Christian Oliver writes an excellent analysis in the Financial Times about the lessons China is learning from Denmark about addressing urban air pollution. There are lessons for more than China.
The urban environment: Clean-up time
Before China’s leaders declared their “war on pollution” in March, they had already recruited help from abroad. The northern city of Anshan, capital of China’s iron and steel industry, had been chosen as an early battleground in the campaign against poisonous air. But the Chinese lacked the knowledge to clean up a city of 3.5m people, choked by sulphur dioxide.
For answers, they headed to a nation that has slashed energy consumption and hazardous emissions while still growing economically: Denmark.
For a country of 5.6m people, the tide of interest from the communist hierarchy of a superpower with more than 200 times its population has been overwhelming. Copenhagen’s 40 per cent reduction in carbon emissions since 1990 has turned it into a green showcase for Chinese delegations. Somewhat dazed, officials from the Danish capital say they now receive inquisitive groups from Chinese municipalities virtually every week.
The Chinese signed a contract with Danfoss, a local engineering company, to help Anshan kick its debilitating coal habit during a visit to Copenhagen by President Hu Jintao in June 2012.
Danfoss was chosen because of its expertise in a field where the Danes are world leaders: improving the efficiency of massive urban heating networks. Once seen as dreary manufacturers of thermostats and valves, Denmark’s heating companies are now at the vanguard of a major strategic and environmental trend worldwide.
The technology, known as district heating, takes heat that would otherwise be wasted from power stations or factories and uses it to warm water. The process has been used in Denmark for decades but is now gaining global attention. “We never thought that one day we would have a showcase city,” says Niels Christiansen, Danfoss’s chief executive. “It wasn’t orchestrated, it just happened. We pressed ahead with district heating and now have the most modern solutions.”
As leading economies seek to rein in energy costs and emissions, they are discovering the haemorrhaging cost of inefficient heating. According to the UN, 70 per cent of all energy is burnt in cities, where half of it is used in heating and cooling networks. That is why cities from London to Darkhan in Mongolia are suddenly looking to Copenhagen as their model of efficiency.
Anshan has turned into a textbook example of what the “Copenhagen model” is all about. Instead of heating homes and offices with coal-fired boilers, the city will now use waste heat from its central steel factory, harnessing the energy that normally vanishes up the chimneys. By 2015, Anshan should burn 173,000 tonnes less coal each year and Danfoss says it can expand the networks of hot water pipes to reduce yearly coal consumption by 1.2m tonnes.
In terms of China’s overall coal usage — some 4bn tonnes a year — Anshan is a modest start. But Danfoss insists that there is such a concentration of heavy industry in northeastern China that waste fumes can be channelled to heat 70 per cent of the region’s buildings.
In Asia, the focus is squarely on pollution ahead of a climate change summit in Paris next December. In Europe, the belated interest of senior policy makers in their wasteful, leaky heating networks has been triggered by the crisis in Ukraine, which has starkly exposed their dependence on Russian gas.
Danish politicians and businessmen are evangelical in promoting their “4G” heating technologies as a solution. Morten Kabell, one of Copenhagen’s mayors, jokes that he would be “abroad all year” if he accepted every invitation to go and spread the word about “the Copenhagen model”. While coal is still an important part of Denmark’s energy mix, “smart” heating grids increasingly incorporate renewables, geothermal power and waste. The country intends to dispense with fossil fuel heating entirely by 2035.
After years lingering at the bottom of the agenda, the UN in 2014 identified improved heating grids as one of the most effective weapons against climate change. In September, the UN urged mayors to prioritise modern heating networks that would reduce investment in power systems worldwide by 7 per cent by 2030 and save $795bn.
Mr Christiansen says Copenhagen’s obsession with efficient heating was forged in the oil crisis of the 1970s. Denmark was hit so hard that driving was banned on Sundays. The country expanded its investment in district heating, a process little known in many of the world’s biggest economies. Though the basic idea is not new — using energy that would otherwise be wasted to heat water, which is then pumped round city neighbourhoods — its efficiency seems ahead of its time. Copenhagen’s grid, launched in 1925, has grown into the world’s largest and now warms 98 per cent of homes.
“Forty years ago, district energy was seen like a socialist technology and I think that has clearly changed,” says Mr Christiansen.
According to the OECD and International Energy Agency, a regular thermal power plant only makes efficient use of 36 per cent of the fuel fed into it, whereas so-called cogeneration plants (producing electricity and heat together) convert 58 per cent of energy inputs. The latest Scandinavian projects can be 85-90 per cent efficient.
Until recently, district heating was a peculiarly Nordic passion. While 60 per cent of Danish homes are on district heating grids, the figure is only 12-14 per cent in neighbouring Germany. In Britain, where householders are wedded to individual gas boilers, less than 1 per cent are connected to district heating.
District heating is common across the former eastern bloc but the grids are often inefficient, with uninsulated pipes running above ground. Residents sometimes have little control over when the heating comes on and off and have to fling their windows open if their apartments steam up.
Mr Christiansen argues that the most significant change of heart is evident in London, where he has been in discussions with Boris Johnson, the mayor. The city has set a target of expanding district heating networks to 25 per cent of new housing supply by 2025.
Another Danish company, Ramboll, is working on district heating for 10,000 homes in Greenwich. In a mini version of the Anshan project, London also plans to capture waste heat from its underground Tube trains. Europe’s biggest inner city development in Hamburg will also be built around district energy.
To Copenhagen, this growing enthusiasm for more efficient cities is a huge commercial opportunity and Denmark is unabashedly parading its capital as a showcase for the dozens of companies that work in this sector: including Danfoss, Ramboll, Grundfos and Rockwool. “We like Copenhagen being a lab,” says Mr Kabell, the mayor responsible for environmental affairs. Other European countries have companies active in district heating — such as Sweden’s Vattenfall and France’s Dalkia — but Denmark has laid greater stress on creating clusters of national champions.
However, despite the attractions of the Danish model, the companies involved are wary about saying that they stand on the cusp of a global revolution and identify many obstacles to exporting Danish district heating technology around the world.
The most stubborn problems are financing and the disruption of overhauling a city. Jens-Peter Saul, chief executive of Ramboll, says any mayor threatening to dig up roads to lay a district heating network has to be a visionary. “You have to have a system that is supported by a leader who really believes: ‘I am putting something in place for the next generation and not just the next election’. That is indeed a struggle.”
In this respect, Denmark has been fortunate. Since the oil shock, the country’s coalition governments have been unusually united on the need for energy efficiency. The city of Copenhagen guarantees the loans for big green energy projects and the city’s utility company, Hofor, is run as a non-profit organisation — a financial model that is hard to translate internationally.
Even China is problematic, despite its leadership’s declared war on pollution. Anshan has not opened the floodgates to new contracts. Mr Christiansen argues that the economics in Anshan are attractive: a $40m investment will save the city $14m a year in the cost of coal. But while Danfoss has set its sights on a dozen other projects in northern China, progress is slow.
Mr Christiansen says Chinese cities have low creditworthiness and Denmark’s export credit agency, EKF, has been reticent about funding energy efficiency work. “This is a big issue — it is difficult to carry the financing into these projects. There is no doubt in my mind that is one of the reasons it has not taken off more quickly.”
Thomas Bustrup, deputy director of the Confederation of Danish Industry, adds that Danish companies are also wary of exposing sensitive technology to China. “All of the companies are ambivalent,” he says. “They see huge opportunities but they are also frightened. They do see fierce competition.”
Jorgen Abildgaard, executive climate project director in Copenhagen, says it is hard to determine whether visiting Chinese delegations are serious about entering into commercial partnerships with Danish companies.
“Sometimes it is difficult to know whether they are just on a study tour or are really going to go for something,” he says.
American cities have been more interested in studying Copenhagen from a lifestyle perspective, using the city as a model for developing cycling lanes and reviving inner cities. Officials in New York, San Francisco and Vancouver have even referred to an attempted “Copenhagenisation” of North American cities.
Fears are growing that plunging oil prices could kill off interest in energy efficiency. But the Danish executives say they are more sensitive to trends in the coal and gas sectors. Ramboll’s Mr Saul argues that gas prices have decoupled from oil and that falling crude prices are doing little to reassure cities about the long-term heating costs.
The main problem is that the scale of a district heating project always seems too daunting. When he encounters cities that fret about the costs of energy efficiency, Mr Saul suggests they look at the costs of doing nothing.
“You cannot expect that the cost of doing nothing to make a city more sustainable is for free. There is actually a point of no return where the damage is so big that you have to reverse.”
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Policy: Red lights on the way toward green goals
Denmark is no green utopia even though a third of its electricity comes from wind turbines. Bolstered by North Sea oil and gas, fossil fuels still make up three-quarters of the total energy mix.
Affluent Danes each produce an average of 8.3 tonnes of carbon dioxide emissions per year, more than the British and the French, and the same amount as the Poles, whose coal- dependent economy is often slammed by environmentalists.
Copenhagen, where emissions per capita are half the national average, is leading the way. Electricity consumption is kept in check by the highest prices in the EU, with tax making up more than half of the cost. Forty-one per cent of commuting journeys are by bicycle.
But if it is to reach its goal of becoming the world’s first carbon neutral capital by 2025, Copenhagen will need to invest more. More than 100 new wind turbines, mainly offshore, will be installed in the next decade. The city is making a big push to switch power generation to biomass, using wood chips from sustainable forests around the Baltic. It will also expand the use of geothermal energy and waste.
The wood chips are perhaps the most contentious element. Hofor, the city’s utility, sees them as a long-term measure but Morten Kabell, one of the city’s mayors, argues that they should be a stopgap. “Can we think it’s fair to chop down Latvia’s forests to heat the city of Copenhagen?” he says.
Copenhagen has also found that investments in insulation and retrofitting buildings can backfire. Energy consumption can go up after buildings are made more efficient because occupants tend to be freer about turning up radiators. People seem to prefer offices to be 22C these days rather than 20C.
To fight this problem , Hofor has a commonsense solution. If a public building is burning too much energy, a red light warns office managers to turn down the thermostat.
Energy in Demand - Sustainable Energy - Rod Janssen 