1. Energy Efficiency – The First Fuel The Danish Experience Jiangsu - May 21st 2015 Counsellor Christian van Maarschalkerweerd – Embassy of Denmark

2. Why is Energy Efficiency Important? Reducing pollution Reducing cost Supply security and trade balance Improving competitiveness

3. How can Energy Efficiency be Improved at Company Level Management Design and System Optimisation Technology

4. From Excess Heat To a Valuable Resource Anshan VISION A transmission line utilizing surplus heat from a local steel plant, CHP and geo- thermal sources Anshan government target: 2000 MW surplus heat used to cover heating area (~ 60-65%) Existing coal boilers for peak load only Pooled networks – most efficient heat sources can cover for inefficient ones Many buildings heat domestic hot water with district heating Anshan TODAY  Anshan City: Population of 1.8 Mio  Heating area: 53 m 2  Savings potential:  Coal annual: 678.000 tons  CO2 emissions: 1.380.000 tons  Approx. 60-90% savings of coal and CO2 emission compared to today

5. The Role of Government and Regulation Creating right incentives to cost effective energy consumption reductions Main policy instruments ENERGY PLANNING & CHP ENERGY TAXES ENERGY TAX RELIEF SCHEME UTILITIES SAVINGS SCHEME EQUIPMENT STANDARDS & LABELS

6. Energy Taxes – an Efficient Incentive Taxes on energy increase the value of energy savings and the incentive for energy efficiency Energy prices do not reflect the long-term costs of pollution and CO 2 - emissions: Energy taxes may compensate for this Energy taxes create revenue for the treasury Energy taxes may also ease the acceptance of more stringent energy efficiency regulation But risk of leakage! Distinguish between companies that compete on national and international markets

7. Voluntary Agreements Voluntary scheme Participants must implement ISO50001 energy management EE-projects with pay-back time 4 years or less must be implemented In return, participants receive an energy tax relief Relevant for large, energy intensive operations, where tax relief exceeds costs of energy management and investments

8. Energy Utilities Obligation Scheme All energy utilities must make customers save a certain amount each year Each utility can choose customer types, technologies and incentive types as it prefers Typical incentives are free advice and a (limited) investment subsidy Savings must be additional and well-documented Costs are covered by a small, standard levy on all customers’ energy bill Obligation Result

9. A Utility Helps Industry Save Energy The Danish utility Dong Energy has provided Energy Management assistance to the Danish Biotech company Novozymes Results: 64 energy saving projects in 6 years Electricity savings corresponding to 230 mio. RMB

10. Renewable Energy in Industrial Processes Investment Subsidy Scheme (DK) The subsidy scheme supports: Replacement of fossil fuels with renewable energy - wind, solar, biogas and biomass to power manufacturing processes Replacement of fossil fuels by district heating Investments in energy efficiency (in connection to conversion projects)

11. Result: A “Green Growth” Track Record GHG emissions, -28 % Energy consumption per GDP-unit is lower than in any other EU-country. Gross Energy Consumption, -4 % GDP, fixed prices, +38 %

12. Key Lessons From the Danish Case EE turns into profit. Poor EE is a waste of money EE is not rocket science – there is huge potential in simple, proven, cost-efficient solutions EE does not happen by itself – government must push and keep pushing, decade after decade Do tax and regulate – but make sure you get stakeholders on board Make market forces serve rather than dictate your objectives Long termed plans, strong political commitment and ongoing dialog with key stakeholders

13. Want To Know More? stateofgreen.com/cn Policy toolkits on Energy Efficiency Sharing 40 years of experience Download for free: www.ens.dk/en/policy/Global-cooperation/information- materials/general-information-policies-tools/publications-reports-paperswww.ens.dk/en/policy/Global-cooperation/information- materials/general-information-policies-tools/publications-reports-papers State of Green: 10 sectors Case examples Policies Products Cities Weekly newsletter Danish Energy Agency: