Pure and simple

Dan Frederiksen presents his one, simple recommendation for Africa to promote the deployment of their existing low-emission technologies.

On February 22, 2010, the Ambassador of Denmark, Dan Frederikson, took the stand at the Africa Investor CEO Forum on Infrastructure, Energy and Clean Technology Projects and Awards ceremony in Cape Town, South Africa, and presented his opinions on the potentials of low-emission technologies. Not only that, but he outlined one, simple recommendation for Africa to promote the deployment of their existing low-emission technologies with advice from the Copenhagen Climate Change Conference.

“First of all, I wish to assure you that I am very pleased to be part of this panel and to speak to this important audience about two issues that affect us all, namely energy and climate change,” began Frederiksen. He then went on to highlight the importance of the COP15 Climate Change Conference in Copenhagen in December of last year. “In Copenhagen, it is paramount that the world leaders come together and agree on an ambitious new agreement.”

“Denmark faced a severe energy crisis in the first part of the 1970s, which made us radically change our energy policies. It’s those two events – the COP15 and Denmark’s energy experience during the last three decades – that inform my speech.” Indeed, it was under the request of the organisers of Africa Investor that Frederiksen give one, simple recommendation for the continent to ensure the deployment of existing low-emission technologies.

“This has not been an easy task,” admits Frederiksen. “Coming up with only one recommendation to a series of complex issues which are keeping heads of states, science, industries and civil society very busy these years. Furthermore, this one recommendation would have to be suitable for the entire continent of Africa, with its 53 different countries and enormous diversity. Before I reveal my recommendation, I would like to take this opportunity to present some of the key aspects related to the issues of energy and climate change.

“First of all, why is the deployment of existing low-emission technologies so important? Well, it can no longer be questioned that our almost uniform dependence on fossil fuel is the main culprit to climate change. The signs of climate change are everywhere around us – from melting glaciers to heavy floods and hurricanes – and draught and fires as South Africa is experiencing. All scientific prognoses show that Africa is the continent that will be hit the hardest. In other words, the message from science is clear: We have to act now and we have to act with ambition.

“Secondly, low-emission technologies assist in diversifying energy supply, thereby providing a more stable and secure supply of energy for the benefit of our economies. Think back for a moment at the energy crisis in South Africa early last year. Had South Africa had a couple of wind farms or other renewable sources, maintenance of coal fired power stations and wet coal would not have been such a large problem. But by relying on coal for almost the entire energy production, South Africa ended up losing almost two percent GDP growth in the first quarter of 2008.

At the COP15 in Copenhagen in December, representatives from countries worldwide met to reach an agreement on ways to address the challenges of climate change. Of interest to Denmark, and specifically to Frederiksen, was that more economically developed countries took a leading role in committing to serious reductions in CO2 emissions. In addition, the agreement in Copenhagen also intended to enable emerging countries, such as those in Africa, to both form a cleaner path towards prosperity and afford them an ability to adapt to and mitigate the consequences of climate change. “The aim is to lay the foundation for a new beginning in Copenhagen; a new beginning towards a low carbon economy,” as Frederiksen puts it.

“There is no doubt that finance is key in reaching an agreement. Denmark is already assisting poor countries to cope with climate change and we are committed to do more. The Danish government has recently launched the recommendations of its ‘Africa Commission’ – and two of the five international initiatives arising from this commission are: Access to sustainable energy as well as commitment to African entrepreneurship and access to finance for small and medium-sized enterprises. These areas are strongly interlinked.”

“I would now like to present to you the main features of the Danish energy experience over the past three decades. Denmark has transformed from being 99 percent dependent on foreign energy sources such as imported oil and coal in 1970 to becoming a net exporter of natural gas, oil and electricity today. We have the largest portfolio of wind projects integrated into the power grid. Now around 20 percent of Denmark’s electricity supply comes from wind power.

“There is a commercial side to this story, as Danish companies are now among the leaders in the field of wind technology employing almost 30,000 people. The wind industry takes home more than six and a half percent of Denmark’s total export income. Similar to countries such as Germany, we have also made significant gains in the field of energy efficiency. Consider this: Energy consumption in Denmark has grown only four percent from 1980 to 2004, even though the economy grew more than 64 percent in fixed prices in the same period of time. This is proving that green growth is possible.

These accomplishments have not been obtained without major changes in the legislative framework, which, of course, have hurt some players and benefited others. Some of the most important steps have been: Opening up the market for Independent Power Producers (IPPs); 60 percent of all wind energy in Denmark is produced by windmills owned by individuals or small cooperatives. Ownership is not by big multinationals, or by the state – but by people like you and I. Secondly, a feed-in tariff requiring utilities to buy all power produced from renewable energy technologies at a rate equal to 70 to 85 percent of the consumer retail price of electricity.

“In addition to this, open and guaranteed access to the grid where Transmission System Operators – normally the old state monopolies – are required to finance, construct, interconnect, and operate the transformer stations and transmission and distribution infrastructure for renewable energy technologies has been pivotal. Finally, a general carbon tax on all forms of energy, adding additional income for renewable energy generators has produced a significant change.

“In other words, the ‘Danish Model’ is an example of the private and public sector working together, promoting change for the common good and in the process not only producing green energy, but also making money for the state coffers and empowering ordinary people while tearing down monopolies. How many more plus-words can you ask for?”

On the subject of plus-words, Frederiksen then returned to his brief on the one recommendation to African countries. “Some of you may have guessed it already: My one recommendation for Africa to promote deployment of existing low-emission technologies is: Change the legislative framework governing the energy sector: The key words are decentralisation and diversification.

“Decentralisation of the production of energy, which will allow Independent Power Producers – often owned by individuals or small cooperatives - to become players at a level playing field with the old monopolies. Diversification implies promoting renewable sources such as solar and wind energy to be introduced. Thereby not only going green, but also providing for supply security and having back-up systems when one source of energy supply for one reason or the other is in trouble.

“However, for this to happen measures such as feed-in tariffs, access to the grid and the introduction of a carbon tax on energy or another subsidising mechanism in the transition phase are needed. It takes political will and determination by all. Governments have to come to the party to secure legislative changes, but businesses also have to contribute with know-how, project organisation, willingness to finance in a non-mature marked etc. And ordinary citizens have to pay the bills – as always – including a start-up premium. But once you get started the experience at hand shows that there is no trade off between growth and going green. You can do both at the same time.”

With the Desertec Concept entering the field of play in Africa, and renewable energy conjuring up more interest year upon year, Frederiksen’s advice is looking like it could one day become part of a bigger blueprint for African renewable energy. The proof, as they say, is in the pudding.

Dan Frederiksen is the Ambassador for Denmark in South Africa. He graduated with an MSc in Political Science in 1982 from the University of Aarhaus in Denmark.