Minister: The battle for the climate billions has begun

Date: 16/11/2016

We cannot rest on our laurels and think of ourselves as inevitable winners in the global green competition, says the Minister of Energy, Utilities and Climate Lars Chr. Lilleholt in a debate on Danish energy exports.

By The Minister of Energy, Utilities and Climate, Lars Chr. Lilleholt:

“Almost a year ago, I stood in the middle of a happy crowd at the climate conference COP21 in Paris. The new global climate agreement brought happiness to the diplomats and politicians from almost 200 countries worldwide. The world was suddenly a better place to live in.

The climate received better conditions and the agreement also opened up for economic opportunities for companies that work within the field of energy efficiency and green energy. Such an agreement is of course beneficial for Danish companies, who are world leaders in green energy solutions.

The Danish energy industry’s export is a solid success story. The Danish energy export has increased the past 15 years. At the turn of the millennium, the energy export nearly reached DKK 27 billion, corresponding to 6,5 % of the total Danish export. Last year, Denmark’s export of energy technology exceeded DKK 71 billion and accounted for 11 % of the total Danish export in 2015. It is especially the export of green energy technology that has been growing.

Energy is big business
The energy industry is a solid pillar in Danish export and the industry employs more than 55,000 people in Denmark. The export of energy technology has therefore been a big business success in Denmark for a long time. In addition, Denmark is currently facing a historically good option for more positive export numbers in the energy industry.

The climate agreement from Paris will hopefully accelerate the green transition. The agreement sends a signal to change course and invest in climate-friendly solutions globally. The agreement is also opening up for new investment opportunities in the solutions that Danish companies are good at delivering.

The International Energy Agency has calculated the amount of investments that are needed to implement the national action plans, that constitute each nation state’s contribution to the realisation of the agreement – and the sum of the investments necessary is not small.

In fact, there is to be invested USD 13, 500 billion in energy efficiency and green energy by 2030 to reach the goal of all the nation states’ contributions to fulfil the climate agreement.

Leading position not to be taken for granted
Denmark has led an ambitious climate and energy policy since the oil crisis in the 1970’s. A broad majority in the Parliament has set the direction, while businesses have invested and focused on developing the world’s leading energy solutions. Now we have the opportunity to leverage our joint efforts. But there will be no giveaways.

For the first time since the years of the financial crisis we saw a decline in exports from 2014 to 2015. This is not least due to a reduction in sales of wind turbine technology to the UK and Sweden.

The export figures for 2015 reminds us that we cannot rest on our laurels and think of ourselves as inevitable winners in the global competition. The COP21 Agreement will create more competitors who wants to take Denmark’s place in the lead.

Basically, this is good, as it means that increasingly more countries will invest in the green transition. Such a development is the prerequisite for solving global climate problems. But it also means that we must exercise due diligence to ensure that the Danish energy industry maintains its strong position and exploits the momentum created by COP21.

Therefore, I am very pleased to have started the work on an export strategy for the energy industry in cooperation with the Trade Council in the Ministry of Foreign Affairs, DI Energy and the Danish Energy Association. The Export Strategy will strengthen the Danish energy industry in the global competition.

I have, since the climate agreement was reached last year, been in close dialogue and held a number of export meetings with the energy industry and business community on how we can strengthen the export of Danish energy technology and services.

The supply of the future
Last month (on 15th of September), the government presented Denmark’s first overall supply strategy. In the supply strategy, we prepare the ground for a number of initiatives designed to increase the Danish utilities’ incentives to streamline operations. Such incentives, as well as ongoing efficiency requirements, will increase demand for new innovative solutions in all areas of supply, and hence also contribute positively to the development of new solutions that can be exported to the global market.

It is important to me that we create the right conditions for Danish companies so they can be able to maintain their strong position within energy and water technology in the global market. In further work with the Export Strategy, I will remain in close dialogue with the business organizations and the industry.

As part of the Export Strategy the government allocates around DKK 10 million in its budget proposal for 2017 for an export agreement that will support and promote the export of Danish energy solutions to our key markets. The district heating area will be one of the areas that will be included in the new export agreement.

In the Finance Bill for 2017 10 million DKK is also allocated annually in the period between 2017-2020 to State of Green so that we can continue the good work in creating international visibility for Denmark’s green brand.

So, when I sit in the airplane on my way to COP22 in Marrakech, it is with hope to meet lots of Danish enterprises that are in Morocco to pursue their goal of taking part in the development of a better climate in the world.

But also companies that wants a share of the export opportunities created by the global climate agreement. The market scope is $13,500 billion. And although Danish export companies only get a small portion of the orders, it will boost the green Danish exports.

The battle begins now.”

Source: Altinget / State of Green