Wind and solar power and other "new" renewable energy sources provide Denmark with more electricity, on a percentage basis, than any other country. This accomplishment can be attributed in large part to the work of Hans Jǿrgen Koch. For more than 30 years, Koch has worked in the Danish Energy Ministry where he now serves as deputy permanent secretary of state in the Ministry of Climate and Energy. He left the ministry in 1994 to spend eight years at the helm of the International Energy Agency, where he helped found the IEA's Renewable Energy Unit.
BB: What factors enabled Denmark to increase its renewable energy share to 17 percent of total energy? br>
HJK: A carefully designed, long-term, stable energy policy based on broad support in the parliament and in the general public. A policy that has created ownership for the most important actors among utilities, manufacturers, and consumers. A policy containing a solid mixture of economic, tax, and regulatory incentives in favor of wind, biomass, and other renewable energy sources. A combination of liberalized Nordic electricity markets allowing for international trade, flexible support schemes, and a carefully designed national planning of markets for combined heat and power and district heating. And a careful monitoring and adaptation of support schemes in order to give incentives to continued increased competitiveness of the renewable technologies.
Could Danish policies be replicated in other countries? If so, what lessons should other countries heed from Denmark's example?
In principle, all of the above mentioned most important factors [could be applied elsewhere]. However, in some countries tax policies are probably politically non applicable.... It is important to create long-term investor confidence in the stability of the support schemes for research, development, demonstration, and deployment of a broad variety of renewable energy technologies.
What technology and financing policy lessons would you borrow from your experiences in Denmark and bring to IRENA?
My experience has been that it is important to look at the individual preconditions in countries and regions in order to determine which kind of support measures will be most effective.... Furthermore, it is necessary to monitor closely the development [of renewable energy] over time in order to scrutinize regularly whether the existing support measures are working in an optimal way. It is certainly not a question of just pouring more and more money at manufacturers. It is also a question of maintaining the incentive for manufacturers, for producers, for customers, to make renewable energy continuously more competitive and self-sustaining in competition with traditional sources.
Some say IRENA is unnecessary because of advances the International Energy Agency has made, very much under your leadership, to encourage renewable energy development. How do you envision the relationship between the IEA and IRENA?
The IEA is an indispensable intergovernmental organization, not only for emergency preparedness but also for producing neutral, unbiased analysis in all areas of energy policy and technology. IEA has a solid track record for world-class analysis. But the problem for IEA is that renewable energy, in the IEA regular budget is only 2 percent. That 2 percent corresponds to $500,000 per year. It is a very limited amount of money...
The work IEA is doing on renewable energy is in general first-class. However, the amount of money allocated to renewable energy is far, far too small to really make substantial progress with the tasks we are facing.
Another reason why the IEA by nature is insufficient is that IEA is not a truly global organization. It is a precondition for a government to be a member of IEA, that the country is a member of the OECD [Organisation for Economic Co-operation and Development]. Nobody expects in the foreseeable future to seat countries like Russia, India, China, Brazil, Indonesia as members of OECD. There are therefore huge parts of the world with huge ambitions for increased utilization of renewable energy, which will be more or less out of reach for the IEA.
Why is it so "impossible" to expand the IEA budget for renewable energy?
There's no reason to believe that, when for 25 years in a row the IEA has not been willing to increase its total budget in real terms, it will be willing to do that in the foreseeable future.... IEA also has to cover, for instance, emergency preparedness, oil, coal, gas, electricity, and energy efficiency. It is very difficult to move parts of the budget to renewable energy without coming below a critical mass in other areas where the agency also wants to be active.
Should IRENA promote specific renewable energy policies?
It is probably necessary to have a broad variety of policies. What is useful in one country or region might not be useful in other countries or regions. That means that an important part of the work on IRENA will be to disseminate information about success stories, to [present] stories on what works under certain conditions and also what does not work under certain conditions.
Under what conditions, and to what extent, should renewable energy be subsidized?
It is still necessary to some extent to subsidize renewable energy. There are a number of good reasons for this. One reason is that there are still lots of subsidies for fossil fuels around the world. Another reason is that the market forces do not respond sufficiently to the environmental and climate-related economic benefits of renewable energy. A third reason is the economic benefit of investing in technologies for indigenous, renewable energy supply instead of [transfering] huge amounts of funds to fuel-exporting countries.... For many developing countries, the increase in fossil fuel prices [has] cost...more than the development assistance they have received. A fourth and very obvious reason to subsidize some renewable energy technologies is that some of the technologies still are at very early stages and therefore need support in the same way as, for instance, nuclear and gas turbines got in early stages of their development.
Should IRENA assist in the development of cross-boundary renewable energy projects? If so, how?
First of all, it should be up to the individual member countries to decide what kind of advice, if any, they want to receive from IRENA. But for some sources of renewable energy, for instance hydro and wind, cross-boundary energy projects would be very useful. The renewable resources are not always there where you need the energy the most. And, for instance, wind energy and hydro energy can complement each other in a very effective way.... Denmark has no hydropower, yet it is very well complemented by hydropower in Norway. When wind is not blowing in Denmark, we can trade with Norway.
How should IRENA address controversial sources of energy such as biofuels? Do you consider biofuels to be "renewable?"
Biofuels are renewables. They seem to some extent to be considered as controversial. However, I am convinced, based on experiences in Brazil and many other countries, that there is a huge potential for biofuels that can be utilized under high sustainability requirements. I am convinced that there is a large scope for biofuels being produced without problems for food supply and without leading to negative effects on the environment, in relation to rainforests. Brazil in general is a good example [of the] huge potential for how biofuels can be used in a 100-percent sustainable and respectable way.
As he mentions, combined heat & power has been absolutely critical in Denmark. Indeed, it's responsible for about half of the country's electricity. The U.S. rate, by contrast, languishes in the single digits. We should be doing far more of this across the pond.
Full disclosure: I'm associated with Recycled Energy Development, which does CHP and waste energy recovery. So I'm not unbiased on this. But the reason I'm involved is the sheer potential: government estimates suggest CHP and waste energy recovery could slash U.S. greenhouse gas emissions by 20%. That's as much as if we removed every passenger vehicle from the road. Meanwhile, costs would fall due to increased efficiency.