculated, on an hourly basis, as

electricity consumption minus wind power production. The hourly values can

be consolidated in a duration curve which illustrates the required low de-

mand, high demand and peak demand capacity (see figure 1 below). The dura-

tion curve also illustrates the electricity overflow in the scenario.

Figure 1. Example of a duration curve for electricity consumption minus wind power. The

area above 0 MW on the curve must be covered by thermal production plants. The area be-

low 0 MW represents the electricity overflow.

If a large proportion of the electricity system is wind powered, the need for

low demand capacity will be reduced. This will increase the relative cost of

thermal electricity production. However, the effect of this can be reduced by

Elforbrugsvarighedskurve - fordelt på segmenter af 500 MW(Husk: varighedskurven skal opdateres vha. makro)

-4000

-2000

0

2000

4000

6000

8000

1 501 1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 6001 6501 7001 7501 8001 8501

MW

Eloverløb

Electricity Consumption Duration Curve in Segments of 500 MW (Mind: The duration curve must be opdated by means of macro)

Electricity overflow

95

implementing various initiatives to increase electricity consumption, e.g. by

installing heat pumps in district heating plants and households and by using

electric-powered vehicles (see below).

Data included in the duration curve is used as input to the financial calcula-

tions in the energy flow model, i.e. to determine the number of full load hours

for the various technologies/fuels. In connection with this, optimisation of

the energy flow model is carried out. Technologies using coal and biomass

usually have high investment costs but low operating costs. Therefore, these

technologies are assumed to represent low demand – approx. 5000 – 7500 op-

erating hours – whereas gas technologies, which generally have low invest-

ment costs, are assumed to supply high demand/peak demand (100 – 5000

hours).

Figure 2. Full load hours for thermal production capacity in blocks of 500 MW (the first block

accounts for 7377 full load hours, the next block for 6947 etc.).

1.2. Coverage of district heat consumption

The consumption of district heat is computed on an hourly basis based on a

heat consumption profile from East Denmark and is scaled up on the basis of

the total Danish district heat consumption as projected in the scenario (data

from the energy saving model).

Heat production technologies are prioritised by the model as follows:

1. Combined heat and power

2. Heat pumps

3. Heat storage

4. Boilers

The first step is to meet consumption needs using excess heat from the ther-

mal power plants which are all assumed to be able to supply combined heat

and power. Combined heat and power potential is dependent on a demand

for electricity produced by thermal plants (cf. above paragraph), e.g. during

the hours in which wind power production is greater than electricity con-

sumption there is no combined heat and power potential. The second step is

to use heat pumps to meet consumption needs if this mechanism is applied in

the scenario. Thirdly, heat storage is used (unless the storage facility is

empty) or, as a last resort, boilers.

Interval (MW) From 0 500

1.000 1.500

2.000 2.500

3.000 3.500

4.000 4.500

5.000 5.500

To 500 1.000

1.500 2.000

2.500 3.000

3.500 4.000

4.500 5.000

5.500 6.000

3.688.320 3.473.534

3.177.494 2.793.903

2.401.068 1.975.346

1.490.180 988.988

519.393 156.879

25.300 646

Full load hours

7.377 6.947

6.355 5.588

4.802 3.951

2.980 1.978

1.039 314

51 1

96

If the heat production available from combined heat and power and heat

pumps exceeds heat requirements, the excess will be added to the heat stor-

age capacity. Heat storage is initially assumed to have a capacity of 10,000

MWh in total. However, this can vary. There are no restrictions on heat stor-

age output, i.e. the model can fill up the storage facility and empty it within

the hour as required.

In the model, the capacity of the heat pumps is specified in MW of heat and

the result is a figure for production, specified in PJ. It is important to ensure

that heat production from the heat pumps corresponds to the production level

stipulated in the energy flow model.

If heat pumps are used for the production of district heat, electricity consump-

tion will be increased, creating greater potential for combined heat and power

(subject to the electricity consumption of the heat pumps being covered by

the electricity overflow from wind turbines or increased thermal production).

The model takes this into account.

Figure 3 shows an example of the extent to which the various different heat

production technologies are applied. In the example below, the number of

full load hours for the heat pumps is approx. 4500 and almost 1000 hours for

boilers.

Figure 3. Example of the use of heat production technologies to meet the requirement for dis-

trict heat.

1.3. Electricity for the transport sector (trains, electric-powered vehicles,

electrolysis to hydrogen)

Increased electricity consumption in the transport sector can help to create a

balance in the electricity system as, e.g. electric-powered vehicles, can be

-6000

-4000

-2000

0

2000

4000

6000

8000

1 501 1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 6001 6501 7001 7501 8001 8501

MW

Heat consumption Heat pump Boiler Storage Combined heat and power

97

charged when it is best for the electricity system. Therefore, the model speci-

fies total electricity consumption by the transport sector (input from the en-

ergy saving model) separately. The duration curve model subsequently

indicates the way in which consumption is distributed over three areas:

1. Inflexible, i.e. evenly over the hours in the year.

2. Very flexible, i.e. in the hours that are best for the electricity system

3. During the night (between 11.00 p.m. and 6.00 a.m.), which is also

good for the electricity system as electricity consumption is usually

relatively low at night.

In the example in figure 4, it is assumed that 50% is used at night, 25% when it

is best for the electricity system (e.g. affected by pricing signals) and 25%

evenly over the hours in the year. In the example, “very flexible” consump-

tion is defined as the hours during which electricity consumption minus wind

power production is lower than 500 MW, in this case 2926 hours. The cut-off,

which is set to 500 MW in the example, is set manually.

Figure 4. Extract from the duration curve model. Example of input to “Electricity for trans-

port”.

When hydrogen is produced from the electrolysis process a certain amount of

energy is released which can be used for district heat. The model can take this

into account (district heat from electrolysis is indicated in the spreadsheet as

“Electrolysis, VP etc”). In this case, district heat from hydrogen production is

considered the first priority, i.e. before combined heat and power.

1.4. Flexible electricity consumption

The model can also estimate “traditional”, flexible electricity consumption, i.e.

consumers who cut consumption (e.g. due to a pricing signal) when the elec-

tricity system is under pressure.

Increased electricity consumption (transport, elec-trolysis…) MWh

Increased electricity consumption (transport, electrolysis…) PJ

6.408.889 23,07

Proportion of inflexible co n-sumption (distributed evenly over the hours in the year) (residual)

Proportion of very flexible consumption (i.e. when it is best for the system)

25% 25% 50%

Increase per hour (MW) Increase per hour (MW) Increase per hour (MW) CHECK CUT-OFF!

183 548 1100 Hours Hours Hours

8.736 2.926 2.912

Inflexible (MWh) Very flexible (MWh) Consumption at night (MWh)

indicate cut -off (MW) for very flexible consumption

1.602.222 1.602.222 3.204.445 500

Proportion of consumption at night (between 11.00 p.m. and 6.00 a.m.)

98

The model defines the total amount of reduced electricity consumption in

MWh (negative value) as well as a cut-off point which indicates when it is

necessary to reduce consumption. In the example in figure 4, 4500 MW has

been selected as the cut-off, i.e. consumption is cut when electricity consump-

tion minus wind power is greater than 4500 MW. In the example, electricity

consumption is reduced by an average of 639 MW for 391 hours. The reduced

electricity consumption is (evenly) distributed over the residual hours in the

year. Thus, there is no cumulative reduction in electricity consumption.

Flexible electricity consumption helps to improve the annual load factor at

plants and reduces the need for investment in peak demand plants.

Figure 5. Extract from the duration curve model. Example of input to “Flexible electricity con-

sumption”.

1.5. Electricity consumption for individual heat pumps

Electricity consumption is estimated separately for individual heat pumps in

households, trade and service (in addition to the collective heat pumps used

for the production of district heat). The electricity consumption of these heat

pumps is assumed to follow a consumption profile which corresponds to the

consumption profile for district heat. These heat pumps do not adhere to the

general electricity consumption profile due to the fact that it is assumed that

the heat pumps are used for heating purposes and, thus, the district heat pro-

file provides a better description (forecasts for individual heat pumps are

specified in the “Electrolysis, VP etc.” spreadsheet). It is not assumed that any

storage facilities are linked to the individual heat pumps.

Technical system specifications

No provisions have been made for the operation of thermal production plants

in Denmark due to electro-technical conditions (MVar balance, voltage etc.). It

Reduced electricity consumption (in peak demand hours) (MWh)

Note that general electricity consumption is increased correspondingly so that there is no overall reductionin electricity consumption!

(250.000)

Reduction per hour

-639 Hours

391

Cut-off (MW) Reduced electricity consumption Flexible (MWh)

4.500 (0)

99

is assumed that these can be supplied by other components in the electricity

system.

2. The savings model

The structure of the scenarios in the energy saving model

The demand for energy services in the 2025 scenario is projected in the energy

saving model. The baseline for the model is continued economic growth as

projected, for example, in the government’s Energy Strategy and in the energy

saving action plan. It is assumed that the demand for energy services will

grow by a factor equivalent to economic growth multiplied by energy inten-

sity which takes into account the fact that far from all economic growth is

converted to an increased demand for energy services (e.g. due to structural

changes in the sectors).

The demand for energy services and, subsequently, final energy consumption

is calculated for Denmark and divided into four sectors: Industry and Service,

Production, Households and Transport. Initially, the following assumptions

about economic growth and energy intensity are applied:

Sector Economic growth in % pa Energy intensity

Trade and service

1,6 0,75

Production

1,5 1,00

Households – electricity

1,9 0,90

– heat

1,9 0,26

Transport

1,0 1,00

Transport differs from the other sectors in that growth is specified as the an-

nual growth in transport work and not as the economic growth in the trans-

port industry and households.

Energy intensity is multiplied by the annual percentage of growth so that the

annual growth in the demand for energy services in industry and service is,

e.g. 1.6*0.75 = 1.2 % pa.

Below is a “screen dump” of the model’s input spreadsheet into which per-

centage of growth, energy intensity and final year have been inserted. The

model subsequently projects final energy consumption for each of the four

sectors and each of the six types of energy consumption (electricity, district

heat, coal, oil, natural gas and renewable energy – which is primarily biomass

here). Furthermore, it is possible to switch between the various different

types of energy consumption in the individual sectors and heat pumps can be

introduced.

100

Figure 1. Main input and results spreadsheet from the energy saving model.

Similar to the background report for the government’s energy saving action

plan of 2006, the forecast for energy demand in the areas of Industry and Ser-

vice, Production and Households is distributed over a number of end users.

The transport sector is dealt with separately in a small transport model.

Calculation of energy demand in the model

The demand for energy in the energy saving action plan’s forecast year is

computed by calculating the new energy consumption (e.g. electricity con-

sumption by household lighting) at a constant level of efficiency, i.e. how will

consumption develop given economic growth and energy intensity if the effi-

ciency of electrical appliances does not improve? This type of consumption

figure (with fixed efficiency) can be said to provide an image of the growth in

the energy services within a given end use. This figure is subsequently regu-

lated on the basis of assumed efficiency development and the result is the en-

ergy demand calculated in the model for the given scenario. It can be

expressed by a mathematical formula as follows:

Electricity,light2025 = (1 - savings%) * Electricity,light 2003 * (1 + growth% *

energy intensity) (2025-2003)

The potential of the government’s energy saving action plan - industry

The table below is taken from the academic background report “Action plan

for renewed energy savings and market measures”, the Danish Energy Au-

thority, December 2004. Potential savings are computed for a number of end

users who jointly represent commercial potential. The transport sector is not

101

included. Savings that can be achieved using existing technology, and that

can be gained before 2015, represent the macroeconomic potential. This basi-

cally corresponds to the calculations in the action plan. The maximum poten-

tial contains an extra effort which will require, among other things, research

and development if it is to be realised.

Table 1

Savings costs are estimated in “The assessment of potential energy savings in

households, industry and the public sector”, a report prepared by Birch &

Krogboe A/S for the Danish Energy Authority, 2004. A number of steps leading

to the specified savings potential have been calculated for each end use. Sav-

ings in percentage, lifetime and repayment period are computed for each step.

The same report also contains a description of the potential savings for each

end use.

The figure below shows an extract from the model in which the potential sav-

ings for the individual industries are distributed by lifetime and by simple

microeconomic repayment period (the table is taken from the above-

mentioned report). Costs are calculated according to 2003 prices. The energy

prices for industry in 2003 are also included in the spreadsheet so that the ac-

tual investment costs for each individual savings initiative can be derived.

All industry (- transport)

Current consumption 2003 Macroeconomic savings Maximum potential

2003 figures Fuel Electricity District heat

Fuel Electricity District heat


End use TJ TJ TJ % TJ TJ TJ % TJ TJ TJ

Boiler and net loss 10187 0 0 40% 4075 0 0 60% 6112 0 0

Heating / ebullition 21356 2115 1252 25% 5339 529 313 30% 6407 635 376

Drying 13962 706 702 25% 3491 177 176 40% 5585 282 281

Evaporation 4074 0 316 40% 1630 0 126 55% 2241 0 174

Distillation 3241 0 0 30% 972 0 0 45% 1458 0 0

Combustion / sintering 13354 23 0 20% 2671 5 0 30% 4006 7 0

Liquefaction / casting 2243 3175 0 20% 449 635 0 30% 673 953 0

Other heat over 150° 7286 929 2036 20% 1457 186 407 50% 3643 465 1018

Work transport 23025 0 15% 3454 0 0 30% 6908 0 0

Total production process 98728 6948 4306 23537 1531 1022 37033 2341 1848

Lighting 0 15435 0 20% 3087 60% 9261

Pumping 0 5296 0 35% 1854 60% 3178

Fridge / freezer 0 7716 0 40% 3086 55% 4244

Ventilation and fans 0 10692 0 40% 4277 75% 8019

Compressed and process air 0 4579 0 35% 1603 75% 3434

Other electric motors 0 11873 0 15% 1781 35% 4156

Computers and electronics 0 2862 0 25% 716 50% 1431

Other electricity usage 0 417 0 10%

42

20%

83

Secondary energy 0 58870 0 0 16445 0 0 33806 0

Heating of premises 16627 2417 25462 25% 4157 604 6366 40% 6651 967 10185

Total 115355 68235 29768 27693 18580 7388 43683 37113 12033

Grand total 213358 2%5 53660 44% 92830

102

Investments that have been included with a repayment period of 0 years are

initiatives which do not require extra investment if more energy-efficient so-

lutions are selected.

Figure 2

The first part of the table in figure 2 includes the potential savings included in

the energy saving action plan. The second half represents the additional sav-

ings potential included in “max. potential”.

The potential of the government’s energy saving action plan - households

The background material for the energy saving action plan also includes a

computation of potential savings for a number of household end users:

103

Table 2

Households Current consumption 2003 Macroeconomic savings 2025 Maximun potential 2025

2003 figures Fuel Electricity District heat



End use TJ TJ TJ % TJ TJ TJ % TJ TJ TJ

Lighting 0 5756 0 35% 0 2015 0 75% 0 4317 0

Pumping 0 2074 0 35% 0 726 0 75% 0 1556 0

Fridge / freezer 0 7110 0 15% 0 1067 0 30% 0 2133 0 Computers and electronics

0 1015 0 40% 0 406 0 80% 0 812 0

Other electricity usage 0 3005 0 25% 0 751 0 50% 0 1503 0

Cooking 1143 3386 0 30% 343 1016 0 65% 743 2201 0

Washing machines 0 5079 0 35% 0 1778 0 70% 0 3555 0 TV / video 0 3047 0 30% 0 914 0 65% 0 1981 0

Heating of premises 80987 6839 67917 25% 20247 1710 16979 40% 32395 2736 27167

Total 82130 37311 67917 20590 10382 16979 33138 20792 27167

Grand total 187358 26% 47950 43% 81097

The macroeconomic potential specified here represents existing technology

which would be immediately viable if introduced and which is included in

the action plan.

The individual potential is also discussed in the report by Birch & Krogboe

A/S: “The assessment of potential energy savings in households, industry and

the public sector”, the Danish Energy Authority, 2004.

Unfortunately, the background material for the energy saving action plan

does not include a computation of investments associated with household

savings. Therefore, the costs calculated for similar end users in the trade and

service industries are provisionally applied in the model’s calculations.

As it is the year 2025 that is under consideration, it is assumed in the calcula-

tion of potential savings and associated costs that the specified savings per-

centages can be applied to consumption in 2025. This includes associated

costs per TJ calculated on the basis of the background material for the energy

saving action plan.

Costs of energy savings

Obviously, it is difficult to price savings, i.e. the additional costs associated

with the introduction of a technology with lower energy consumption than

the “natural” choice. Firstly, it is difficult to predict the natural choice of tech-

nology in 20 years and, secondly, there will be a connection between the

technologies that are purchased and the future price for these.

The development in energy efficiency in buildings, vehicles and other energy-

consuming appliances can, to a large extent, be politically influenced. If in-

ternational standards or national legislation related to, e.g., the permissible

level of energy consumption for electrical appliances is introduced, products

that are not energy efficient will disappear from the market. Is it possible,

then, to say that there are additional costs associated with the purchase of en-

ergy-efficient appliances? Above all, production costs often depend on the

number of products produced. Therefore, it is not certain that a policy pro-

104

moting production of energy-efficient appliances will result in more expen-

sive appliances.

To a certain extent, we attempt to include these aspects in the economic as-

sessment of the energy demand scenarios by applying two price levels for the

energy savings introduced. At the one extreme, investment costs from the

background material for the energy saving action plan are applied (repre-

sented in figure 1 as lifetime and repayment period) and, at the other ex-

treme, it is assumed that investment costs will be halved, cf. above-

mentioned arguments.

All costs in the model are subsequently calculated as annualised costs in rela-

tion to annual savings in TJ in the reference scenario, i.e. investment in the

individual energy savings are amortised over the lifetime of the savings in

equal annual instalments and at a fixed interest rate (the starting point being

6% p.a.).

The energy saving model only deals with additional costs incurred by the im-

plementation of energy savings that do not extend to boilers etc. The cost of

investment in, operating and maintaining individual boilers and industrial

plants are dealt with in the energy flow model.

Distribution of energy services

Distribution of growth in electricity services by end user: Up to 2025, IT and

appliances that are not yet in widespread use (the “others” group) will, pre-

sumably, represent the largest proportion of growth in electricity services.

However, even if the distribution applied to growth is the same, the distribu-

tion of consumption in 2025 will differ due to the displacement caused by the

fact that potential savings are exploited in different ways.

The distribution of growth in electricity services is set such that household

electricity consumption in the reference scenario for 2025 is consistent with

the distribution forecast in “ELMODEL – household” in the report “Prognosis

for household electricity consumption 2002 – 2030”, IT-ENERGY. A slightly ad-

justed distribution is subsequently applied to the proportion of electricity

consumption by industry and service and by production unrelated to produc-

tion process energy or heat. The tables below indicate the way in which dis-

placement in growth in electricity services affects the distribution of

electricity consumption by applications other than the production process

and the heating of premises in the two scenarios for 2025.

105

Households: Distribution of electricity consumption in 2025 by applica-

tions other than heating:

End use

Distribution in 2003

Proportion of growth distributed

by end use


Reference


Savings

Lighting 19 % 20 % 18 % 10 %

Pumping 7 % 5 % 6 % 4 %

Fridge / freezer 23 % 3 % 21 % 37 %

Compputers and

electronics

3 % 29 % 10 % 4 %

Other applications 10 % 5 % 9 % 11 %

Cooking 11 % 8 % 10 % 10 %

Washing machines 17 % 15 % 15 % 11 %

TV/video 10 % 15 % 12 % 12 %

Total 100 % 100 % 100 % 100 %

Industry and service: Distribution of electricity consumption in 2025 by

applications other than heating and production process:

End use


Proportion of growth distri-

buted by end use


Reference

Distribution in 2025 Savings

Lighting 45 % 20 % 42 % 33 %

Pumping 5 % 5 % 5 % 5 %

Fridge / freezer 15 % 5 % 10 % 14 %

Ventilation and fans

12 % 5 % 8 % 5 %

Compressed and

process air

2 % 5 % 3 % 1 %

Other electric motors 5 % 5 % 6 % 8 %

Computers and

electronics 9 % 35 % 15 % 16 %

Other electricity usage

6 % 20 % 11 % 17 %

Total 100 % 100 % 100 % 100 %

106

Production: Distribution of electricity consumption in 2025 by applications

other than heating and production process:

End use


Proportion of growth distri-

buted by end use


Reference

Distribution in 2025 Savings

Lighting 10 % 20 % 14 % 11 %

Pumping 13 % 5 % 9 % 10 %

Fridge / freezer 8 % 5 % 6 % 8 %

Ventilation and fans

22 % 5 % 14 % 8 %

Compressed and

process air

11 % 5 % 8 % 4 %

Other electric motors 30 % 5 % 26 % 34 %

Computers and

electronics 1 % 35 % 11 % 11 %

Other electricity usage

4 % 20 % 11 % 15 %

Total 100 % 100 % 100 % 100 %

Transport

The transport model is also very simple. It consists of a forecast for transport

work measured in km/person and km/ton based on percentage of annual

growth. The transport fleet, consisting of a distribution of transport work by

transport fuels, can then be compiled for two parallel scenarios in the scenario

year. Transport work can be redistributed across the different transport tech-

nologies and it is also possible to alter estimates related to the level of success

of the utilisation of the different technologies (filling ratio). The demand for

the different transport fuels is then calculated on the basis of an estimated

development in the efficiency of each individual transport technology for

each fuel.

The results from the transport model are subsequently sent to the energy flow

model. An overall computation of fuel consumption is made and transport

fuels are produced.

107

Figure 3

108

3. The energy flow model

The purpose of the energy flow model (EM) is to provide a summary of the en-

ergy systems’ resources, fuel consumption and conversion based on the provi-

sions made for final energy consumption in the energy saving model. The EM

also contains estimates of investment and operating costs for the technologies

applied for the conversion of fuel to energy services. Thus, the model can cal-

culate the annual cost of investment in the existing production plant in 2025,

cf. Appendix 4. It is then possible to classify fuel consumption according to fi-

nal utilisation of energy services or according to sector.

The EM is a statistics model which assesses the energy system and only pro-

vides information on the whole energy system for a given year. In the case of

the technology scenarios and the reference scenario, the year is 2025. Each

technology scenario has its own spreadsheet which can be used to make com-

parisons to 2003 and to the reference scenario.

The model is divided into an input spreadsheet and a number of calculation

and information spreadsheets which are reviewed below.

Input spreadsheet

The assumptions in the input spreadsheet either originate from the duration

curve model or are fixed externally. All input is used to compile the reference

and technology scenarios.

It is only necessary to enter input into this spreadsheet when calculating the

scenarios. The other spreadsheets contain either calculations and aggregates

or assumptions that are not dependent on the individual scenarios, i.e. as-

sumptions related to investment and technology.

The first part of the spreadsheet, from row 6 to 39, contains assumptions re-

lated to operating hours for the individual technologies, the proportion of

condensation production and enforced electricity export. The input originates

from the duration curve model.

Rows 41 to 53 are of great significance to the distribution of fuel in the pro-

duction of electricity and heat. The input must be defined for each scenario

and, as a baseline, coal is the residual.

If heat pumps are used for household heating, this must be entered in column

N.

In rows 57 to 73 the production profiles from the duration curve model are

converted to operating hours for electricity production. These are required in

rows 9 to 39. It is also necessary to specify whether the gas used for electricity

production comes from gas turbines, micro combined heat and power or CCGT

in order to determine investment costs.

Rows 77 and 78 indicate the performance of the heat pumps and must be

compared with the performance figures in the duration curve model. Esti-

109

mates of losses in electricity and in the district heating network can also be

adjusted.

Estimates of total fuel resources are specified from rows 88-98. These originate

from the Danish Energy Authority’s Energy Strategy 2025. Note that fallow is

converted to a fixed quantity of energy. In reality, the quantity will vary de-

pending on the type of crop grown.

Finally, assumptions related to fuel prices, CO2 and electricity prices as well as

financial estimates of investment costs must be specified.

Investment estimates

The investment estimates originate from the Danish Energy Authority’s tech-

nology catalogue and Energy Strategy 2025.

Investment and operating estimates are converted to DKK per GJ to give an

impression of the investment, operating and fuel costs in the individual sce-

narios.

The method applied is described in more detail in Appendix 4.

Output spreadsheet

The figures in this spreadsheet are all required in the duration curve model

and are a summary of the numbers from the reference/ambitious spread-

sheet.

Calculation spreadsheet

This spreadsheet shows the intermediate results from the refer-

ence/ambitious spreadsheet and from the graphs at the beginning of the

spreadsheet.

The intermediate results are included in order to ensure that the final results

are based on consistent and correct calculations and, thus, to enable a quick

explanation of the background for the results.

Reference/ambitious spreadsheet

These two spreadsheets are the most significant as they summarise the total

energy flow; from fuel consumption to final energy consumption. Thus, they

indicate energy consumption, loss on conversion and the choice of energy ser-

vices to meet energy requirements.

The spreadsheet is divided into two parts.

The upper part, from row 1 to 33, summarises fuel consumption distributed

by energy service and sector on the left-hand side and fuel distribution by en-

ergy service and sector on the right-hand side.

The lower part, from row 38 to row 65, summarises the distribution of electric-

ity and heat production from condensation, combined heat and power and

separate district heat and, thus, can provide a CM value for the distribution

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between electricity and heat from the production of combined heat and

power. This part of the spreadsheet is divided into energy services on the left

and fuel consumption on the right.

Input to both of these spreadsheets comes from the input spreadsheet.

Technology spreadsheet

The spreadsheet indicates performance and the relationship between fuel

consumption and the utilisation of energy services for the production of en-

ergy end product, e.g. ethanol, hydrogen from electrolysis or CO2 capture.

The estimates are taken from the Danish Energy Authority’s technology cata-

logue and, in the case of ethanol and methanol, from Elsam.

These estimates are input to the ambitious spreadsheet.

2003

This spreadsheet summarises energy flows for 2003 in the same way as the

reference/ambitious spreadsheets.

The Danish Energy Authority’s energy statistics for 2003 form the basis for the

spreadsheet.

The Danish Board of Technology

Antonigade 4

DK - 1106 Copenhagen K

Denmark

Phone +45 33 32 05 03

Fax +45 33 91 05 09

[email protected]

www.tekno.dk

Giro (1199) 8 51 07 68

The Danish Board of Technology is to

further discussions about technology

assess possibilities and threats of

the technology

give advice to The Danish Parliament

and Government

The Future Danish Energy System - Technology Scenarios

Documents

Transcript of The Future Danish Energy System - Technology Scenarios