If India fails to secure energy beyond fossil fuels, the world will fail: Danish climate minister

Lars Aagaard, Denmark's minister for climate change, energy and utilities.

In the coming months, a number of renewable energy (RE) projects in India are going to have some form of collaboration with Denmark, and the European Union (EU) as a whole, so that the country can achieve its target of installing 500 gigawatts (GW) of RE capacity by 2030. It is for this purpose that Denmark’s minister for climate change, energy and utilities Lars Aagaard has come to India.

In an interview with Moneycontrol, Aagaard said Denmark understands India’s stand on “phase down” of coal instead of “phase out” as it stems from the need to provide affordable electricity to over a billion people. He also said India and Denmark are going to partner for offshore wind power, energy efficiency, green hydrogen, expanding the energy market, digitalisation and making the Indian grid more adaptive to renewable energy. Edited excerpts:

As many as seven memoranda of understanding (MOUs) were signed between Danish and Indian companies and institutions for green transition. You also met your Indian counterpart RK Singh. What partnerships are we looking at beyond these MoUs?

The headlines facing me as the climate change and energy minister of Denmark, the headlines facing the EU, the headlines facing India are all the same. So we're looking at how can we expand renewable capacity within our own electricity systems and Denmark is working together within India on that.

We have learnt good and bad lessons. We will give you (India) the good ones and tell you not to do the wrong things so you can meet your RE ambitions quicker. For example, Denmark will help India look into the seabed. Where can offshore wind power be developed in the most cost-effective way? How should you develop your electricity grid so it can enable more renewables on the grid, and how can you run your coal-based power plant flexibly? We are going to help India answer these questions. Beyond these, energy efficiency is also another point of close collaboration as is digitalisation and green hydrogen.

What is unique in the Indian-Danish partnership is that we are actually sending people from my ministry to yours. They're working here in India. I think that is unique. And I believe it is this approach that will bring results. I also hope this becomes a model for other countries too. However, I only worry about one problem—Denmark is a very small country, and if I have to send civil servants to all countries in the world, I would miss some of them back home.

Indian external affairs minister S Jaishankar said the proposed free trade agreement (FTA) between India and the EU will be a “game changer”. What does this hold for Danish energy companies? Are there any specific companies, any specific investment sectors that you think would benefit from the proposed FTA?

In Denmark, there's a huge interest in working closely with India. There are two reasons for this—climate change and commercial interest. If India doesn't succeed in securing energy for your population at an affordable price without using fossil fuels in the future, the world will not succeed. So, due to the global context of the climate change status, my starting point is always an openness to working together with other countries.

When it comes to trade, there definitely is a commercial interest for the Danish energy sector. Tomorrow I will go to Chennai, and in that area, a number of Danish companies are operating—Danfoss, Grundfos and Vestas, to mention a few.
Danish companies employ close to 100,000 people in India, which makes India one of the countries where Danish companies have the most employees abroad. My expectation is that this will grow further. Our starting point is always to see if we can use the country we have friendly relations with for trade, as it is the best way of making sure that capital, technology and competencies flow freely in this world. It is high time that we need more than one production powerhouse in the world now and I hope India could be that other one.

The EU has been a leading voice for “just transition” and as much as the EU, including Denmark, was urging India to phase out coal, India has stood by its stand of phasing down of coal instead. Further, India has said that its reliance on coal for energy purposes is going to continue till at least 2030. What is your view on this?

This is the third time I'm in India. I came here first when I was 18 years old, almost 35 years ago. I travelled for three months, backpacking. I did that a second time towards the end of the 1990s. I have seen poverty in your country. I have the deepest respect for the development that India has undertaken in the last 20 years. Your population has increased, but you have also managed to bring electricity to more than 700 million people. I know what that means for daily life. Access to energy that is affordable is such a fundamental change for every person's life. So I will not be the person to tell India what to do in the short term in this crisis we are in. In the long run, of course, every person on this planet needs to see a way where the use of fossil fuels including coal will go down.

I have looked into the 2030 outlook for the Indian energy system. And the figures are quite clear. For some years now, coal will be dominant and the most cost-effective way for you to produce electricity, but electricity from solar power, the price has come down. So we are looking into a whole new phase, we are going green, and that doesn't mean that you go poor. I think the challenge for all of us is just to find a way to see how we can scale it because time is not on our side.

Denmark was one of the first countries to pledge ‘losses and damages’ climate funding to developing countries. But not everybody is on board with regard to this. Even the $100-billion pledge by developed nations to developing countries is far from being realised. Your comments on this please.

For Denmark, it's extremely important that we keep the 1.5-degree Celsius target alive. On climate finance and loss and damages, Denmark has already committed to our part of the funding. We were one of the first countries to have done so. I deeply hope that our example will inspire others. In general, I think it's most reasonable that we keep the promises we make.

The Ukraine-Russia war led to a global energy crisis and Europe has been one of the worst-hit regions. What are the learnings?

Look, India has challenges and so does Europe. One of the biggest challenges for Europe is our dependence on importing fossil fuels, fertilisers, and so on. Not only Denmark, but a lot of other countries are heavily dependent on imported raw materials and so on from Russia.

Russia is not to be neglected. So what can Europe do? I will use Denmark as an example. We are a much colder country compared to India. We use a lot of natural gas for heating our houses. And within the last year, we have lowered our consumption by 19 percent. In all government offices in Denmark, you are not allowed to have more than 19 degrees Celsius of heating temperature in wintertime, which is a bit colder than what we normally do. So the first thing we have done and what a lot of European households and industry have done is simply lowering the consumption, seeing if they can shift to other fuels. That's the short-term reaction.

The long-term reaction for Europe is to increase our capabilities to produce our own energy, which means solar and wind. Luckily, it's the same for India. So the power outlook for India going to 2050 shows that solar and wind will grow tremendously. It will take over the role of fossil fuels, and it's the same for Europe. And your challenge is meeting the absolute minimum reasonable demands of your population when it comes to electricity. Europe is slightly in a better place, but we also have an industrial sector that needs to have access to energy, and electricity will play a key role.
As your Prime Minister (Narendra) Modi said, India has the scale, Denmark has the competencies. We should bring that together because now it's the time to scale. And it goes for Europe, it goes for Denmark, it goes for India. The only real solution is getting your dependency down. And you're doing so by being able to produce more of the energy you need yourself. In that respect, India and Denmark and the EU—there are more similarities than maybe you think.

Denmark has been a pioneer in wind energy. But in India, wind energy has seen sluggish growth in the past four years. What is the problem according to you and how can Denmark help India to bring wind energy back in the growth path?

One of our key focus areas in the Danish-Indian partnership is to see if we can open a new Indian energy chapter, which will be offshore wind. And I'm very much looking forward to it because if you look at the amount of green energy needed, onshore wind is of course cheaper, faster and in many respects better. But land is a major issue. Land is not available for scaling up at that speed. Therefore, I think you (India) need to go offshore. And that's a focus point for us.

As you said, ever since the Ukraine-Russia conflict, countries are first looking at ensuring energy security. But storage is also an integral part with the scaling up of renewable energy. How fast do you see the energy storage sector grow, given that technology and even the resources to build them are limited?

Part of solving the storage challenge is hydrogen. The other part is to see more intelligent use of electricity, more flexible use of electricity. In Denmark, for example, we have now installed digital meters in our homes. We have a price setting in the Danish electricity market, where prices change every 15 minutes and every hour. We have redesigned our tariff structure so that it will be expensive to use electricity when people come back home and start cooking, plugging in their electric vehicles and so on. So the whole side of flexible demand response is also something we need to look into. And then you need to expand your electricity market.

The Indian minister for energy, RK Singh told me that India is looking into developing interconnectors with its neighbouring countries. Having a huge electricity market that is integrated is a big advantage because somewhere in that market wind is blowing and the sun is shining. You have time zones to your advantage. If it's possible to move electricity a long distance, maybe peak hours will not be at the same time. So designing a new, more intelligent, more digital, more advanced electricity system where we interact with consumers in a new way is something that we also need to go for.

Storage is part of the solution, but it's not the only solution. Renewables from wind and solar are part of the solution, but it's not everything. So we need this unique combination.
If you look at the figures, in 20 years India will need extra electricity capacity equal to the capacity of the entire European Union today. That is wild. But it also gives India something that is very unique. You have a chance to design it with some of the best technologies, with some of the best knowledge.
Part of your energy system is old, but you will have to build a very new one to meet those challenges. I think these are the things where India should look, and it's the same areas that we're looking at. You got the scale, we got some of the competencies. It will attract huge global markets, meaning industry will invest more, innovate more.

Do you think India can also lead in manufacturing solar equipment?

The information that I've been given from different ministers, civil servants, the Indian business community over the past two days has encouraged me to think that India can play a leading role. And I truly hope that because no matter where we look, it's not good if one country in the world has close to a monopoly on delivering technologies. With the demand for solar energy in India, I would expect that the Indian market would be one of the places on the planet where the solar panel industry could grow. And I truly hope that for India and for the world.