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Market forces key to cheaper green energy, experts say
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March 8th, 2012
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Denmark’s entry into a Scandinavian partnership could lower the cost of transitioning to renewable energy
The government’s plan to fuel Denmark completely by green energy by 2050 may have a positive affect on the environment, but economists from major energy industry watchdogs such as the OECD, the International Energy Agency (IEA) and parliament’s economic advisory panel Det Økonomiske Råd believe that cost of doing so is unecessarily high, reports Berlingske newspaper.
They argued that if the state-support for new renewable energy sources was more market-based and took a more impartial approach towards the different technologies, the government could get the same amount of energy from various natural resources for less money.
Meanwhile, Norway and Sweden have agreed to work together on expanding their use of renewable energy, and think-tank Concito says Denmark should get in on the deal.
“The collaboration means that Norway and Sweden have a shared goal for the development of renewable energy,” Concito chief economist Francis Clemmensen told Berlingske. “That means that the best technology will win and that hydropower plants, wind turbines and biomass power plants will be built where it is cheapest, regardless of whether it is in Sweden or Norway.”
Rasmussen added that the Nordic power market NordPool Spot already results in a lower price for consumers. According to the Nordic Council, allowing producers to sell power in Denmark, Norway, Sweden, Finland and Estonia saves the average family around 1,500 kroner a year on their energy bill.
Concito is now studying what the effects would be if Denmark joined a Scandinavian co-operation with Norway and Sweden on green energy, a study the climate and energy minister, Martin Lidegaard (Radikale) told Berlingske he would “follow with interest”.
The head of the energy industry association Dansk Energi, Lars Aagaard, said that the nation’s political parties would likely resist collaborating with neighbouring countries.
“When the market decides which technologies win, politicians lose influence on the choices and I’m not sure that the Danish parties are ready for that,” Aagaard told Berlingske.
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