How Denmark changed the game when it went renewable
Denmark is often held up as a model of societal and economic development; rich, enlightened and regularly in the top three countries in the world with the happiest citizens.
New Zealand could learn much from Denmark. A snapshot of how Denmark went from mediocrity to leader of the pack within the last 50 years provides some interesting lessons.
In the BBC radio programme Global Business, reporter Keith Moore investigated Denmark's success in wind power technology.
Denmark received a wake-up call in October 1973 when the Organisation of Arab Petroleum Exporting Countries implemented an oil embargo.
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In Denmark, as in many oil consuming countries, this resulted in immediate fuel rationing which hit particularly hard and the Danes quickly realised the era of cheap fuel was over.
They did two things, firstly they set up a company, DONG (Danish Oil and Natural Gas) and started exploiting their own hydrocarbon sources, mainly in the Danish sector of the North Sea.
Secondly, determined to reduce their dependence on foreign energy sources they decided to investigate harnessing some of the year round winds that blast the Jutland coast.
Forty five years later they are the world leaders in wind technology. In 2016 42 per cent of the electricity grid in Denmark was supplied by wind power, that is streets ahead of any other country – second is Spain with 20 per cent. The EU average is 12 per cent, the world average is 3.7 per cent and in New Zealand it is a rather lowly 7 per cent.
Wind power in Denmark has delivered much more than energy free from greenhouse gases, but in an interview with reporter Keith Moore, Professor Brian Vad Mathieson of Aalburg University points out, if there wasn't a good business case, wind power in Denmark wouldn't have succeeded.
As it turned out, wind power was a spectacular commercial success. Today, the wind energy business in Denmark employs 30,000 people (this in a population of only 5.7 million) and accounts for 5 per cent of the country's exports.
One of the biggest wind turbine manufacturers in Denmark, Vestas, was manufacturing household appliances in the 1940s; in 1950 they switched to making agricultural machinery.
Then in 1979, faced with surplus capacity, Vestas turned their skills to manufacturing wind turbines. It was an example of the adaptability of Danish companies.
Another company, LM Wind Power started as furniture makers in the 1940s then morphed in the 50s to making boats where they became experts in glass fibre manufacture.
In the '80s they turned their attention to and specialised in making turbine blades.
Today they have 10,000 employees worldwide including 240 dedicated to research and development alone. In 2016 they finished construction of one of the largest turbine blades in the world – it has a diameter of 88.4 metres, that's almost the length of a rugby pitch.
Ninety percent of the world's offshore wind turbines are in the North Sea and 70 per cent of these are shipped from the Danish port of Ebsjerg.
In many parts of the world wind turbines are regarded as unsightly and their presence is met with considerable resistance. The same was true in Denmark, but Professor Vad Mathieson says the key to wind power generation is to make it local.
There is a law in Denmark that requires at least 20 per cent of the shares in any wind farm development to be owned by the local community.
This gives the community a vested interest in the development and provides real cash returns.
When citizens, rather than anonymous corporations, are making money from the wind turbines in their neighbourhood the turbines become objects of pride rather than blots on the landscape.
According to Professor Vad Mathieson, one of the key lessons the Danes have learnt from their experience with wind power is the critical importance of political consensus.
In 2006 the Danish government declared that they were determined to ensure that Denmark reached its goal of 100 per cent renewable energy production by 2050.
This goal was restated in 2016. The effect of this long term government strategy is that it gives business certainty – businesses know where the industry is heading and that encourages investment.
That is the main lesson to be learnt by New Zealand governments.