Presentation by Stephan Skare Enevoldsen - OECD Focus Group Discussion: Financing models for energy efficiency, 22 October 2020

1. Lessons from
Denmark –
Government measures
to promote EE in
industry
Stephan Skare Enevoldsen,
Special Advisor
Centre for Global Cooperation

2. • Investments that can deliver more services for
the same amount of energy input, or the same
services for even less energy input.
• A source of energy in its own right, enabling
governments to avoid investments in other or
more complex or costly energy sources
The “first fuel” of economic development and low-carbon transition
21 October 2020 Page 2
New Danish Climate Law (Dec 2019) has a binding
target of 70% CO2 emissions reduction in 2030
compared to 1990.
(supported by 8 out of 10 parties in Parliament)

3. Denmark is one of the most energy efficient countries in the world.

4. Decoupling - Economic growth with stable energy consumption
1980 = INDEX 100
Source: Statistics Denmark, the Danish Energy Agency and DANVA
GDP In real terms (+90%)
Gross energy consumption (+4%)
CO2 emissions, adjusted (-40%)
Water consumption (-42%)
0
20
40
60
80
100
120
140
160
180
200
1980 1985 1990 1995 2000 2005 2010 2015
Energy savings and
energy efficiency
gains are critical
success factors

5. The cheapest (and cleanest) energy resource
Energy efficiency
21 October 2020 Page 5
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
1990 '95 00 '05 '10 '15'17
perDKKmillionGDP
Gross energy consumption
Final energy consumption
Main policy
instruments
ENERGY
PLANNING &
CHP
ENERGY TAXES
ENERGY TAX
RELIEF SCHEME
UTILITIES
SAVINGS
SCHEME
BUILDING
STANDARDS
EQUIPMENT
STANDARDS &
LABELS
INFORMATION
FOR END-USERS
SUPPORTING
RESEARCH AND
DEVELOPMENT

6. Combining taxes and subsidies for industries
Voluntary Agreement Scheme
• Voluntary scheme targeted energy-intensive
industry processes
• Participants must implement ISO50001
energy management, map energy use and
assess EE opportunities
• EE-projects with pay-back time
5 years or less must be implemented
• In return, participants receive a refund of
energy taxes paid
• Especially relevant for large, energy
intensive operations, where tax relief
exceeds costs of energy management and
investments
22 October 2020 Page 6
Novo Nordisk, Denmark’s most valuable
company and a world leader in diabetes
care, joined the scheme and reduced
CO2-emissions by 40 % while sales
increased by 300 %.

7. Cost/benefit of government schemes
21 October 2020 Page 7
15
Cost of EPC scheme for existing buildings is 15 times higher than the value
of the energy savings it provides
Danish building code is designed to be cost-neutral
– includes all cost-effective options
These schemes are highly cost-effective, but they include
mostly ”low-hanging fruits”

8. • Energy efficiency is not a strategic focus area in most industries.
Therefore governmental actions are necessary to initiate energy saving
investments
• EE has a double benefit of improving profit margins and future
competitiveness – there is huge potential in simple, proven, cost-efficient
solutions.
• Private sector investments will increase and reach a higher level through
government incentive schemes (both carrot and stick).
• Government schemes within EE have a great socio-economic benefit.
• EE does not happen by itself – government must push and keep pushing,
decade after decade. The market will eventually drive implementation.
Key lessons from Danish case
21 October 2020 Page 8

9. • Thank you for your
attention!
www.ens.dk/en
Read more at www.ens.dk
Policy Toolkits from 40
years of EE experience at
www.stateofgreen.com