'Energy efficiency capital of the world': Inside a Danish municipality's mission to dramatically slash its energy use

As governments train their eyes on energy efficiency as a means to shore up their energy independence from Russia, BusinessGreen reports from a region in the midst of a major energy conservation drive

The town of Sønderborg in southern Denmark was last week christened as the “energy efficiency capital of the world” by International Energy Agency (IEA) boss Dr Fatih Birol in his opening remarks at a summit of energy ministers dedicated to energy conservation.

It is high praise indeed for a place which counts a population of under 30,000 people. But it is not undeserved. The town, and the municipality of the same name that it sits in, is the home to a host of pioneering energy efficiency technologies and innovations, from a carbon neutral manufacturing plant, supermarkets whose heat waste is piped to nearby homes, to the world’s longest range electric passenger ferry.

That is because for more a decade, energy saving and decarbonisation has been factored into all the region’s planning decisions. The municipality, which is home to roughly 75,000 residents, was among the earliest adopters of a climate target, pledging to achieve carbon neutrality way back in 2007 – long before climate targets were fashionable, and well before Paris Agreement triggered a deluge of net zero goals from governments and companies around the world.

With just seven years to go until its 2029 deadline for achieving carbon neutrality, the municipality claims it is on track to achieve its goal. Project Zero, the public-private partnership coordinating the decarbonisation push, claims to have delivered a 52 per cent reduction in emissions from local buildings, industry, and transport across the municipality since 2007, with overall energy consumption slashed by 17 per cent.

Energy efficiency has been at the heart of the project’s success so far and was a priority for Project Zero when it drew up its decarbonisation master plan for the region, the group’s CEO and chairman Peter Rathje told reporters on a walking tour of Sønderborg last week. “Good practice is to start with the low hanging fruit, and energy efficiency improvement has always been the low hanging fruit,” he explained. “You can ask any this question to any consulting companies, they will confirm efficiency is key, because the energy you don’t use, you don’t need to produce.”

There is a sense as you walk around town that the local community is proud of its carbon neutrality target and energy conservation drive. In shop windows, stickers set out levels of emissions reduction achieved by local businesses. In the port, the electric-powered commuter ferry Ellen shuttles passengers and vehicles to the nearby island of Aerø without noise or emissions five times a day. And the Nordic sunshine glints off solar panels installed on the roofs of the many homes and businesses across town seeking to reduce their dependence on wholesale electricity markets.

But the backbone of the town’s decarbonisation success is less visible to the naked eye. Beneath the town’s homes and businesses, sprawling district heating networks shuttle low carbon heat through hot water pipes to and from local homes, businesses, and industry. First installed in response to the last oil crisis in the 1970s as part of Denmark’s push to reduce its dependence on volatile fossil fuel markets, the network has been expanding over the last two decades to help wean the rest of Sønderborg’s building stock off fossil fueled heat . Project Zero claims that Sønderborg’s six non-profit housing associations have completed more than 190 energy renovation projects since 2018 alone, investing some €25m in conversions of buildings from fossil gas to district heating, as well as installations of heat pumps, solar panels, and energy efficiency improvements.

Once dependent on a fossil gas plant for its base load energy supply, the region’s central and largest district heating system is now underpinned by a biogas plant which burns agricultural residues from local farms to heat up water. But the integrated energy network draws from an available and large pool of low carbon heat sources, with a growing number of businesses – including a major electronics manufacturing plant owned by Danfoss, supermarkets, and various data centers and brick companies – now selling surplus heat generated from their heat pumps and industrial processes back into the heating grid.

“Our plan is that up to 40 per cent of the heat production needed in Sønderborg will [eventually] come from excess heat in the area,” Allan Pilgaard-Jensen, chief operating officer of Project Zero, told BusinessGreen. “For this, you need to have an extended distribution network so you can utilise excess heat, whether it is in the summer or winter time. Of course, in the summer time you have less heat consumption.”

The plan is to fold as many of the smaller heat network islands as possible into the master network in order to ensure the excess heat tapped from industry can be spread widely, he said. “In order to distribute excess heat from different sources you need to have an extended network where you can really distribute it over long distances,” he explained.

Pilgaard-Jensen said The biggest challenge for Project Zero over the coming years will be decarbonising transport. “There’s quite some emissions [generated] in transport still,” he said. “We have to both focus on individual personal transport – converting people to electric cars – and also minimising use of transport as much as possible… We are also focused on heavy duty transport, and agricultural machinery, which are a challenge because they have high energy requirements.”

Project Zero carves different focus areas into “hotpots”, he said, each of which have an “owner”, a project manager, a working group, a dedicated emissions reduction plan, and key performance indicators (KPIs). “We have so many local stakeholders in general in the project,” he explained. “All stakeholders around the energy system are involved. and it’s important for us they are engaged in this project.”

Local engagement has been absolutely critical to the success of the project, alongside having a clear-cut, cost-effective plan, Pilgaard-Jensen said. “Make a CO2 baseline, make sure you know exactly where you have your emissions, and then make a plan to reduce them,” he advised. “Then you need an organization that is responsible for local engagement and making sure all stakeholders are involved.”

While the various projects involved in decarbonising the municipality have been funded to some extent by local businesses, third-party investment from a mix of public and private funders has been pivotal to the project’s success. To reach its aims, Sønderborg has clinched funding from Denmark, the EU, various pots of climate funding, as well as the charitable arm of Danish manufacturing giant Danfoss, which is headquartered in Sønderborg.

This third-party funding has been important to set up the governance structures that oversee the vision and orchestrate the push, Pilgaard-Jensen said. “Having the combination of the public funding and the funding from the Danfoss Foundation has been very important because you need to have a project management office that can drive this process,” he observed.

Indeed, Danfoss has been heavily involved in the project. Not only has it provided crucial funding through its charitable foundation, but it has also delivered major energy efficiency gains at its 250,000-meter flagship campus in Sønderborg, which is the site of a factory that produces components for off-road vehicles and tractors.

“As the biggest industrial company in the area, we are fully blown into Project Zero, and the ambitions around Project Zero,” Torben Christensen, head of Danfoss Power Solutions global services, told reporters last week.

He explained that the company has reduced its energy consumption at the Sønderborg plant by 70 per cent since 2007, in a large part by introducing a new ventilation system which recovers heat from industrial processes and data centers and recycles it back into the factory for heat. The rest of the factory’s heat needs are supplied by Sønderborg’s low carbon district heating network, or from reusing cooling water that would previously have been blown out of the factory in cooling towers, he said. Additional heat is then reintroduced into the factory’s systems with four industrial scale electric heat pumps. The factory’s electricity, meanwhile, is fully decarbonised, secured through a power purchase agreement (PPA) with an offshore wind generator and an onsite solar plant.

“About seven or eight years ago, we were 100 per cent dependent on natural gas,” Christensen said. “And today, nothing.”

A cynic might point out that it is in Danfoss’ interest to be a major backer of the scheme, as a maker of components that enable energy efficiency and decarbonisation, such as electric drive trains and heat pumps. But Danfoss CEO Kim Fausing stressed to BusinessGreen that it remains in all companies interests to embrace energy efficiency. “Energy efficiency is something that made us more profitable, because we’re not spending as much on energy as we used to,” he said.

The company, which runs more than 100 factories around the world, claims it has increased its profits by 127 per cent between 2007 and 2021, while only increasing its energy consumption by 11 per cent, after implementing more than 200 technical energy efficiency projects in nearly three dozen plants.

Fausing said he “strongly encouraged” other firms to make energy efficiency action “priority number one”. “It’s very straightforward,” he said. “Of course, we all have different energy footprints, so the solutions can be different from company to company. But the fact is, there is huge potential and it is a very short payback time. For the decarbonisation we have been doing, most projects had a payback time of less than three years.”

As 2029 approaches, the clock is ticking for Sønderborg to meet its goal and reduce its remaining emissions to meet is carbon neutrality target.

In opening remarks to the IEA conference, Denmark’s energy minister Dan Jørgenson said he was confident the municipality would reach its goals. “Sønderborg is a very ambitious city when it comes to fighting climate change,” he said. “They have decided to become carbon neutral by 2029, and I’m confident they will deliver on this project. The people of Sønderborg are a proud people, and they have been so for hundreds and hundreds of years… This is Viking country.”

But the town has already achieved a major success, as an example of what decarbonisation looks like in practice, and how energy efficiency can reduce overheads and divorce citizens and businesses’ heating needs from volatile fossil fuel markets. Last week’s IEA conference, which was attended by Birol, Jørgenson, and more than 30 energy ministers around the world, culminated in a ‘Sønderborg Action Plan’, a global energy efficiency package designed to help ensure energy efficiency gets the policymaker and investor attention it deserves.

It remains to be seen whether ministers will meet the promises they made in Sønderborg, but it is incontestable that the Danish municipality and town demonstrates what can be done. It is possible to respond to a global energy crisis with investment in technologies that not only cut emissions, but also reduce energy costs. And with pressure mounting on cities, businesses, and governments arrond the world to respond to soaring energy bills, it is clear the region provides a template that many others could learn from.


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