Top Ten Reasons Why Denmark is a Cleantech Leader

For the past 40 years, Denmark has been synonymous with world-class green high-tech solutions. It began with wind technology as a solution to the 1970s oil crisis, but since then the Danish cleantech sector has evolved and now offers technologies within all types of sustainable energy, climate-friendly solutions and energy saving products to individuals as well as to businesses. And it is a first-mover market for many cleantech sectors for foreign companies. Many countries have devised strategies for future clean energy and green economy glory but few have created as concrete and tangible plans as Denmark.

1) Denmark’s goal of becoming fossil-free country in 2050. Since 1980 Denmark has increased its GDP by 80% while keeping its gross energy consumption stable and reducing carbon emissions. But now Denmark is ready to jump to the next generation of clean energy economy. Thus the government of Denmark has unveiled its ‘Energy Strategy 2050’, which calls for the country to be completely independent from fossil fuels by 2050. According to a government release, Denmark is aiming to reduce its use of fossil fuels in the energy sector by 33% by 2020 compared to 2009. The strategy calls for a significant increase in renewable energy obtained from wind, biomass and biogas which over the next decade will increase the share of renewables to 33 percent of energy consumption. The initiative also calls for the wind power production capacity to double to 42% by 2020 where around 62% of electricity generation will come from renewable energy sources.

2) World leading exporter of energy technology. Danish exports of energy technology and equipment have more than tripled since 1989. This is due not least to early demand and ef¬forts within research, development and test¬ing of new energy technologies. Green energy technologies today hold a prominent position in total Danish exports of goods and two-thirds of green energy technologies come from the wind turbine sector. For more than a decade Denmark has topped the EU list of exporters of energy technologies and equipment.

3) First-mover market for EVs. Denmark’s pursuit and investments into EVs and the needed infrastructure will lead to one of the first-mover markets in the world. This is due to the unique situation of having a well-developed grid infrastructure, a very high share of wind power into the grid and the largest market for electrical energy in the world. Denmark aims to be the global leader in developing a national electric vehicle charging network that uses the cars’ batteries as a storage reservoir to balance the intermittency of wind. For example, Renault, Citrôen, Nissan, Peugeot, Mitsubishi, Volvo and Daimler have all announced imports of EVs to Denmark. Together with its partner Renault, Better Place have just opened Europe’s first Better Place center in Copenhagen.

4) A prototype for European Smart Grids. While many other countries are talking about smart grids as a future focus area, Denmark has for the last 20 years had to cope with handling a large share of renewable energy input to the energy system. Denmark is now on the forefront of having a state-of-the-art electrical grid system that is a) connected to the surrounding countries, b) in the global top 2 regarding highest security of supply, and c) the world’s highest percentage of renewable input to the electrical grid from distributed generation. Having the upstream electrical grid up-to-date enables project initiatives around downstream smart grid solutions to have much more concrete value in a Danish context. For foreign smart grid companies Denmark is a playground for R&D and test- and development before the larger markets are ready in the future. (see world’s largest intelligent grid tested in Denmark).

5) Large Cleantech Cluster. Denmark is home to the Copenhagen Cleantech Cluster, one of the largest cleantech clusters around the globe. Today, CCC counts more than 200 members, all engaged in a wide range of cleantech related activities ranging from Smart Grids, recycling of waste to sustainable urban development. CCC serves as the unifying umbrella for all the members and provides them with services within networks, events, knowledge-sharing activities among many other activities. CCC works to create increased growth in the Danish cleantech industry, attract and assist more foreign companies and talent and improve the business conditions of cleantech companies.

6) Large Number of Cleantech Businesses. There are a large number of cleantech businesses that reside in this country – from the largest global players to small startups with global reach. You can find large industrial conglomerates Siemens and IBM, smart grid companies Powersense, Green Wave Reality and Gridmanager, global water group DHI Group, biofuel companies Inbicon and Biogasol, and recent Cleantech Open category winner Abeo. An increasing number of foreign cleantech companies choose to establish a business entity or form partnerships in Denmark. Recently, the US-based EV manufacturer Tesla and smart grid company Spirae Inc. Established their presence in Denmark.

7) From pioneers in wind energy to a global hub for cleantech. Anyone who visits Denmark cannot miss the numerous windmills speckled throughout the country, providing electricity needs to numerous communities and farmers. For many, windmills have become the unofficial national symbol. Denmark uses wind energy to provide a majority of renewable energy. Currently, wind provides 20 percent of electricity needs in Denmark – the highest worldwide. By the end of 2009, the 5,000 windmills provided adequate electricity needs for more than one million households and the goal is to reach 50% wind power of the total electricity production in 2025. Denmark is home to many of the global premier wind power companies. Vestas, Siemens Wind Power, Gamesa, Suzlon, and many other wind turbine manufacturers have R&D offices. An interesting fact is that Danish companies account for 90% of the European market for offshore wind – a market projected to amount to DKK 75 billion per year until 2020 (source The Danish Wind Industry Association). In April 2012 the EWEA conference will be held in Copenhagen.

8 ) Access to Funding for Renewable Energy Research, Development and Commercialization. Denmark provides a number of opportunities to assist businesses in getting the necessary funding for research and development projects. Energinet.dk offers funding for energy research and development projects that assist in developing renewable power production. The Danish Energy Agency offers the EUDP program, which provides funding for the development and demonstration of new innovative energy technology. The Danish National Advanced Technology Foundation offers private companies and universities with the funds to develop and commercialize new technology.

9) Biomass and biofuels. In Denmark, biomass currently accounts for approximately 70% of renewable-energy consumption, mostly in the form of straw, wood and renewable wastes, while biogas accounts for less. Consumption of biomass for energy production more than quadrupled between 1980 and 2005 and further increases are expected in future – primarily for heat supply at district heating plants and in small-scale installations in households, at enterprises and institutions as well as large-scale power plants. Danish companies have developed efficient methods of combustion, gasification, and liquefaction of biomass for biofuels and biogas and have pioneered enzyme technology and other ways to maximize the efficiency of biofuels. Two of the world’s leading manufacturers of enzymes, Novozymes and Danisco Genencor, are located in Copenhagen and are important industry players.

10) Denmark’s 100% Renewable Energy Island. Off the coast of Denmark’s mainland rests the island of Samso, an island that is completely run by renewable sources of energy. These 112 square kilometers of land is just east of the Jutland peninsula and is home to a bit more than 4,000 residents. It is the first island in history to supply 100 percent of all electricity needs from renewable sources of energy, chiefly, the Samso offshore wind plant. Aside from the turbines, the 22 villages on the island are heated using wood chip and straw-run power plants and large solar panels.

Article by Shawn Lesser, Co-founder & Managing Partner of Atlanta-based Watershed Capital Group – an investment bank assisting sustainable fund and companies raise capital, perform acquisitions, and in other strategic financial decisions. He is also a Co-founder of the GCCA Global Cleantech Cluster Association ”The Global Voice of Cleantech”. He writes for various cleantech publications and is known as the David Letterman of Cleantech for his “Top 10″ series. He can be reached at shawn@watershedcapital.com