Denmark’s Dong Energy increased its investment in wind farms by 70% in 2011, compared with the previous year, putting the firm well on track to meet its carbon dioxide (CO2) reduction goals.

The energy utility spent DKK10.9 billion ($1.92 billion) on expanding its wind activities last year, which include the offshore wind farms at Walney, London Array and Lincs in the UK, Anholt in Denmark and Borkum Riffgrund 1 in Germany. In 2010, Dong invested DKK6.4 billion in wind.

In the same period, its investments in oil and gas fields and infrastructure increased to DKK5.6 billion, from DKK4 billion.

By the end of 2011, Dong had 1,025MW of wind generating capacity and has authorised investment for the construction of a further 1,500MW. By 2015, it expects half its electricity to come from carbon-free or carbon-neutral sources.

As well as expanding its wind energy supply, Dong plans to replace coal with wood pellets. The company notes that pellets need to be produced sustainably if they are to reduce CO2 and not harm biodiversity, and “it will make further requirements of wood pellet producers,” it said in its annual report.

Dong said there are currently no general standards for sustainability in relation to solid biomass, and is working with other European energy companies to draw up sustainability criteria.

Thomas Dalsgaard, executive vice-president of Dong’s thermal power division, said: “I hope that the European authorities will be inspired by the criteria that Dong Energy and our partners have established and will develop pan-European standards for sustainability for biomass. That would enable us to talk to the producers of wood pellets with even greater conviction so we can ensure that the wood pellets we use in Europe continue to be sustainable.”

Dong emitted 486 grams of CO2 for each kWh of generation in 2011, less than the 524 grams emitted in 2010, which keeps the firm on course to meet its target of emitting 320 grams/kWh by 2020 – half its 2006 figure.

Its emissions that fall under the EU Emissions Trading System fell to 10.8 million tonnes, from 11.8 million tonnes in 2010.

Dong, which is majority owned by the Danish state, reported 2011 revenues were up 4% to DKK56.8 billion, while earnings (before interest, taxes and depreciation and amortisation) were down 3% to DKK13.8 billion

By Christopher Cundy
Environmental Finance