CHEAP, MODERN AND GREEN ENERGY AND WATER FOR EVERYONE The Government of Greenland rolls out a comprehensive and long-term energy reform – the first step is the big price reductions on electricity and water Summary of the Government of Greenland’s “Sector plan for energy and water supply” – November 2017 The Ministry of Industry, Labour, Trade and Energy Cheap, modern and green energy and water for everyone The Government of Greenland rolls out a comprehensive and long-term energy reform – The first step is the big price reductions on electricity and water Summary of the Government of Greenland’s “Sector plan for energy and water supply” – November 2017 Edit: Beth Werner, journalist Layout & Print: ProGrafisk ApS Published January 2018 Front page photo: ©Tikki Geisler TABLE OF CONTENTS Foreword . 4 Price reform – electricity and water will be much cheaper from 1st of January 2018 . 6 Greenland must be much greener in 2030 . 9 Hydropower is a major clean energy source . 11 Solar and wind power will be included in the energy supply . 12 Better supply of clean drinking water . 15 More electric cars in hydro-powered towns . 16 Do not use more energy than necessary . 16 Cooperation and sharing experiences with other countries . 17 The Government of Greenland’s vision and plans – the 2030 energy sector plan summarised in 35 objectives . 18 FOREWORD If our society is to function optimally and more importantly develop, it requires, amongst many things, a well-function- ing public supply of energy and water . “Well-functioning” is understood as being reliable, accessible, environmentally friend- ly and financially beneficial for all citizens, industry, as well as for the public sector . We are well on the way, but in order to achieve the goal on all parameters, the Government of Greenland has adopted a comprehensive and ambitious energy re- form between now and 2030 that consists of three overriding goals: 1. Lower prices for electricity and water that calls for a comprehensive modernisa- From the 1st of January 2018, the price of tion and technological optimisation of the electricity and water will be significantly re- entire energy system . duced and at the same time, the price will Our country is rich in hydropower be maintained at equal levels regardless of resources, which along with wind and solar where in the country you live and/or run a power, in the long run, makes it possible business . The savings will improve the liv- to provide all citizens and business with ing conditions of many families and, above cheap and clean energy . Cheap, clean and all, help to create new jobs – especially in renewable energy are factors that ener- the small towns and villages . gy-intensive industries, data centres, etc ., value highly . 2. Green energy everywhere Renewable energy solutions will that it is possible strengthen business development and By 2030, the goal is that the public energy therefore our entire society . supply must be, to the fullest extent This booklet describes current and possible, derived from renewable energy future developments and initiatives within sources . the energy and water sector towards 2030 . 3. Modernisation of the energy system Production of energy based on fossil fuels We hope you find it an interesting read (oil) must be replaced with renewable ener- gy sources such as hydropower, wind, solar, Hans Enoksen hydrogen in places where this has not The Minister for Industry, already happened, and a reorganisation Labour, Trade and Energy 4 Photo: © Mads Pihl – Visit Greenland Photo: © Mads Pihl – Visit 5 PRICE REFORM – ELECTRICITY AND WATER WILL BE MUCH CHEAPER FROM 1ST OF JANUARY 2018 With a price reform of electricity and water, Table 1. Pricing model 1. the Government of Greenland will create a system based on solidarity and equali- Model 1 – equal pricing Previous price (min/max) New pricing ty. Citizens and businesses currently pay Electricity pr. kWh 1,63 / 3,25 1,60 different prices for electricity and water de- pending on locality . If you live in a village Water pr. m3 19,12 / 33,40 19 or outlying districts with high costs for the 41 .5% of production and supply of water, also called Fish industry tariff 41 .5% of the local unit price the local unit price unit costs, you typically pay a maximum price . In larger towns and particularly hydro-powered towns with low unit costs for electricity and water, a minimum price and as a starting point, the tariff be 41 .5% save almost DKK 8,000 per year with the is paid . of the local unit cost for electricity and wa- new prices . In the past, they have paid The difference between the lowest and ter in each town and village, although, with almost double that for the same amount the highest price is quite significant. The a maximum price that is same for ordinary of electricity and water . It is a very large price of electricity ranges from DKK 1 .63 consumers. This means that the fishing expense to budget for, especially if you to DKK 3.25 per kWh. The price of a cubic industry’s minimum price for electricity are a low-income family . metre of water ranges from DKK 19 .12 to will be DKK 0.66 per kWh and a maximum At the national level, the average in- DKK 33 .40 . price of DKK 1 .60 . Water will have a min- come for a village resident is DKK 165,0001 imum price of DKK 7 .89 per cubic metre per year . In Tasiilaq, the average income Equal pricing and lower and a maximum price of DKK 19 . is even lower, namely at the level of DKK prices for everyone Electricity and water prices for the rest 150,000 per year . From 1st of January 2018, the pricing of the business community will remain simi- As shown in table 4, families in larger system will be based on solidarity and lar as the case for private consumers . towns like Nuuk and Sisimiut will also ben- fairness when nationwide equal unit prices efit from the savings, however, on a smaller are introduced for electricity and water – Families in the villages and small scale than in the other four villages/towns no matter where in the country you live . towns will save almost DKK in the table . Conversely, town residents The equal unit price of electricity will be 8,000 per year have a significantly higher income than DKK 1.60 per kWh and DKK 19 per cm3 for All consumers will save money on the cost village citizens. On a national level, a town water . With the introduction of nationwide of electricity and water – to a greater or resident earns an average of DKK 238,000 unit prices, the prices will also be lower for lesser extent . Families in villages and small per year. Nuuk is well above the average everyone . towns will realize significant savings. income with just over DKK 300,000 . There will continue to be a minimum For example, an average family in The fishing industry will also reap great and maximum price for the fishing industry, Tasiilaq with 2 adults and 2 children will rewards with the new pricing system . On a 1 Average personal income (Gross income) by district in 2015. Source: Statistics Greenland, http://bank.stat.gl/INDP1 6 Table 2: Current pricing for the fishing industry Current pricing for the fishing industry in designated towns (2017 prices) Nuuk Qaqortoq Tasiilaq Nanortalik Qaanaaq Upernavik 0.68 kr./kWh 0.97 kr./kWh 1.42 kr./kWh 1.99 kr./kWh 2.44 kr./kWh 3.25 kr./kWh Photo: © Mads Pihl – Visit Greenland Table 3: Pricing model 1: Pricing for the fishing industry New pricing for the fishing industry in designated towns (2018 prices) Nuuk Qaqortoq Tasiilaq Nanortalik Qaanaaq Upernavik 0,66 kr./kWh 0,91 kr./kWh 1,02 kr./kWh 1,60 kr./kWh 1,60 kr./kWh 1,60 kr./kWh 7 Photo: © Rebecca Gustafsson – Visit Greenland Photo: © Rebecca Gustafsson – Visit national level, the fishing industry’s annual – at a level of DKK 21 .8 million per year . Greenlandic prices can match cost of electricity and water is expect- It is hoped that this reduction in company European prices ed to fall to just over DKK 10 million (in costs will strengthen the economic base in The price reform means private house- addition to the fishing industry discount the smaller towns and villages . Currently holds, small businesses and not least the that currently exists), and the savings will almost 80%2 of businesses with a payroll of fishing industry will receive competitive also help increase competitiveness . Other more than DKK 10 million are in Sermer- prices on electricity and water, compared industries will also experience big savings sooq Municipality . to a number of European countries . Cost neutral price reform Table 4: Pricing model 1 – Annual savings for households The cost of lower electricity and water prices will be offset by, among other Model 1 – Annual savings for households (water and electricity) things, the annual construction loans to Savings for a family with Savings for a family with a single Nukissiorfiit from the National Treasury Town/Village 2 parents and 2 children parent and 2 children being reduced, as Nukissiorfiit will be able to finance a greater portion of their fixed Family 1 (DKK) Family 1 (%) Family 2 (DKK) Family 2 (%) asset investments themselves . In addition, Tasiilaq 7 .935 48 % 5 .565 49 % the National Treasury’s additional costs will be financed by saving on electricity and Sarfannguit 5 .775 51 % 4 .125 51 % water costs for the Self-government and Qaqortoq 4 .785 36 % 3 .315 36 % municipalities, as well as public institutions and companies .