Dec. 7-18th may or may not mark the official “big bang” moment of the new global energy economy, but one thing seems to be clear … Copenhagen has emerged, quietly and methodically, as the center of the cleantech universe.
Copenhagen’s axial relationship to the rest of the cleantech world was hinted at with a deal inked just a few weeks ago between the Copenhagen Cleantech Cluster (CCC) and a leading cluster in the U.S., the Northern Colorado Clean Energy Cluster.
The deal establishes a working cooperative relationship between two clusters, a first for the cleantech space, and marks the beginning of a global “cluster of clusters” which seeks to accelerate the start-up and production cycles of new cleantech companies around the world.
It sounds a bit galactic when I describe it, so Nicolai Sederberg-Olsen director of the Copenhagen Cleantech Cluster offered a much more accessible metaphor:
“For the cleantech world, it’s like Prom Night. The boys and girls want to dance, but they’re not sure how to start. That’s where we come in.”
Modesty is a hallmark characteristic of the Danes, and it is a quality perhaps best represented by the mild-mannered CCC director who has at his disposal an arsenal of funds ($40 million at last count) conjured through a combination of private equity from some of the world’s largest energy companies, Copenhagen municipal funds, and matching EU grants.
The goal of the Copenhagen Cleantech Cluster is to put Copenhagen on the map as one of the leading destinations for new cleantech business and FDI (foreign direct investment).
But after making it to the top on a slew of important lists -- #1 Cleantech Country (Cleantech.com), #1 City to do Business (Economist), #1 Country for Business (Fortune), #4 FDI City of the Future (fDi), #3 in Global Competitiveness (World Economic Forum), #2 Most Liveable City (Monocle) – one thing is becoming apparent…
Copenhagen kind of owns the map.
Of the 720 cleantech companies in Denmark, more than half are located in Copenhagen, and these companies represent some of the biggest players (and brightest innovators) in clean technology.
And I’m not just talking about wind. Denmark is indeed the undisputed leader in wind energy, but the total number of companies working in wind is relatively small compared to other sectors (about 4 percent).
Denmark has major strongholds in a wide range of technologies -- biomass and biofuel technologies, fuel cells, EVs, energy efficiency, waste treatment and recycling, smart grid -- giving it a huge strategic advantage in attracting new cleantech business.
Another great quality about the Danes is a sense of openness and collaboration. Copenhagen has a great deal to offer to the world, largely as a result of many decades of R&D focused on solving their daunting energy problem (Copenhagen has 46 research institutions dedicated solely to pioneering new and more sophisticated clean technologies).
And yes, they are well aware of the massive economic opportunity awaiting them in the new energy economy, but they are also aware that the global climate crisis facing humanity will never be solved without sharing that hard-won knowledge.
Stephan Nielsen of the Copenhagen Capacity, an organization which shares offices with the CCC and is dedicated to increasing FD investing in the city, gave a great example of this.
In China, a typical coal-fired power plant is operating at about 40 percent efficiency. In Denmark, coal plants operate at 96 percent efficiency. Taking Danish coal plants to China could cut the number of new plants in half, largely mitigating one of the world’ most aggressive contributors to global warming.
Another example is the smart grid, or I should say the less-dumb grid. Though the U.S. has access to enormous renewable energy sources, its grid is dumb. Really dumb. In fact it is as dumb as Denmark’s was about 30 years ago, when Danish engineers were forced to redesign the nation’s power distribution system to accommodate a new decentralized and intermittent source of power -- wind. Stephan showed me the grid, then and now:
Taking those 30 years of R&D in smart grid technology to the States could rapidly accelerate the U.S. adoption of large-scale renewables like solar and wind, mitigating yet another global warming behemoth.
Of course, all of this takes money. As Stephan says, “When you put potential and money in the same place a lot can happen.” And one of the greatest attractors to direct investing is resource efficiency — making sure that every dollar invested is as risk-reduced as possible.
That is exactly the service that Copenhagen’s “cluster of clusters” is looking to provide. The cluster framework allows competitive parties who would normally never collaborate (much less dance together) to share a wide range or resources — academic, financial, HR and even equity.
The net result is a win-win for both investors who feel their money will be well spent as a result of the expertise represented by the cluster, and for business owners who can benefit by reduced overhead, R&D and access to markets they couldn’t normally reach.
The cluster model stands in contrast to the hermetically sealed IP world of Silicon Valley which back in the day could scarcely have conceived of such “coopetition.” The joke in the office, Nicolai said when creating the model for Copenhagen’s first cluster (Medicon Valley), is that they were taking the “silly” out of Silicon.
And it has worked. Medicon went from virtual obscurity to being one of the world’s leading investment clusters for biotech, and the same trend appears to be holding true for CCC. But both the problems and opportunities in cleantech are much greater, requiring unprecedented collaboration, a massive influx of funds, and a large network of cluster organizations.
Nicolai is reaching out to other clusters around the world — London, Dubai, Munich, Shanghai, Tel Aviv — to join in an international network of cleantech clusters with the ultimate aim of assisting the world's biggest polluters in rapidly adopting clean energy technologies.
For this to happen, North American businesses will need access to Asian markets and vice versa, and with Copenhagen at the central "referee" position on the playing field between the two carbon-belching continents, the city may well become more than a symbolic peacemaker at the upcoming COP15 climate talks.
The Copenhagen Cleantech Cluster could provide the collaborative and financial lubricant necessary to move two rusty, fossil-age economies into the 21st century.
More stories from my trip to Copenhagen:
- Beer: Carbon capture technology I believe in
- Mapping the future of energy
- Emissions fit for a queen
- U.S. poised to be biggest loser at COP15?
- Denmark, Sweden, Germany dominate top 10 cleantech list
- Winds of change in Denmark
- Biomass: Turning straw into gold
- A windy boat ride with Soren Herrmansen
- Rockwool: Melting rocks to save energy
- Cleantech beats pork as #1 Danish export
- Danish bicycle activists win $200 million upgrade