Denmark Energy efficiency report

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1 Denmark Energy efficiency report Objectives: o 246 ktoe/year of end-use energy savings by 22, including o 146 ktoe/year of energy savings for energy distributors by 22 Overview - (%/year) Primary intensity (EU=1)¹ % -- CO 2 intensity (EU=1) % - CO2 emissions per capita (in tco /cap) % + Power generation Efficiency of thermal power plants (in %) 3 -.1% - Rate of electricity T&D losses (in %) 6 +.% -- CO 2 emissions per kwh generated (in gco /kwh) % ++ Industry Energy intensity (EU=1) % -- Share of industrial CHP in industrial consumption (in %) % -- Unit consumption of steel (in toe/t) n.r. n.r. * and - for steel ++ Among best countries + Better than the EU average 1 - Below the EU average 1 --Among countries with the lowest performances Latest update: April The European Union, as the best performing region, is used as the benchmark.

2 1. Overview 1.1. Policies: 246 ktoe/year of energy savings by 22 Denmark s National Energy Efficiency Action Plan was adopted in June and reviewed in 211. It corresponds to existing policies, namely the political agreement on an energy savings initiative and the Action Plan for Renewed Energy Conservation (), the targets and measures of which went beyond those required by the EU ESD Directive. The Action Plan was completed in June by a memo that intensified existing energy savings measures, and by the Energy Agreement. That Agreement set an energy consumption savings target of 4 percent by 22 (total savings of 19.8 Mtoe) and increased the annual energy savings target to 1. percent of final energy consumption by 22, compared with (annual savings of 246 ktoe). Building construction requirements would be strengthened so as to reduce energy consumption in buildings by at least 2 percent in, 21 and 22 (ie overall reduction of at least 7 percent by 22). The measures included in the National Energy Strategy 2 (211), that focuses on fossil fuel independence by 2 and increased use of renewables, are expected to save up to 9.7 percent of energy consumption by 22. In March a Danish Energy Saving Trust was implemented, covering energy savings for all forms of energy and all sectors, excluding transport Energy consumption trends: slight decrease since Denmark s energy consumption per capita is very close to the EU average, at 3. toe. Total energy consumption increased by 1.1 percent/year between and, but then declined regularly until. In, it rose by 3.2 percent, back to its level. Figure 1: Energy consumption trends by sector 2 Other Industry Power generation 2 1 Mtoe 1 The share of the power sector in primary energy consumption is limited, at around 13 percent in (1 percent in ). In addition, the share of industry (including non-energy uses) is relatively low and is decreasing, from 18 percent in to 1 percent in. More than 7 percent of the energy is consumed by other sectors (mainly the transport and residential sectors). Oil covers 38 percent of primary energy consumption, followed by gas (23 percent) and coal (2 percent). Renewables account for 21 percent of primary consumption (18 percent for biomass and 3. percent for wind power). Denmark Country reports 2

3 Electricity consumption per capita is slightly above the EU average, at 6, kwh (+3 percent in ). Electricity consumption increased by 1.2 percent/year between and and declined until (-4.9 percent in ). In, electricity consumption rose by 2.4 percent to 33 TWh. Industry (including own uses in energy industries) accounts for 29 percent of total electricity consumption, compared with an average of 32 percent between and. This drop was caused by the fall seen in industrial activity due to the global economic crisis. Figure 2: Electricity consumption trends by sector TWh 4 3 Industry Others Energy efficiency trends: limited energy intensity improvements The energy intensity (primary energy consumption per unit of GDP) decreased by 1 percent/year between and, which is slower than the 1.6 percent/year average decrease in the European Union. During that period, efficiency in electricity generation improved very slightly (-.2 percent/year), while efficiency gains in industry averaged.3 percent/year. Figure 3: Energy intensity trends.% % %/year -.4% -.6% -.8% -1.% Total Power generation Industry Denmark Country reports 3

4 2. Power generation 2.1. Policies: energy savings obligation for energy distribution companies The Energy Agreement raised energy saving obligations for energy distribution companies from 72 ktoe/year to 129 ktoe/year as of. The Energy Strategy 2 (211), that aims to achieve fossil fuel independence by 2, prepares the ground for an increase in the savings obligations of energy companies by percent in 213 and by an additional 2 percent in Efficiency of the power sector: increased efficiency and lower carbon factor Figure 4: Efficiency of power generation and thermal power plants Figure : Thermal electricity capacity, by technology Steam Gas turbines Combined cycles 3 % Total power generation Thermal power plants GW Between and the share of low-efficiency technologies (oil and coal-fired plants) in power production dropped from 94 percent to 46 percent. The average power generation efficiency rate, which remained stable between and, rose from 37 percent to 4 percent in. The efficiency rate of thermal power plants is almost stable at around 3 percent. The rate of T&D losses is close to the EU average, at 6.3 percent in. It has been following a decreasing trend Figure 6: Electric T&D losses % Denmark Country reports 4

5 3. Industry 3.1. Policies: voluntary agreements and tax rebates The Danish NEEAP does not include any specific industry-oriented measures, since industrial energy consumption savings are included in the fulfillment of the energy distribution companies energy savings obligations. Denmark s Action Plan for Renewed Energy Conservation promotes the use of energy management and the transparency and benchmarking of energy consumption in industry, as well as the use of surplus heat. Voluntary agreements for energy-intensive industries were introduced in Denmark in, as part of the Green Tax Package: companies that enter voluntary agreements have to implement an energy management system, including energy flow screening (mandatory energy audits were removed) and undertake energy efficiency investments to obtain a CO 2 tax rebate. The energy tax on fuel and electricity in the residential and industrial sectors was strongly increased in. Subsidies for energy efficiency in industry were introduced in and lasted until late ; they covered investments in energy-efficient equipment, heat and power production with a low CO 2 content, energy audits or the development of energy-efficient technologies Energy consumption trends: stable industrial consumption Energy consumption in the Danish industry remained relatively stable, at around 3 Mtoe, until. It fell strongly in and (-4. percent and -13 percent, respectively) but grew by 7. percent in. Figure 7: Trends in industrial energy consumption 4 3 Mtoe 2 1 Electricity and gas are the most consumed energies in Danish industry; the share of electricity consumed by industry increased from 27 percent of overall industrial energy consumption in to 3 percent in. The share of gas rose noticeably, from 2 percent to 29 percent, to the detriment of coal and oil, which currently account for 3 percent and 2 percent, respectively (11 percent and 34 percent in ). Heat and biomass consumption has also increased, from 4 percent each to 8 percent and percent, respectively. The share of energy-intensive branches in industrial energy consumption is relatively low, at 3 percent in, and stable. The non-metallic minerals industry accounts for 2 percent (21 percent in ), followed by the chemical (8 percent, compared with 9 percent in ), paper ( percent) and steel (2 percent) industries. Denmark Country reports

6 1% 9% 8% 7% 6% % 4% 3% 2% 1% Figure 8: Energy consumption of industry, by source % Biomass Heat Electricity Gas Oil Coal/Lignite 1% Figure 9: Energy consumption of industry, by branch 9% 8% 7% 6% % 4% 3% 2% 1% % Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: low efficiency gains Between and industrial energy intensity decreased by.9 percent/year. This very limited improvement was due to a.4 percent/year increase in the unit consumption of the cement industry (energy consumed per ton of cement produced), which is the largest energy consuming industry in Denmark. Faster improvements took place in the paper and chemical industries (-3.4 percent/year and -6.1 percent/year, respectively), but they had a limited effect on industrial energy intensity since their shares in energy consumption are small. Denmark stopped producing crude steel in (more energy consuming than the production of derived products). Figure 2: Trends in the energy intensity of industrial branches 1.% %/year.% -1.% -2.% -3.% -4.% -.% -6.% -7.% - - Total* Chemical Cement Paper *Including construction and mining, Odyssee The share of industrial CHP in the electricity consumption of Danish industry increased fourfold between and, from 7 percent to 28 percent; it has decreased slightly since (26 percent in ). Denmark Country reports 6

7 Figure 3: Share of industrial CHP in industrial consumption 3% 2% 2% 1% 1% % % Between and the energy intensity of the manufacturing industry (ie excluding construction and mining) decreased by 1.3 percent/year. Of that improvement, 43 percent is attributable to efficiency gains in the industrial branches and 7 percent to structural changes, namely a growing share of low-intensity branches in industrial value added. The impact of energy efficiency gains decreased over the - period, since structural changes accounted for about 8 percent of the decrease in industrial energy intensity. Indeed, over that period, the share of energy-intensive industries in industrial value added decreased by 2 percentage points, while the share of the equipment branch (with a low intensity) rose by percentage points. Figure 4: Trends in the energy intensity of manufacturing and structural effect %/year.% -.2% -.4% -.6% -.8% -1.% -1.2% -1.4% -1.6% -1.8% - - Real variation Change at constant structure Structural effect, Odyssee Denmark Country reports 7