The Danish Board of
Technology
Technology Scenarios
The Danish Board of Technology
The Future Danish
Energy System
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
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
3
4
Preface
Brief Info on the Project
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 Danish Energy System” on this basis. The purpose of the project is to create an allround 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 suggests 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 sector 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 relevant 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.
5
The task force group consists of:
The Authors of the Report
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 parties in the Danish Folketing.
The Political Future Panel
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:
The External Steering
Committee
6
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
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
7
8
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 increased 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 renewable energy, Denmark is no longer dependent on imported oil. See figure 1.1.
PJ
1 000
900
800
gas
700
600
RE
coal
500
400
300
200
oil
100
1972
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994 1996
1998 2000
2002
2004
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.
The Future Danish
Energy System
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
9
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 secretary and a project manager.
In the course of the project four public hearings have been conducted. Members 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 hearings can be found on the homepage of the Danish Board of Technology
(www.tekno.dk).
1.1. Scenarios
First Step Technology
Scenarios
Cost Savings, Gas,
Wind, and Biomass
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 political 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 improvement of the climate envelope with regard to existing and new houses,
and on increased fuel efficiency of new cars. In the gas scenario highefficiency 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, especially offshore, and the development of a flexible consumption of electricity.
Electricity produced by wind power is applied to the production of heat, primarily 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 biomass 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.
Two Goals
The steering committee has established two quantitative goals for all the
technology scenarios:
•
•
10
Reducing CO2 emission by 50 % in 2025 compared to the 1990 level
Reducing oil consumption by 50 % in 2025 compared to the 2003
level
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 combination 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.
Model Tools
A model tool has been developed in the project in order to quantify the scenarios. 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 models. 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 Final Energy
Consumption
Gross Energy
Consumption
The combination scenario takes its point of departure in an effort in the consumption 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 decrease is almost 40% compared to 2004. The proportion of renewable energy
increases to 45 % of the gross energy consumption.
11
PJ
900
800
700
600
500
400
300
200
100
1964
Oil
1984
Coal and carbonsed coal
2004
Renewable energy, etc
2025
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 contributes 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 consumption, 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 households 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.
12
The Goals
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.
Million tons CO2
80,0
70,0
60,0
50,0
40,0
The combination scenario
30,0
20,0
10,0
0,0
'90
'91
'92
'93
'94
'95
'96
'97
Actual
'98
'99
'00
'01
'02
'03
'04
2025
Corrected
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 variations 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 production of the wind turbines. The coal will be consumed in the combined
heat/power production.
13
Import and Export of Energy and CO2
Export
200
150
Reference 2025 PJ
The combi scenario PJ
100
50
0
oil
coal
gas
biomass
biogas
waste
electricity CO2 (mt)
(50)
(100)
(150)
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 CO2emission 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.
Buildings, Equipment,
Offshore Wind Turbines
Housing+ standard
Housing+ consists of
energy neutral buildings, which in the
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 constructed buildings are established as energy neutral constructions (Housing+) - in Danish ”Bolig+”.
course of the year
produce at least as
much electricity and
heat as they
consume.
Heat Pumps and
Flexible Consumption
14
There will also be investments in offshore wind turbines and in infrastructure for the accumulation of the production from the wind turbines. Investments 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 consumption. Many of the investments necessary for the development of flexible
electricity consumption could come about gradually, when the consumers’
electricity meters and equipment are replaced by more advanced models
that allow for a response to hourly rates.
Biomass
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 investments in the existing tank systems of distribution of bio fuels.
Gas and District Heating
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 per Capita
Costs
The economy of the scenario is calculated as the annualised extra costs compared to the reference. The economy of the scenarios is calculated as the annualised 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 security, for example in the form of faulty fuel supplies and environment
(with the exception of CO2) are not appraised in this study. Given the precondition 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 equivalent 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 average 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 considerably 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.
15
Buildings and
Equipment
Intelligent Electrical
Equipment
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 actual current output load.
District Heating
When the energy consumption decreases and the share of wind power increases, the foundation of the district heating project will in many places decrease. 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.
Transport
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 development of electrical cars and plug-in hybrid cars, as well as a commercialisation 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.
Offshore Wind Turbines,
Heat Pumps, Operation
of the Electrical System
Buildings, Electrical
Equipment, Control, etc.
16
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 circuit, as well as road pricing technologies.
Wind Power
There will also be a significant export potential in the field of wind power
technology – especially offshore wind turbines.
Bio Fuels
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.
The Flexible Energy
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 (intelligent 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.
System
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 developing policy instruments and the inclusion of a broader group of interested 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 directed towards consolidating and checking the robustness of the combination 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 development in Denmark. The conclusions of the present report have been forwarded 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 answer to the hearing to the EU commission with reference to the present
work.
17
18
2. Introduction
All sectors of a modern society depend on energy supply. Increasing or decreasing energy prices and lack of energy will generate significant consequences. Increasing discharge of CO2 and other greenhouse gases from fossil
energy sources (oil, natural gas, and coal) and resulting climate changes influence human health conditions and economic bases for living.
Long Term Suggestions
are Required
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 suggestions for a future Danish energy policy with a good balance between
supply security, environment, and economy. These suggestions should encompass 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 dialogue about what type of Danish energy future we wish to have in a longterm perspective. The project endeavours to include a broad selection of representatives 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 departure in qualified analyses of the present energy system and the future
challenges and opportunities for development.
A Future Panel of
Politicians
The Steering Committee
Represents Players and
Interested Parties
The pivotal point of the project has been a Future Panel consisting of members 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 example environment, business development, and transport.
The project is managed by a steering committee, representing a large number 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 experts to work specifically with potential energy saving plans. The configurations of the steering committee, the task force group, and the savings group
can be seen in appendix 1.
19
2.2. The Course of the Project
Since its inception in summer 2004, the project has moved through the following phases:
•
•
•
•
•
•
The Roles of the Project
Participants
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 (including 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 combines 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 hearings, the meetings, and the seminars the steering group has continually received 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 options 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.
Four Public Hearings
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.
The Further Course of
the Project
20
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.
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
Four Technology
Scenarios
Energy Savings, Biomass,
Gas, Wind
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 scenarios 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 described.
The scenarios vary - primarily by virtue of different preconditions with regard 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 appliances).
The Combination
Scenario
Prior to the hearing on 18. May 2006 a seminar was conducted with the participation 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
The EU Commission’s
Presentation on Energy
In the EU commission’s presentation on energy policy (EU’s green book on
sustainability, competition, and supply security, March 2006) the commis-
Policy
21
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.
EU’s Prime Ministers
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 ministers.
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 suggestions of binding goals and an increased effort in relation to energy savings
and efficiency improvement.
Considerable Business
Potential
For Denmark energy technologies entail a great business potential. As a result 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 Commission’s presentations are areas where Denmark has knowledge and competence, and where the business potential for this reason is considerable.
Among other issues involved are the increased energy efficiency and application of sustainable wind and biomass energy.
22
23
3. Layout of the Scenarios
3.1. Four Technology Scenarios and a Reference
As a point of departure four technology scenarios were constructed, all focusing 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 reflect 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.
A+
Besparelser
Savings
Gas
Gas
A wish om
to increase
Ønske
at øge
Ønske
høj
A
wish om
for aenhigh
the application
gas
anvendelsen
af of
gas
grad af of selfdegree
in
the
transport
sector
i
transportsektoren
og
sufficiency with
to fuels, as
selvforsyning
af regard
både brændsler
and
in the production
of electricity
til
produktion
af el og varme.
Hertil
wellenergiprodukter,
as energy products
resulting
og
og dermed
and
heat.
In
addition
there
is theCO
kommer hensynet til at mindske
in independence
the developuafhængighed
af of
udviklingen
i
2
consideration
with regard to
emissionen
og olieafhængigheden.
ment in the world.
The
focus is
omverdenen.
Fokus
er på
reducing
the
CO
emission
and
2
on change
of the demand og
for
Der er store gasressourcer i
ændring
af energibehovet
the
dependence
on oil in
energy and
on developNordeuropa
og Rusland.
udvikling
af lavenergi
udstyr
Reference
Reference
Northern Europe and in
ment of low energy
NotIkke
a momentum
noget der
Russia.
equipment.
in askubber
particular
i éndirection.
retning.
TheEnergi
energy-markederne
markets and
thebrændselspriserne
fuel prices are
og
crucial
to the for
er
afgørende
Biomass
Wind
development
udviklingen
Vind
Biomasse
A wish
for more
A wish for
Ønske omselføget
diversified
fuelmere
conincreased
Ønske om
selvforsyning
sumption andbrændselsforbrug
an increased share
sufficiency
andogmore
diversificeret
og of
renewable
energy.
Furthermore
there
mere vedvarende
renewable
energy in the
øget andel
af vedvarende
energi.
isHertil
a focus
on theintegration
integrationafofenergi
the -,
electricity
the heat production.
energi
i el-and
og varmeproduk
kommer
energy,
the -farming,
and the transport
Furthermore
there willfortsat
be a contionen
. Dertil kommer
landbrugs
og transportsektoren,
og
sectors,
as a wish
be in the
tinued development
of the Danish
udvikling
af den danske
ønsket as
omwell
at være
med itoforreste
front
linemht
withudvikling
regard toafdevelopment
wind turbine industry.
vindmølleindustri
række
teknologi til
ofproduktion
technologyafinbiobrændsler
the production of biofuels.
Figure 3.1. The driving forces behind the individual scenarios, which focus on savings,
wind, gas, and biomass
No Isolated Formulas
24
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 illustrate the consequences of choosing one individual scenario with precisely
the technology portfolios necessary to realise the scenario. The four technology 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
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 reference 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 transport - 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 development. It is assumed that the configuration of the production technologies 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 stations (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 horizon, 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:
•
•
•
•
Quantifiable Goals
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 reference scenario the energy markets and the fuel prices determine the expansion 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.
25
3.3. A Combination Scenario
A+
Besparelser
Gas
Ønsket om at øge
Ønsket om høj
anvendelsen af gas
grad af
i transportsektoren og
selvforsyning af både brændsler
til produktion af el og varme. Hertil
og energiprodukter, og dermed
kommer hensynet til at mindske CO2
uafhængighed af udviklingen i
emissionen og olieafhængigheden.
omverdenen. Fokus er på
Der er store gasressourcer i
ændring af energibehovet og
Nordeuropa og Rusland.
udvikling af lavenergi udstyr
Reference
Ikke noget der
skubber i én retning.
Energi-markederne
og brændselspriserne
er afgørende for
udviklingen
Vind
Biomasse
Ønsket om øget
selvforsyning af
brændsler og mere
vedvarende energi i el- og
varmeproduktionen. Dertil
kommer fortsat udvikling af den
danske vindmølleindustri
Ønske om mere
diversificeret brændselsforbrug og
øget andel af vedvarende energi.
Hertil kommer integration af energiog landbrugssektoren, og ønsket
om at være med i forreste række
mht udvikling af teknologi til
produktion af biobrændsler
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 technology 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 independent 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, environmental, and energy-based challenges will in many ways seem different
in 2025. Retrospective views of the energy situation and the debate on energy 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.
Growth in Energy Services
1,5
1,45
1,4
Index, 2003=1
1,35
Households
Production
Commerce & Service
Transport
1,3
Heating
1,25
1,2
1,15
1,1
1,05
1
2003
2008
2013
2018
2023
Figure 3.2. Growth in Energy Services
The savings scenario differs from the other technology scenarios. The difference occurs through a focus on consumption issues – efficiency improvements
26
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 extremely 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 exist 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 suppliers, 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, incitements, and the behaviour of the public sector itself influence and develop
the markets in a certain direction.
Oil and the Price of
CO2 Quotas
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 scientific and methodical challenges associated with the assessment of the damages resulting from emission of green house gasses.
Limitations
A number of limitations have been drawn with regard to the scenario calculations. For instance, emissions and energy consumption from the offshore sector (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 specific costs involved in changing to more energy efficient cars have not been
part of the calculation.
Model Tools
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
27
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.
Limitations in the Model
The desire for speed means that the models handle reality in large-scale features. 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 calculations 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, Energy 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 potential is gained from the background reports to Energy Strategy 2025.
28
29
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 biomass respectively.
The savings scenario emphasises more efficient electrical equipment, improved 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 micro 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 efficient heat pumps, just like a large part of the transport sector will be based on
electrical cars. The biomass scenario primarily emphasises an increased application 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 updating 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 transport sector must contribute. The supply security was also emphasised in relation 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 business 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.
30
Combination Scenario
Fuel prices
Gross energy consumption (PJ)
493
Oil
50 $/bbl
Oil
143
Gas
39 DKK/GJ
Coal
20
Coal
55 $/ton coal
Gas
100
CO2 quota price
150 DKK/ton CO2
RE
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 consumption 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.
The final energy
consumption is the
amount of energy
delivered above the
cadastral limit to the
consumer and to
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”).
vehicles. It is the sum
of the delivered
amount of electricity,
district heating, and
fuels for process and
Final Energy Consumption 2025
PJ/year
700
heating, as well as
fuels for transport.
600
500
400
300
200
100
0
2003
Maintained Effeciency
Reference 2025
The combi scenario
Figure 4.1. Final energy consumption (excl. the transport sector).
31
Efficient Electrical
Equipment
Insulation of Buildings
The combination scenario presupposes an efficiency improvement in the electrical equipment sector, which results in a development in the cumulative final electricity consumption the equivalent of 5950 kWh/inhabitant in 2003
descending towards 4000 kWh/inhabitant in 2025. This results in an approximately 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 consumption 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 established 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.
Flexible Consumption
It is assumed that due to the emphasis on energy saving technology, more
electricity consuming equipment will enter the market with an inbuilt control, 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
32
Distribution of Gross Energy Consumption
900
RE
800
700
PJ
600
gas
117
169
500
400
coal
137
138
238
112
300
229
284
277
100
20
143
2003
2005
The combi scenario
200
100
oil
-
Figure 4.2. The distribution of the gross energy consumption in 2003 (PJ), in the reference
scenario, and in the combination scenario.
Oil and Gas
Consumption
Renewable Energy
Plug-in Hybrid Cars
Plug-in hybrid cars are
cars that run on electricity, as well as on petrol/diesel, and which
can be recharged from
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 encompasses 48 PJ wind and 177 PJ biomass. Furthermore there will be expansion 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 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 transport. The combustion
The fluctuating production from the wind turbines will primarily be evened
out by gas power, flexible electricity consumption and heat pumps. It is assumed 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.
engine is primarily
applied on longer trips.
33
4.5. Gross Energy Consumption Distributed in
Sectors
The Transport Sector
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 biodiesel, 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 example 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 sector) as a result of electrification of the railroad network.
Fuel Consumption, Sectors
1.000
900
Heating and process
800
Transport
700
District heating
600
Electricity
PJ
500
400
300
200
100
2003
Reference 2025
The combi scenario
Figure 4.3. Gross energy consumption distributed into sectors.
The Electricity Sector
34
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. Furthermore gas contributes approximately 10%, coal 8%, waste 8%, oil 1%, and
sun cells ½%.
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
0
150
Suncells
Table 4.4. Assumptions about power plant capacity in the combination scenario.
The District Heating
Sector
The production of district heating will be based on 55% renewable energy (including waste), 19% gas, 17 % heat pumps, 8 % coal and 1 % oil.
4.6. The Goals - CO2 and Oil Consumption
The CO2 Emission
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.
Heat Pumps
Million ton CO2
A heat pump works like
60
a fridge. Via a compressor energy is transferred
50
from an outdoor reservoir (open air/earth/
40
water) to an indoor
location for heating
30
purposes. Measured in
energy units, the heat
20
pump system can deliver up to four times
10
more heat compared to
the amount of electricity
0
they use. Heat pumps
1990
2005
Reference 2025
Combi scenario
can be used in collective
district heating systems,
as well as in private
households.
Figure 4.4. CO2 emissions in 1990, 2003, the reference scenario, and the combination
scenario.
35
The Oil Consumption
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 increased efficiency improvement and restructuring from passenger car transport 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.
Import and Export of energi and CO2
Eksport
200
150
Reference 2025 PJ
The Combi scenario PJ
100
50
0
oil
coal
gas
biomass
biogas
waste
electricity CO2 (mt)
(50)
(100)
(150)
Import
Figure 4.5. Import and export of energy (PJ) and CO2 (Mt) in 2025 (Denmark’s production potential 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.
36
Buildings, Equipment,
Offshore Turbines
Heat Pumps, Flexible
Consumption
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 infrastructure 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 consumption will be implemented gradually, as the consumers’ electricity meters
and equipment are replaced with new and more advanced models, which enable response to hourly rates.
Biomass
The increased application of biomass demands investments in new production facilities for the production of bio fuels. There will also be a need for investments in the existing tank plants distributing bio fuels.
Gas and District Heating
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.
Buildings and Equipment
Intelligent Electrical
Equipment
Technology Development
With regard to the technology development necessary to realise the combination 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 extent will be able to adjust the consumption to the actual load factor of the
electrical system.
District Heating
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 storage.
Transport
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-
37
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 accordance with the zones you pass through and the time of day you are on the
road.
Offshore Wind Turbines,
Heat Pumps and Operation
of the Electrical System
Buildings, Electrical
Equipment, Control, etc.
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 factor, and road pricing technologies.
Wind Power
Furthermore, in the field of wind power technology – especially offshore wind
turbines - there will be a significant export potential.
Biofuels
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.
The Felxible Energy
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 (intelligent 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.
System
The Costs of the Combination Scenario
The economy of the scenario is calculated as the annualised extra costs compared to the reference. The economy of the scenarios is calculated as the annualised 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 security, for example in the form of faulty fuel deliveries and environment
(with the exception of CO2) are not appraised in this study. The precondition
38
is that the consumption of fossil fuels decreases considerably in the combination 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 reference 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).
Difference in Yearly Annualised Costs between
Scenario and Reference
15.000
10.000
Million DKK
5.000
0
Fuel
Operation
Investment
Total
(5.000)
(10.000)
(15.000)
Figure 4.6. Annualised additional expenses of the combination scenario compared to the reference. The assumed price levels are: oil price of 50 $/t and a CO2 quota price of 150 DKK/ton.
There is a 6% interest. Please note: the costs are not discounted back to the present.
Compared to the reference, the fuel costs are reduced, while the investment
costs are larger. The operational costs are likewise increased in the combination scenario, among other reasons because biomass, biogas, and waste are
more difficult to handle than fossil fuels.
39
It should be noted that there are great uncertainties associated with assessing
the future costs of the energy system. The fuel prices might for example vary
considerably from the preconditions applied here. If an oil price of approximately 60$ 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 significant 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 related 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 relation to the present, the scenario costs could increase by approximately 400500 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.
Costs of Mechanisms
The scenarios encompass a number of mechanisms applied in the contexts of
consumption, supply, and transport, which should be seen as interacting factors. Mechanisms, which in isolation can seem relatively expensive (for instance 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 measures.
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 efficiency of the car population and the costs of relaying transport from individual 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 necessary in order to carry out the combination scenario.
40
Global
EU
Denmark
▪ Technology development
▪ No Norms pertaining to
electrical equipment
(remove the least
efficient products from
the market)
▪ Tightening of the building
▪ Continuation of the Kyoto
agreement or suchlike
international agreements
▪ Norms pertaining to the
energy consumption and
emission of vehicles
regulations
▪ Develop the market for
energy saving companies
(ESCO)
▪ Heat saving foundation
▪ Public purchasing policy
▪ Goals pertaining to the
share of renewable
energy
▪ Differentiated registration
fees
▪ Dynamic labelling
arrangements
pertaining to equipment, buildings, and
transport vehicles
cf. ECO-design
▪ Supply of wind turbine
parks and infrastructure
plan
▪ Goals for savings and
sustainable energy
▪ Transprot fees
▪ 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 changing 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.
41
5. References
42
•
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
43
Appendices
44
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
45
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 (Greenpeace) 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
46
Appendix 2: The Reference Scenario
B2.1. Why Have a Reference?
Because of the model’s simplified version of the energy system, the actual figures 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 applied. 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, Including a Strengthened Energy Savings Effort, Resulting from the Agreement
of 10. June 2005). This matches a scenario, where the final energy consumption, 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 development. The configuration of production technologies is assumed to be the
same as at present. However, the fuel consumption does decrease considerably over time. This is due to the fact that the existing power plants will presumably be replaced by new highly efficient plants (Best Available
Technology) when the power plant park is renewed. In this context it is presupposed that the investors in the electricity sector invest with the expectation 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 emission 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 detailed information can be found in Appendix 7.
47
Reference 2025
Fuel Prices
Gross energy consumption (PJ)
673
Oil
50 $/bbl
Oil
284
Gas
39 DKK/GJ
Coal
113
Coal
55$/t coal
Gas
138
CO2 quota price
150 DKK/t CO2
RE
138
CO2 emission
40 million ton CO2
Final energy consumption
excl. transport (PJ)
410
B2.1. Preconditions and Results
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 continuation of the effort embedded in the Energy savings plan of 2005. It applies till
2013.
Flexible Consumption
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 renewable energy and gas is on the increase.
The oil consumption is stabilised at 284 PJ. The expected growth in oil consumption is primarily evened out by the reduction of oil consumption in electricity 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 primarily 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 Transport Sector
48
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 transport related fuel consumption.
The CO2 Emission
The CO2 emission decreases to 40 million ton CO2, the equivalent of approximately 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
Supply Security
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.
Investments and Tech-
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 effort to develop new technologies. It is also assumed that no investments will
be made in infrastructure over and above the present capacity.
nology Development
49
Appendix 3: The Savings Scenario
B3.1. Why Focus on Savings?
Energy saving is an important factor in Denmark’s energy future. With a continued economic growth, and a sustained growth in the demand for energy
services, energy savings will be necessary in order to secure that the consumption does not grow at the same rate as the economic growth. Energy savings 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.
B3.2. Preconditions and Results
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.
Savings Scenario 2025
Fuel Prices
Gross energy consumption (PJ)
475
Oil
50 $/bbl
Oil
178
Gas
39 DKK/GJ
Coal
42
Coal
55$/t coal
Gas
128
CO2 quota price
150 DKK/t CO2
RE
127
CO2 emission
25 million ton CO2
Final energy consumption
excl. transport (PJ)
285
Table B3.1. Overall preconditions and results of the savings scenario.
Final Energy Consumption
As a result of a comprehensive effort in the energy savings area, the final energy 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 consumption can be reduced. On the other hand the gas and district heating consumption only show a small decline. In the industry there are likewise
savings, which primarily lead to a reduction in the coal and oil consumption.
50
Households
Large Potentials
A laptop uses app. 1/10
of the energy used by a
stationary ”thick”
screen.
The average consumption of the equipment
on the shelves in the
shops is app. 25% lower
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 percentages 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 existing low energy light sources already consume less than 6% of the incandescent bulb. At present low energy circulation pumps use only 20% of the
energy used by a “normal” pump, and in the electronic arena portable technology, optimised to low energy consumption, is on the rise.
than that of the equipment park in the homes.
40 % of the electricity
consumption in offices
is applied outside normal working hours.
Source: Elsparefonden
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.
Housing+ standard
Housing+ consists of
energy neutral
buildings, which on a
yearly basis consume
almost as much electricity and heat as they
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 renovated and will be in an average condition with regard to heat loss. This will
reduce the heat loss with approximately 80%.
consume.
In 2025 the cumulative floor space of buildings has increased with 10% and
half the new buildings are presumably housing+ standard. The savings generated 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%.
51
Business
Concerning the business world, the savings potential has likewise been calculated for a number of end uses. Table B3.3 shows the savings percentages calculated 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.
Transport
Plug-in Hybrid Cars
The energy consumption in the transport sector decreases in the savings scenario from 168 PJ in 2003 to 156 PJ in 2025, while the transport work has increased 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 transport 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 assumed that a further 4% of the transport work can be relayed from
car to bicycle.
•
Improvement of vehicle efficiency. In order to improve the popularity of efficient vehicles, a differentiated registration fee will be implemented 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 marketed models will be 50% more efficient than in the basis year. With
the delay in the system, with reference to replacement of the vehi-
Plug-in hybrid cars are
cars that run on electricity, as well as on petrol/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 transport. The combustion
engine is primarily
applied on longer trips.
52
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 another 10% - first and foremost applied as fleet vehicles (mail and delivery 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 electricity 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 hybrids (mainly delivery vans for city traffic).
With regard to the filling ratio in passenger transport vehicles, the same preconditions apply as in the reference scenario. The calculation involves a slight
decrease in filling ratio as a result of more cars per inhabitant.
Flexible Consumption
In the savings scenario it is assumed that because of the focus on energy saving 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 during the 900 hours, where there is a significant strain on the system.
Reduction of the Gross
Energy Consumption
Gross Energy Consumption
The lower demand for energy is significant in relation to the gross energy consumption, which is reduced from 807 PJ to 475 PJ in 2025.
53
Distribution of Gross Energy Consumption
900
800
117
700
600
169
RE
138
gas
500
138
400
238
300
113
200
100
283
284
2003
Reference
127
128
42
coal
oil
178
Savings
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.
Gross Energy Consumption, Sectors
1,000
900
heat
800
transport
district heating
700
electricity
PJ
600
500
400
300
200
100
2003
Reference
Savings
Figure B3.2. distribution of gross energy consumption in sectors in the savings scenario.
54
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.
CO2 Emission
60
Million tons CO2
50
40
30
20
10
0
1990
2003
Reference
Savings
Figure B3.3. C02 emission in the savings scenario.
Greater Oil Export
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.
Import og export of Energy and CO2
Export
150
Reference PJ
Savings PJ
100
50
0
oil
coal
gas
biomass
biogas
waste
electricity CO2 (mt)
(50)
(100)
(150)
Import
Figure B3.4. Import and export of energy in the savings scenario, 2025 (Denmark’s production potential minus domestic fuel consumption). Import of CO2 emission means that Denmark must reduce further in order to stay within the allocated quota or buy quotas abroad.
Export means that Denmark can sell quotas abroad.
55
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
Supply Security
The energy savings lower the demand for, and thereby the dependence on
imported fuel.
Investments and
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 contrary.
Infrastructure
Technology Development
and Export
- Development Needs
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 remain 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 actual 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.
- Export Potential
The export potential encompasses among other issues construction components for low energy building and renovation of existing buildings. Furthermore 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 necessary to implement the savings scenario.
56
Global
EU
Denmark
▪ Technology development
▪ Norms of electrical
▪ The public institutions
– equipment and gear
▪ Continuation of the Kyoto
agreement or suchlike
international agreements
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
should blaze a trail and
create an example in
order to create a market
▪ Campaign/support for
following up various
labelling arrangement
▪ Advanced energy declarations– 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
Table B3.4. Examples of mechanisms which are necessary on order to realise the savings
scenario.
The Devil’s Advocate and the Spin Doctor
Table B3.5. A catalogue of the pros and cons involved in the savings scenario
direction.
The Devil’s Advocate
The Spin Doctor
You cannot force people to buy efficient 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 calculation
There is only a need for half the capacity in
the form of thermal power pants in
comparison with the other scenarios
Table B3.5. The devil’s advocate and the spin doctor in the savings scenario.
57
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 replace 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 demands to the technology development.
Denmark’s gas reserves are decreasing and if a great share of the energy consumption 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 transmission 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.
B4.2. Preconditions and Results
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 furnaces 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 sector 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
Gross energy consumption (PJ)
657
175
Oil
50 $/bbl
Oil
Gas
39 DKK/GJ
Coal
6
Coal
55$/t coal
Gas
302
CO2 Quota price
150 DKK/t CO2
RE
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.
58
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 entails 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 consumption 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 electricity and heat production on the central plants will increase (could also be
applied in transport).
Flexible Consumption
Gas Covers Almost 50%
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.
Gross Energy Consumption
In 2025 the share of natural gas consists of 46% of the gross energy consumption. In 2003 the equivalent figure was 20%. The gas is applied in combined
heat/power production in central, decentralised, and individual micro combined heat/power plants, as well as in transport.
It is assumed that 50% of Danish households with gas furnaces will have micro 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 purposes be phased out.
Renewable Energy
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 renewable 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.
59
Distribution of Gross Energy Consumption
900
800
700
PJ
600
117
169
500
400
138
113
200
283
284
2003
Reference
RE
gas
138
238
300
100
175
302
coal
oil
6
175
Gas
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
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 transport 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.
60
Gross Energy Consumption, Sectors
heat
1,000
transport
900
district heating
electricity
800
700
PJ
600
500
400
300
200
100
2003
Reference
Gas
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.
CO2 emission
60
Million ton CO2
50
40
30
20
10
0
1990
2003
Reference
Gas
Figure B4.3. Emission of CO2 in the gas scenario.
Considerable Amounts
of Gas
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.
61
Import and Export of Energy and CO2
Export
150
Reference PJ
Gas PJ
100
50
LNG
0
(Liquid Natural Gas)
(50)
More than half of the
(100)
planet’s known gas
oil
coal
gas
biomass
biogas
waste
electricity CO2 (mt)
(150)
reserves are located
more than 3.000 km
from a possible place of
(200)
(250)
consumption. This has
resulted in an intensive
development of tech-
(300)
Import
nology to be applied in
the conversion of natural gas from gas to fluid,
thereby providing a
possibility of transporting large amounts.
Figure B4.4. Import and export of energy and CO2 in the gas scenario, 2025 (Denmark’s production 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 consumption 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 processheating 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.
B4.3. Challenges and Mechanisms
Supply Security and
Investment
The increase in the gas consumption results in needs for investments in the
gas transmission, the distribution network, and presumably also in gas storage 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 contributions (increased amount of extraction) and exploration contributions (new
62
findings). In comparison the Danish consumption of gas is today approximately 4 billion Nm3. In the gas scenario this figure climbs to approximately
12 Nm3 (300 PJ).
Billion Nm3
exploration contribution
technology contribution
production and backup contribution
Figure B4.5. The Danish Energy Agency’s prognosis for a future Danish energy production
distributed across backup contributions, technology contributions, and exploration contributions (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 established 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 transmission 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 expanded, because the micro combined heat/power plants replace the existing
gas furnaces.
Technology Development
and Export
- Needs for Development
- Export Potential
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 electricity and heat production, as well as in the transport sector, is by known technology.
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.
63
Mechanisms
Table B4.6 presents examples of some of the mechanisms necessary to implement the savings scenario.
Globalt
EU
Denmark
▪ Securing more supply
sources
▪ … Establishing an infrastructure for import of
gas
▪ Establishing of an infrastructure for import of
gas
▪ Securing more supply
sources
▪ Securing more supply
sources
▪ Promotion of gas in the
transport sector (standardising, norms, and
possibly goals with regard
to gas in the transport
sector)
▪ 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.
The Devil’s Advocate and the Spin Doctor
Table B4.7. A list of the pros and the cons involved in the scenario.
The Devil’s Advocate
The Spin Doctor
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 infrastructure, not least in the transport
sector
Optimum utilisation of the established
gas transmission and distribution network
Gas is the first step on the way to a
CO2 free energy system
No need for development of risky technology
Table B4.7. The devil’s advocate and the spin doctor in the gas scenario.
64
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 market, it is important to back up the domestic industry. There is among other issues a need for further development and demonstration of offshore wind
turbine technology and a need to test technologies and processes, which secure 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 businesses, 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 renewable 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.
B5.2. Preconditions and Results
Plug-in Hybrid Cars
Plug-in hybrid cars are
cars that run on electricity, as well as on petrol/diesel, and which
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 interaction between the electricity sector, the heating sector, and the transport sector, which enables the incorporation of large amounts of wind power in the
electricity sector.
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-
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 instance on cold and quiet winter days.
port. The combustion
engine is primarily
applied on longer trips.
65
Wind Scenario 2025
Fuel prices
Gross energy consumption (PJ)
594
176
Oil
50 $/bbl
Oil
Gas
39 DKK/GJ
Coal
6
Coal
55$/t coal
Gas
177
CO2 quota price
150 DKK/t CO2
RE
235
CO2 emission
23,4 million ton CO2
Final energy consumption (PJ)
384
Table B5.1. Overall preconditions and results.
Final Energy Consumption
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% today to 10% in 2025. The relaying will occur primarily by changing the energy
source from oil to electricity in the operation of heat pumps.
Flexible Consumption
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 principle 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 present scenario.
-
Hydrogen cars where the hydrogen is produced in an electric conduction plant (fission of water to hydrogen and oxygen via electricity), which has a flexible production mode that can be applied in
relation to the needs of the electrical system.
A heat pump works like
a fridge. Via a compressor energy is transferred
from an outdoor reservoir (open air/earth/
water) to an indoor
location for heating
purposes. Measured in
energy units, the heat
pump system can deliver 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.
66
-
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 system).
-
Increased application of electricity in heating via heat pumps will
contribute to increasing the flexible electricity consumption potential 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.
10% Less Fuels
Fuel Consumption
The cumulative fuel consumption in the wind scenario in 2025 will be approximately 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 approximately 55% of the consumption in 2003.
Wind Power Constitutes
60% of the Electricity
Consumption
The Transport Sector
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
67
the cumulative goods transport carried out by trains), for example as a result
of increased electrification of the railroad net.
Distribution of Gross Energy Consumption
RE
gas
900
coal
800
700
PJ
600
169
500
400
oil
117
137
138
112
300
177
200
100
236
238
6
284
283
176
2003
Reference 2025
Wind
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
Reduced Considerably
The oil consumption is considerably reduced from approximately 283 PJ in
2003 to approximately 176 PJ in 2025. By way of comparison the oil consumption in 2025 is approximately 284 PJ in the reference scenario.
The reduction in the oil consumption is gained by applying electricity and hydrogen in the transport sector. Furthermore there is a considerable phasing
out of oil for heating in private homes and in the industry. The oil consumption is replaced by electricity, which is applied in efficient heat pumps among
other places.
Distribution of Fuels in
Sectors
68
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 electricity consumption increases in the wind power scenario compared to the reference 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.
Gross Energy Consumption, Sectors
heat and process
1,000
transport
900
district heating
800
electricity
700
PJ
600
500
400
300
200
100
2003
Reference 2025
Wind
Figure B5.2. Distribution of gross energy consumption in sectors.
Import and Export
In the wind scenario the possibilities of exporting oil are increased considerably 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 consumption 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 turnover 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.
69
Energy Balance (- deficit and +surplus)
150
Reference 2025 PJ
Wind PJ
100
50
0
oil
coal
gas
biomass
biogas
waste
electricity CO2 (mt)
(50)
(100)
(150)
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.
70
CO2 Emission
60
50
Million ton CO2
40
30
20
10
0
1990
2003
Reference
Wind
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.
B4.3. Challenges and Mechanisms
Supply Security
The scenario increases the supply security with regard to coal and oil considerably, but the need for import of gas will increase a little. There will be no
need to import biomass.
Infrastructure and
In the scenario there is a need for a massive investment in offshore wind turbines and infrastructure for the accumulation of the production from the turbines. Furthermore there is a need for investments in collective and
individual heat pumping systems and for the development of flexible electricity 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 turbines and electricity infrastructure would demand collective planning in close
co-operation with Denmark’s neighbours.
Investment
71
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 capacity are assessed to be approximately 9 billion DKK – the equivalent of 300
million DKK for an offshore wind turbine plant of 200 MW.
Export Potential
The scenario’s most significant export potentials are naturally located within
wind power technology – especially offshore turbines. In this context Denmark 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 electrical system, where consumers, compared to the present, play a much more active 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 balance of the electrical system hour by hour).
Needs for Research
and Development
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 activities)
New components for the electrical systems (to secure a safe operation 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 necessary to implement the scenario.
72
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)
▪ Supply of offshore wind
turbine parks
▪ Energy efficiency
norms for new cars
▪ 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.
The Devil’s Advocate and the Spin Doctor
Table B5.7. The pros and the cons of the wind scenario.
The Devil’s Advocate
The Spin Doctor
The scenario’s economy depends
among other things on a cost reduction
of offshore wind turbines
High energy efficiency (=>low gross
energy 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 controlled from Denmark to a limited extent (hence it would be interesting to
get the EU to join the project)
Cost efficiency
Development of large export potentials
in the fields of wind power and flexible
electricity consumption.
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.
73
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 energy 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 foreseeable future increases the wish to strengthen the Danish supply security by
diminishing the dependence on the oil.
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.
The Danish energy system is constructed around the integration of the production of electricity and heat, the application of the farming sector’s waste
products, and the optimising of the energy consumption. This scenario integrates the production of electricity, heat, transport fuels, and surplus products
from the farming sector and can thus be seen as an extension of the integration project in the Danish energy system. Transport fuels here include ethanol, biodiesel, and synthetic transport fuels such as methanol and RME.
An advantageous way
of producing ethanol
and methanol is via a
B6.2. Preconditions and Results
combination of electricity and heat in
heat/power stations.
The main mechanism in this scenario is the production of biofuels for transport purposes in co-production with existing heat/power units, while biodiesel 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 process, while rape is used for diesel. The present fallow areas are likewise implicated 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 scenario and the fluctuating production can be combined with the need for electricity in electrolysis.
74
Biomass Scenario 2025
Gross energy consumption (PJ)
710
Oil
50 $/bbl
Oil
153
Gas
39 DKK/GJ
Coal
99
Coal
55$/t coal
Gas
129
CO2 quota price
150 DkK/t CO2
RE
329
CO2 emission
29 million ton CO2
Final energy consumption
excl. transport (PJ)
413
Fuel Prices
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.
Flexible Consumption
The Gross Energy
Consumption increases
It is assumed that there are 250 GWh of flexible electricity use as a result of intelligent consumption. This is the equivalent of disconnecting approximately
500 MW of electricity consumption during the 500 hours when the electrical
circuit is under pressure.
Gross Energy Consumption
The cumulative gross energy consumption in the integration scenario is 5%
higher than in the reference scenario (710 PJ compared to 673 PJ). In comparison the gross energy consumption was approximately 840 PJ in 2003. See figure B6.2.
The most significant cause for the increase is the energy spent producing alcohol, biodiesel, and methanol in the transport sector. 25% of the total gross
energy consumption is applied in the production of these transport fuels.
40% Is Renewable energy
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 production increases from 14% in 2003 to 53% in 2025. Wind power covers 23% of
the electricity production.
75
Distribution of Gross Energy Consumption
900
800
117
700
600
169
RE
138
Gas
Coal
Oil
329
500
400
138
238
113
300
129
200
99
283
100
284
153
2003
Reference
Biomass
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 consumption and is applied in the production sector for individual heating,
heat/power, and separate heat production.
The Oil Consumption Is
Reduced by 50%
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
Cross Energy Consumption, Sectors
Heat
1,000
Transport
District heating
Electricity
900
800
700
PJ
600
500
400
300
200
100
2003
Reference
Figure B6.2. Gross energy consumption, sectors.
76
Biomasse
The Transport Sector
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 application of petrol/diesel in the relation 1:1 (measured in terms of energy content).
Import and Export
Import of Gas and Biomass
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.
Export of Oil
The decreasing national oil consumption provides Denmark with the possibility of exporting oil in 2025.
Import and Export of Energy and CO2
Export
200
150
Reference
Biomass PJ
100
50
0
Oil
Coal
Gas
Biomass
Biogas
Waste
Electricity CO2 (mt)
(50)
(100)
(150)
Import
Figure B6.3. Import and export of energy (PJ) CO2 (Mt) in 2025 (Denmark’s production potential 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.
Cutting the CO2 Emmission
in Half
The CO2 Emission
The CO2 emission will be reduced with 44 % compared to 1990. This is primarily due to the increased share of renewable energy which replaces oil in the
transport sector.
77
CO2 Emission
60
Million ton CO2
50
40
30
20
10
0
1990
2003
Reference
Biomass
Figure B6.4. CO2 emission
The Goals
In the biomass scenario the goal of reducing the oil consumption is all but attained. 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 consumption in the sectors of individual heating and process purposes with electricity and biomass.
B6.3. Challenges and Mechanisms
Supply Security
The scenario increases the supply security with regard to fossil fuels and especially oil, but increases the dependency on the import of biomass.
Investments
The biomass scenario demands investments in new production facilities for
the production of biofuel. Biofuel could also be imported. It is, however, assumed that the refinement of the biomass takes place in Denmark. The general 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.
Research and Development
78
At the moment there is intensive research and development in the application of enzymes in the production of ethanol. It will be necessary to continue
research and development.
Export Potential
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
▪ Demonstration projects
▪ Goals
▪ 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
-
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 application 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
The spin doctor
- 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.
79
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.
Final Energy Consumption and Conversion Loss
250
Transport
PJ/year
200
Household
Service
Husholdning
150
Production
Loss
100
50
0
Reference
Savings
Biomass
Wind power
Gas
Combination
Reference
Figure B7.1. Final energy consumption distributed by scenario and utilisation. The total conversion 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.
Same Number of Energy
Services
In all scenarios, the consumer receives the same number of energy services.
The savings scenario and the combination scenario stand apart from the others as energy consumption in these scenarios is lower across the board. This is
also true of energy loss; measured in absolute numbers, lower energy consumption 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 energyintensive 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 significantly in the savings scenario and the combination scenario and increases in
the biomass scenario.
80
Gross Fuel Consumption
PJ/year
800
700
Waste
600
Biogas
500
Biomass
400
Wind power
300
Natural gas
200
Coal
100
-
Oil
Reference
Gas
Biomass
Wind
Savings Combination
Oil goal
Figure B7.2. Gross energy consumption for the individual scenarios
Oil Consumption
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 scenario, 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 Danish oil production distributed by contribution to reserve, technology (increased 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 consumption 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.
81
Million m3
3030
exploration
contribution
exploration
contribution
technology
contribution
technology contribution
reserve contribution
reserve contribution
2020
- --570
570PJP
10010
----570
300
300PJPJ
- --120
120PJPJ
0
0
2005
2005
2010
2010
2015
2015
2020
2020
2025
2025
2025
Figure B7.3. Prognosis for future Danish oil production: Distributed by reserve contribution,
technology contribution and exploration contribution (based on “The Danish Energy Authority 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 scenarios, 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 consumption). 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 contribution).
82
Trade Balance for Fuels and CO2 Quotas
10.000
Reference
4.000
Gas
2.000
Biomass
Savings
Combination
Total
-8.000
Gas
Coal
-6.000
Wind power
CO2 quotas
-4.000
Electricity
Biogas
-2.000
Biomass
0
Waste
6.000
Oil
million DKK
8.000
-10.000
-12.000
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 combination 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.
Tons of CO2 per year in millions
CO2 Emissions
60
Total CO2
50
Reduction target
40
30
20
10
0
1990
2003
Reference
Gas
Biomass
Wind
Savings Combination
Figure B7.5. CO2 emission in the individual scenarios.
83
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 repayments 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 parameter which enables a relative comparison of the technology scenarios. The calculations 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 Authority’s recommendations for macroeconomic calculations. There is a more detailed 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 scenario. The comparison presupposes an oil price of USD 50/barrel, a CO2 quota
price of DKK 150/ton and an interest rate of 6%.
84
Annualised Extra Costs
15,000
DKK million per year
10,000
5,000
0
Fuel
Operations
Investments
Total
-5,000
-10,000
Gas
-15,000
Biomass
Wind
Savings
-20,000
Combination
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%.
Gas, Biomass and Wind
It is apparent that the total costs of the gas, biomass and wind power scenarios 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 developments 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.
Savings
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.
The Comnination Scenario
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.
The Development of
All of the technology scenarios are expected to provide Danish trade and industry with a positive spin-off. Due to the inherent diversity of the various
scenarios, their potential will be focused towards different areas of Danish industry. In any case, in connection with trade and export, the creation and ex-
Danish Industry
85
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 sensitivity 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 influence on the results.
Rising of Oil Prices
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
Price of coal = 30+0.5*Oil price
Price of straw =21+0.2*Oil price
Unit: DKK/GJ
Unit: USD/ton
Unit: DKK/GJ
Finally, a number of sensitivity analyses will be carried out for each specific
scenario:
The Gas 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.
The Biomass Scenario
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 biomass into transport fuel. The scenario is tested on a biomass price which fluctuates 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 barrel 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.
The Wind Power Scenario
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 investment costs which fluctuate between minus 25% and plus 50% in relation to
the investment costs applied.
The Savings Scenario
The savings scenario differs from the other scenarios as it focuses on the assumption that there will be investment in a large number of technologies. It
86
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 represent 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 investment in energy savings.
In figures B7.7 and B7.8, the scenarios’ extra costs are compared to the references 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 uncertainties if the price of oil is fixed at USD 100/barrel.
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
15000
10000
Combination II
Combination I
Savings II
-20000
Savings I
-15000
Biomass II
Wind power II
-10000
Biomass I
-5000
Gas II
0
Wind power I
5000
Gas I
DKK million per year
The Combination Scenario
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.
87
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
15000
10000
Combination II
Combination I
-25000
Savings II
-20000
Savings I
Wind power I
Wind power II
-15000
Biomass II
-10000
Biomass I
-5000
Gas II
0
Gas I
DKK million per year
5000
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 technology 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 applies 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 development 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.
88
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
The savings
scenario
▪ Spreading the use of
low-energy technology
▪ Norms
▪ Involving many players
▪ Technological develop
ment – appliances and
equipment
▪ Reliability of supply gas
▪ Establishment of an
infrastructure for the
import and distribution of gas
▪ Marking schemes
▪ Gas in transport sector
The wind
power scenario
▪ The infrastructure must
be able to handle large
quantities of wind power
▪ Technology development
and demonstration (offshore wind turbines)
▪ Fluctuating electricity
production
▪ 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
challenges and mechanisms
▪ Ensure more sources of
supply
The combination scenario consists of a combination of
The gas
scenario
Examples of
mechanisms
▪ Norms
▪ Taxation changes
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.
Savings
Large savings require, among other things, more widespread use of lowenergy appliances and equipment. International norms and standards are
mechanisms which can be applied but Danish efforts are also necessary. Continued technological development of both appliances and equipment is also a
requirement.
Large Quantities of
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-
Wind Power
89
ances, flexible electricity production, use of electricity in the transport sector
and the exchange of electricity with neighbouring countries.
Gas
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.
Biomass
The biomass scenario foresees that almost 40% of the total gross energy consumption 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 agricultural sector.
90
Appendix 8: Provisions and results
PJ
Energy consumption
Transport
Household
Service
Production
Loss
Gross fuel
consumption
Reference
Saving
Biomass
Wind power
Gas
Combi
673
475
710
594
657
493
195
162
80
171
65
151
101
53
131
39
196
162
80
171
101
155
171
0
75
193
187
162
80
171
57
144
131
0
51
169
673
475
710
594
657
493
Oil
Coal
284
113
178
42
153
99
176
6
175
6
143
21
Natural gas
Renewable energy
Electricity
District heating
138
138
203
74
128
127
126
69
129
329
250
56
177
236
232
72
302
175
203
74
100
230
146
62
126
85
152
175
127
97
6
46
25
31
16
1
17
21
32
14
2
43
30
38
40
2
0
44
105
24
1
0
65
32
29
0
0
97
49
31
118
6
41
93
1
16
129
1
37
116
1
0
134
1
0
104
1
6
33
37
0
40
37
0
23
52
15
52
47
16
63
50
20
19
60
15
Conversion
Electricity
production
Oil
Coal
Natural gas
Wind power
Other renewable energy
District heating
Oil
Coal
Natural gas
Other renewable energy
Heat pumps
Household
consupmtion
410
285
413
384
413
304
Electricity
Heating
Oil
Coal
Natural gas
Renewable energy
115
96
85
10
75
30
60
77
49
4
64
30
115
97
39
6
70
87
139
97
39
6
71
34
109
110
64
6
91
34
76
82
26
5
68
48
Oil
Electricity
195
184
2
152
126
19
219
110
26
169
133
19
188
108
3
138
115
11
0
9
0
0
0
0
7
0
0
0
0
37
29
18
0
0
8
4
0
4
68
9
0
0
0
2
10
0
0
0
2079
890
2399
756
2799
1869
4000
5600
2399
712
2639
1821
13
4
16
24
21
13
0.90
0.44
0.91
0
0.86
1.8
0.88
2.05
0.90
0.42
0.73
40.10
24.95
28.55
24
31.02
19
Transport
Natural gas
Biodiesel
Ethanol
Methanol
Hydrogen
Other key figures
MW vind on shore
MW vind off shore
Million ton CO2
Condensation
production %
Enforced exsport
CM value
CO2 emission
91
Appendix 9: Macroeconomics
Operating costs and investments
Financial viability is calculated as the cost of annual investment subject to investment in existing assets in the energy system in 2025. Expansion and
changes in relation to today are the only parameters included in the infrastructure costs. Reinvestment in existing electricity, gas and heating infrastructure is not included.
Each GJ of energy used is converted to and divided into fuel, operating and investment 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 biodiesel 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 Ministry 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 conclusions 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, converted 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 applied.
C02 is also considered a production input and, if emissions exceed the national quota, costs for the purchase of quotas are added. Similarly, emissions
which fall short of the national Danish quota will result in an income.
92
Appendix 10: The analysis models
1. The duration curve model
The purpose of the duration curve model is to analyse correlations in the Danish 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 relatively simple spreadsheet model. The model cannot be compared with advanced 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 different plants (number of full load hours in one year) is an important 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 production (only for electricity). The proportion of condensation-based
electricity production is an important input parameter to the energy flow calculations.
-
The size of potential electricity overflow. When wind power production 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 (Germany – 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. However, 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 historic 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 turbine (2 off-shore and 2 on-shore wind turbines, one of each in East Denmark
93
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 thermal 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 demand, high demand and peak demand capacity (see figure 1 below). The duration curve also illustrates the electricity overflow in the scenario.
Electricity Consumption Duration Curve in Segments of 500 MW
Elforbrugsvarighedskurve - fordelt på segmenter af 500 MW
(Mind: The
duration curve must be opdated by means of macro)
(Husk: varighedskurven skal opdateres vha. makro)
8000
6000
MW
4000
2000
0
1
501
1001
1501
2001
2501
3001
3501
4001
4501
5001
5501
6001
6501
7001
7501
8001
8501
-2000
Eloverløb
Electricity
overflow
-4000
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 below 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
94
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 calculations 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 operating hours – whereas gas technologies, which generally have low investment costs, are assumed to supply high demand/peak demand (100 – 5000
hours).
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
500
3.688.320
1.000
3.473.534
1.500
3.177.494
2.000
2.793.903
2.500
2.401.068
3.000
1.975.346
3.500
1.490.180
4.000
988.988
4.500
519.393
5.000
156.879
5.500
25.300
6.000
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
To
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.
2.
3.
4.
Combined heat and power
Heat pumps
Heat storage
Boilers
The first step is to meet consumption needs using excess heat from the thermal 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 consumption 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.
95
If the heat production available from combined heat and power and heat
pumps exceeds heat requirements, the excess will be added to the heat storage 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 storage 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 consumption 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.
8000
MW
6000
4000
2000
0
1
501
1001 1501 2001 2501 3001 3501 4001 4501 5001 5501 6001 6501 7001 7501 8001 8501
-2000
-4000
-6000
Heat consumption
Heat pump
Boiler
Storage
Combined heat and power
Figure 3. Example of the use of heat production technologies to meet the requirement for district 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
96
charged when it is best for the electricity system. Therefore, the model specifies total electricity consumption by the transport sector (input from the energy 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” consumption 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.
Increased electricity
consumption (transport, electrolysis…) PJ
Increased electricity
consumption (transport, electrolysis…) MWh
6.408.889
Proportion of inflexible consumption (distributed evenly
over the hours in the year)
(residual)
23,07
Proportion of very
flexible consumption
(i.e. when it is best for
the system)
25%
Increase per hour (MW)
Proportion of
consumption at night
(between 11.00 p.m.
and 6.00 a.m.)
25%
Increase per hour (MW)
183
Hours
1.602.222
CHECK CUT-OFF!
1100
Hours
2.926
Very flexible (MWh)
Inflexible (MWh)
Increase per hour
(MW)
548
Hours
8.736
50%
1.602.222
2.912
Consumption at
night (MWh)
3.204.445
indicate cut-off (MW) for
very flexible consumption
500
Figure 4. Extract from the duration curve model. Example of input to “Electricity for transport”.
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 electricity system is under pressure.
97
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 consumption 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.
Note that general electricity consumption
is increased correspondingly so that
there is no overall reductionin electricity
consumption!
Reduced electricity
consumption (in peak
demand hours) (MWh)
(250.000)
Reduction per hour
-639
Hours
391
Reduced electricity consumption
Flexible (MWh)
Cut-off (MW)
4.500
(0)
Figure 5. Extract from the duration curve model. Example of input to “Flexible electricity consumption”.
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 profile 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
98
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 intensity 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
1,9
0,26
1,0
1,00
– heat
Transport
Transport differs from the other sectors in that growth is specified as the annual growth in transport work and not as the economic growth in the transport 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 percentage 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.
99
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 Service, 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 consumption by household lighting) at a constant level of efficiency, i.e. how will
consumption develop given economic growth and energy intensity if the efficiency 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 regulated on the basis of assumed efficiency development and the result is the energy 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 Authority, December 2004. Potential savings are computed for a number of end
users who jointly represent commercial potential. The transport sector is not
100
included. Savings that can be achieved using existing technology, and that
can be gained before 2015, represent the macroeconomic potential. This basically corresponds to the calculations in the action plan. The maximum potential contains an extra effort which will require, among other things, research
and development if it is to be realised.
All industry (- transport)
Current consumption 2003
2003 figures
Macroeconomic savings
District
heat
TJ
Maximum potential
Fuel
Electricity
End use
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
%
Fuel
Electricity
TJ
TJ
District
heat
TJ
%
Fuel
Electricity
TJ
TJ
District
heat
TJ
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
30%
Work transport
23025
0
Total production process
98728
6948
4306
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%
Secondary energy
0
58870
0
Heating of premises
16627
2417
25462
68235
29768
Total
Grand total
115355
213358
15%
25%
2%5
3454
0
0
23537
1531
1022
0
16445
0
4157
604
6366
27693
18580
7388
53660
40%
44%
6908
0
0
37033
2341
1848
83
0
33806
0
6651
967
10185
43683
37113
12033
92830
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. Savings 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 savings for the individual industries are distributed by lifetime and by simple
microeconomic repayment period (the table is taken from the abovementioned report). Costs are calculated according to 2003 prices. The energy
prices for industry in 2003 are also included in the spreadsheet so that the actual investment costs for each individual savings initiative can be derived.
101
Investments that have been included with a repayment period of 0 years are
initiatives which do not require extra investment if more energy-efficient solutions 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 savings 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:
102
Table 2
Households
Current consumption 2003
2003 figures
Fuel
End use
Electricity
TJ
TJ
Macroeconomic savings 2025
District
heat
TJ
Fuel
%
Electricity
TJ
TJ
Maximun potential 2025
District
heat
TJ
Fuel
%
Electricity
TJ
TJ
District
heat
TJ
Lighting
Pumping
Fridge / freezer
Computers and
electronics
Other electricity usage
Cooking
Washing machines
TV / video
Heating of premises
0
0
0
0
5756
2074
7110
1015
0
0
0
0
35%
35%
15%
40%
0
0
0
0
2015
726
1067
406
0
0
0
0
75%
75%
30%
80%
0
0
0
0
4317
1556
2133
812
0
0
0
0
0
1143
0
0
80987
3005
3386
5079
3047
6839
0
0
0
0
67917
25%
30%
35%
30%
25%
0
343
0
0
20247
751
1016
1778
914
1710
0
0
0
0
16979
50%
65%
70%
65%
40%
0
743
0
0
32395
1503
2201
3555
1981
2736
0
0
0
0
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 calculation of potential savings and associated costs that the specified savings percentages 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 technology 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 energyconsuming appliances can, to a large extent, be politically influenced. If international 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 energy-efficient appliances? Above all, production costs often depend on the
number of products produced. Therefore, it is not certain that a policy pro-
103
moting production of energy-efficient appliances will result in more expensive appliances.
To a certain extent, we attempt to include these aspects in the economic assessment 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 (represented in figure 1 as lifetime and repayment period) and, at the other extreme, it is assumed that investment costs will be halved, cf. abovementioned arguments.
All costs in the model are subsequently calculated as annualised costs in relation 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 implementation 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, presumably, represent the largest proportion of growth in electricity services.
However, even if the distribution applied to growth is the same, the distribution 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 adjusted distribution is subsequently applied to the proportion of electricity
consumption by industry and service and by production unrelated to production process energy or heat. The tables below indicate the way in which displacement 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.
104
Households: Distribution of electricity consumption in 2025 by applications other than heating:
End use
Distribution
in 2003
Proportion of
growth distributed
by end use
Distribution
in 2025
Reference
Distribution in
2025
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 %
100 %
100 %
100 %
100 %
Total
Industry and service: Distribution of electricity consumption in 2025 by
applications other than heating and production process:
End use
Distribution
in 2003
Proportion of
growth distributed by end use
Distribution
in 2025
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 %
100 %
100 %
100 %
100 %
Total
105
Production: Distribution of electricity consumption in 2025 by applications
other than heating and production process:
End use
Distribution
in 2003
Proportion of
growth distributed by end use
Distribution
in 2025
Reference
Distribution
in 2025
Savings
Lighting
10 %
20 %
14 %
11 %
Pumping
13 %
5%
9%
10 %
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 %
100 %
100 %
100 %
Fridge / freezer
Total
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 technologies 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.
106
Figure 3
107
3. The energy flow model
The purpose of the energy flow model (EM) is to provide a summary of the energy systems’ resources, fuel consumption and conversion based on the provisions 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 calculate 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 final utilisation of energy services or according to sector.
The EM is a statistics model which assesses the energy system and only provides 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 comparisons 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. assumptions related to investment and technology.
The first part of the spreadsheet, from row 6 to 39, contains assumptions related 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 production 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-
108
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 depending 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 technology 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 scenarios.
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 spreadsheet.
Calculation spreadsheet
This spreadsheet shows the intermediate results from the reference/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 services 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 energy service and sector on the right-hand side.
The lower part, from row 38 to row 65, summarises the distribution of electricity and heat production from condensation, combined heat and power and
separate district heat and, thus, can provide a CM value for the distribution
109
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 energy end product, e.g. ethanol, hydrogen from electrolysis or CO2 capture.
The estimates are taken from the Danish Energy Authority’s technology catalogue 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.
110
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