strong
institutions
and
widespread
public-private partnerships, which have
enabled the energy transitions of Norway and
Denmark. Norwegian petroleum tax revenues, which have helped finance its energy
transition, are the result of attracting investments in domestic oil and gas exploration and
development. This has been possible through
a petroleum tax system that is credible and
shares risks between government and companies. For example, the government of
Norway shares exploration risk with oil and
gas companies through tax exemptions and
the ability to deduct losses. Likewise, Danish
government subsidies for offshore wind and
its support for R&D have been long term and
credible. This has allowed developers to
reduce deployment costs and finance their
investment through pension funds and other
private investors. Both the Norwegian and
Danish cases highlight the importance of
credible policy that includes an element of
risk sharing between the government and the
private sector.
• China may wish to integrate different energy
resources—such as nuclear, wind, solar and
hydro—and provide public oversight of
infrastructure development to reduce system
integration costs. Government provision of
public goods, such as system integration and
pipeline infrastructure, has been key to both
the Norwegian and Danish energy transitions.
In Norway, the petroleum tax base rests on a
publicly managed and regulated infrastructure
system for oil and gas transport. Likewise, the
Danish wind transition rests on public action
to improve infrastructure and reduce system
integration costs. High levels of offshore wind
integration have only been possible due to a
combination of interconnections with neighbouring electricity markets and incentives to
make conventional power plants more flexible. These public initiatives have reduced
system integration costs and made the Danish
energy system capable of integrating significant quantities of renewables.
(3) Energy workers
The Danish and Norwegian energy transitions
have had very different employment outcomes.
In Norway, there were almost no green manufacturing jobs created, as the country did not
have an indigenous automotive industry. In
contrast, the Danish wind revolution resulted in
the development of a domestic industry, which is
today internationally competitive and supports a
significant number of green manufacturing jobs.
The Scandinavian cases present three important
insights for China:
• China may wish to take advantage of early
adoption to gain comparative advantage and
ease the transition for its energy workers.
Denmark benefitted from being an early
mover in offshore wind, providing many of
the initial technology advances, and therefore
became home to a fast-growing industry. As a
result, the transition created a significant
number of green manufacturing jobs in Denmark. In contrast, Norway did not see a
similar benefit from its EV transition because
it did not host a domestic automobile industry. Instead, it had to import vehicles and pay
high subsidies because EV costs had not yet
come down when it began its transition.
• China may wish to combine its renewable
energy policy with a regional development
strategy to maximise the benefits for its
energy workers. The energy transition has
benefitted poorer rural areas of Denmark
where wind power has been developed and
deployed. A similar pattern is seen in other
countries, such as the UK and the USA, as
wind resources are often located far from
conventional centres of economic activity.
The spatially dependent characteristics of
many renewables, such as solar and wind, can
therefore be seen as an advantage and can be
integrated into a wider regional development
strategy.
• China may wish to reskill hydrocarbon
workers and establish educational hubs that
190
W. Xiaoming et al.
institutions
and
widespread
public-private partnerships, which have
enabled the energy transitions of Norway and
Denmark. Norwegian petroleum tax revenues, which have helped finance its energy
transition, are the result of attracting investments in domestic oil and gas exploration and
development. This has been possible through
a petroleum tax system that is credible and
shares risks between government and companies. For example, the government of
Norway shares exploration risk with oil and
gas companies through tax exemptions and
the ability to deduct losses. Likewise, Danish
government subsidies for offshore wind and
its support for R&D have been long term and
credible. This has allowed developers to
reduce deployment costs and finance their
investment through pension funds and other
private investors. Both the Norwegian and
Danish cases highlight the importance of
credible policy that includes an element of
risk sharing between the government and the
private sector.
• China may wish to integrate different energy
resources—such as nuclear, wind, solar and
hydro—and provide public oversight of
infrastructure development to reduce system
integration costs. Government provision of
public goods, such as system integration and
pipeline infrastructure, has been key to both
the Norwegian and Danish energy transitions.
In Norway, the petroleum tax base rests on a
publicly managed and regulated infrastructure
system for oil and gas transport. Likewise, the
Danish wind transition rests on public action
to improve infrastructure and reduce system
integration costs. High levels of offshore wind
integration have only been possible due to a
combination of interconnections with neighbouring electricity markets and incentives to
make conventional power plants more flexible. These public initiatives have reduced
system integration costs and made the Danish
energy system capable of integrating significant quantities of renewables.
(3) Energy workers
The Danish and Norwegian energy transitions
have had very different employment outcomes.
In Norway, there were almost no green manufacturing jobs created, as the country did not
have an indigenous automotive industry. In
contrast, the Danish wind revolution resulted in
the development of a domestic industry, which is
today internationally competitive and supports a
significant number of green manufacturing jobs.
The Scandinavian cases present three important
insights for China:
• China may wish to take advantage of early
adoption to gain comparative advantage and
ease the transition for its energy workers.
Denmark benefitted from being an early
mover in offshore wind, providing many of
the initial technology advances, and therefore
became home to a fast-growing industry. As a
result, the transition created a significant
number of green manufacturing jobs in Denmark. In contrast, Norway did not see a
similar benefit from its EV transition because
it did not host a domestic automobile industry. Instead, it had to import vehicles and pay
high subsidies because EV costs had not yet
come down when it began its transition.
• China may wish to combine its renewable
energy policy with a regional development
strategy to maximise the benefits for its
energy workers. The energy transition has
benefitted poorer rural areas of Denmark
where wind power has been developed and
deployed. A similar pattern is seen in other
countries, such as the UK and the USA, as
wind resources are often located far from
conventional centres of economic activity.
The spatially dependent characteristics of
many renewables, such as solar and wind, can
therefore be seen as an advantage and can be
integrated into a wider regional development
strategy.
• China may wish to reskill hydrocarbon
workers and establish educational hubs that
190
W. Xiaoming et al.