In October 2010, Denmark became the first country to embrace the goal of renouncing fossil fuels by 2050. Based on Denmark’s analysis, other developed nations may be closer than they think to a fossil-free future.
A commission established by the Danish government to analyze energy and transport systems has found that the Danish energy system (including transport) can be completely independent of fossil fuels by 2050 without using nuclear energy. While the report’s recommendations are specific to the current Danish situation, the approach used in the analysis can be useful to other nations seeking similar frameworks.
The country is looking to increase its use of renewable energy sources to 100% by 2050, compared to 18% today. While new renewable energy infrastructure and the rising price of energy – no matter what form – is costly, model calculations show that the transition away from present fossil fuel energy would ultimately cost <1% of gross domestic product.
Wind and biomass are likely to be major contributors to the Danish energy system in 2050. The role of other energy sources – solar, geothermal, and wave – will depend on their development to the point of commercial viability. Another important factor is that this energy production is largely based on fluctuating sources, therefore flexibility on the demand side in the form of smart grid, for instance, will be necessary.
The report highlighted the importance of using economic instruments to support this transformation. One of the commission’s most important recommendations is that the government should establish long-term framework conditions, including a gradually applied tax on fossil fuels will reduce consumption. This would provide a disincentive to invest in new fossil fuel infrastructure and, at the same time, encourage energy efficiency improvements.
Initially, it may seem surprising that total phase out of the use of oil, gas, and coal will not involve large costs for society in the long term. However, there are several reasons for this conclusion: First, the transition of the energy system will take place gradually over a long period of time, so that existing infrastructure will be exploited. Second, over this time period, an increased global demand for energy will make the alternative to renewable energy still more expensive. At the same time, technological development will gradually make many renewable energy sources more competitive and emission reduction targets will have a cost if Denmark continues to use fossil fuels. Finally, although the total expenditure on energy services increases by approximately 5 percent due to the transition to fossil fuel independence, the cost measured as a percentage of GDP decreases in significance.
Authors – Katherine Richardson, Dorthe Dahl-Jensen, Jørgen Elmeskov, Cathrine Hagem, Jørgen Henningsen, John Korstgård, Niels Buus Kristensen, Poul Erik Morthorst, Jørgen E. Olesen, Mette Wier, Marianne Nielsen, Kenneth Karlsson.