The “No Alternative” Situation

The first coal unit plans were introduced to the public by ELSAM in 1980, and, consequently, the issue became part of the debate during the city council elections in Aalborg in 1981. The obvious alternative to coal was natural gas from the Danish North Sea, and several city council candidates expressed their preference for natural gas. The national natural gas grid was not completed yet. However, in June 1982, the Danish government and Parliament decided to accelerate the project. As a consequence, natural gas became a realistic alternative when the project was discussed in late 1982 and early 1983.

Nordkraft supplied not only electricity, but the power station supplied heat produced by CHP to the district heating of Aalborg city, which the municipality of Aalborg managed. It is important to note that it was a joint ELSAM decision that Nordkraft was an oil-fired station, whereas most of the other power stations in the ELSAM area were coal-fired. Consequently, the electricity and heat consumers of Nordkraft did not pay a higher price for fuel than the other power station consumers. Internally, within ELSAM, the power stations defined common average prices of coal and oil, which were used at all power stations. The Nordkraft consumers, consequently, did not personally suffer from the mistake of opening an oil-based unit only a few months before the first oil crisis. The extra costs were shared among all electricity consumers within the ELSAM area.

During the decision-making process, in 1982, ELSAM suggested a change in the contract between the power station and the municipality. The aim of this change was to raise the amount paid by heat consumers if the authorities did not approve the coal project. The political chair of the technical committee of Aalborg, who was also a member of the board of representatives of Nordkraft, stated the following:

The chairman of Nordkraft suggested to the board of representatives that the price of heating was likely to increase if the authorities did not examine the project proposal (in its present version) in a satisfactory way—presumably implying satisfactory to ELSAM.⁴

Confronted with the threat of increased heating prices, the city council approved the ELSAM coal project (see Figure 7.1). Such an approval was done without analyzing or describing the natural gas alternative. However, in accordance with Danish Planning law, the physical planning procedure included a public participation phase. In this phase, the city council received 700 written objections from local citizens, mostly arguing against the environmental problems arising from coal and the lack of proper analyses and suggestions for alternatives.

The local radio station asked the managing director of Nordkraft, P. E. Nielsen,

Nielsen replied,

What the managing director could not do—suggest alternatives—was instead done by local citizens, as illustrated in Figure 7.2.

The Concrete Alternative Proposal

As a member of a local NGO,⁷ I participated in the design and promotion of a concrete alternative representing radical technological change. Our motivation was based on our firm belief that the coal project would increase pollution, anticipate the upcoming heat planning in Aalborg, and deteriorate the possibilities of introducing renewable energy (Lund and Bundgaard 1983).

The alternative, which is illustrated in Figure 7.3 in a sketch from 1983, consisted of three elements. The first was to convert Nordkraft into a natural gas–fired station. Such conversion would cost only 20 million DDK compared to the estimated cost of 640 million of the conversion to coal. The coal project required a completely new boiler of double the size of the old one, while the natural gas solution could use the existing boiler. The next step was to insulate approximately 8000 houses and thereby save 1600 TJ of expensive gas oil in houses outside the district heating area. Finally, the plan was to invest in small CHP stations on existing district heating grids in small towns and villages in Northern Jutland. Such an investment would make it possible to expand CHP production. Not all electricity production at Nordkraft was used to the benefit of CHP, simply because of the lack of district heating demand compared to the capacity of Nordkraft. Consequently, by replacing part of the production by small CHP units, one could expand the amount of heat produced by CHP and thereby reduce fuel consumption.

The investments of the alternatives amounted to only 320 million DKK compared to 640 million if Nordkraft was to be converted into coal. Moreover, the alternative would reduce primary energy consumption by 3300 TJ/year, partly by energy conversion and partly by CHP expansion, while the coal project would replace almost 6000 TJ/year. Whether a savings of 3300 TJ would prove cost-effective compared to a replacement of 6000 TJ/year of oil by coal naturally depended on fuel prices. In the promotion of the alternative, it was calculated that when applying the actual fuel prices of the previous 12 years (the period from 1970 to 1982) to the coming future period, the alternative came out with an economically better result than the coal project, even when environmental benefits were not included.

Later, I made a short calculation on the basis of actual oil and coal prices in the period between 1985 and 2000, both years included (see Figure 7.4). The cost of converting Nordkraft into a coal-based production—640 MDKK—has been compared to the economic benefit of replacing an annual amount of 6000 TJ of oil by coal. The benefit has simply been identified as the actual price difference between coal and fuel oil when delivered to a Danish power station. To compare investment costs and savings, the annual savings have been converted into a present value of the year 1985 using an interest rate of 5 percent. In the same way, the benefits of saving an annual amount of 1700 TJ of fuel oil and 1600 TJ of gas oil have been identified for the alternative.

The calculation is not based on actual production data of Nordkraft, and the differences in operation costs between coal and fuel oil have not been included. In the alternative, the price of natural gas has been determined at the level of the fuel oil price. Thus, the calculation represents an estimate. Nevertheless, the result clearly indicates that the project of converting Nordkraft to coal was hardly beneficial to society or to the power companies and the electricity consumers themselves. Meanwhile, if it would have been possible to implement the alternative, the saved fuel would have made such a project cost-effective.

Conclusions and Reflections

In the end, Nordkraft was converted into a coal-fired station. The following observations can be made from the case: The initial proposal put forward by the power company was a one —and only one—alternative proposal. The proposed technology fitted well into the existing organizations of the power companies. No radical and different alternatives were presented to the public when the proposal was to be approved.

City council members expressed preference for an alternative based on natural gas, but such an alternative did not even form part of the basis for the decision-making process. Local citizens seemed to be the only ones who were free to describe and promote a concrete technical alternative. Such an alternative was analyzed by the citizens themselves, indicating that it would prove cost-effective compared to the project of conversion to coal. Since then, a calculation based on the exact fuel prices of the lifetime of the Nordkraft coal power station has shown that the local citizens were right when they claimed that their alternative was competitive. Actually, it was preferable both in terms of environment and economics.

The main point to be deduced from the preceding observations is that, in this case, the institutional setup could not identify and implement the best alternative by itself. The alternative entailed a radical technological change—that is, it could not be implemented without introducing changes in institutions, including the existing organizations.

The discourse of the power companies focused on the optimization of the fuel use within the existing technical and organizational setup. The identification of alternatives that represented radical technological change was not a part of their interests or perception of reality. And even if it was, the implementation of such alternatives would be out of their reach, since it would involve investments in the insulation of private houses as well as CHP units in district heating companies owned by others.

The discourse of the city council focused on maintaining low district heating prices. Moreover, the council also had to manage urban and environmental concerns in the physical planning process. Again, the implementation of insulation and CHP outside the municipality was out of their reach. On the other hand, natural gas was an option within the reach and perception of the city council. However, the city council did not have the power or the resources to ensure a proper analysis and description of such an alternative when faced with the risk of substantially increasing district heating prices.

The proposal of radically different technological alternatives had to come from citizens outside the power companies and the city council. The existence of alternatives could raise the public awareness of the fact that, from a technoeconomic point of view, choice did exist. As a result, 700 citizens claimed that alternatives should be discussed and included in the debate. However, given the institutional setup, such radically different technological alternatives could not be implemented. Institutional changes had to be implemented at a higher level.

The Alternatives in Question

The heat planning procedure included a public discussion phase, and consequently, in the late summer of 1984, the municipality distributed to all households a written invitation to participate in the discussions. The invitation put forward three alternatives as illustrated in Figure 7.5 (left). In all of the alternatives, the main city area of Aalborg would continue to be supplied with district heating from the Nordkraft CHP station, which, as mentioned in the previous section, was now based on coal. The issue in question was how to supply the small suburban areas, towns, and villages around Aalborg with heat. The municipality proposed three alternatives. One was to expand the district heating system of Aalborg to most of the small urban areas. Such an alternative would mean that all heating would be based on coal, but it would be an efficient use of coal, since it would all be CHP production. The two other alternatives suggested using boilers for heat-alone production either in small district heating systems and/or as individual boilers using natural gas. The fuel would be coal, straw, or natural gas. Both alternatives would involve the replacement of coal, but these productions would not be as efficient, since they would not benefit from CHP.

As part of the public discussion phase, I and six other students and teachers from Aalborg University proposed a fourth alternative that was simply to build small CHP stations based on natural gas in all areas. We illustrated the alternative as shown in Figure 7.5 on the right. Our intent was to pave the way for renewable energy in the forms of wind power and biogas. The main idea was to have both an efficient CHP production and, at the same time, avoid the use of coal. We presented three advantages of alternative 4 compared to the others. In terms of energy efficiency, alternative 4 was substantially better than alternatives 2 and 3. For two reasons, it was also slightly better than alternative 1: First, one could save district heating losses in huge pipelines of 10–15 km from Aalborg to the small urban areas. Second, the efficiencies of the small natural gas units were slightly better than the efficiency of the Nordkraft coal unit.

In terms of environment, alternative 4 was the best solution, since it would either replace coal by natural gas when compared to alternative 1 or save substantial amounts of fuel when compared to alternatives 2 and 3. Alternative 4 would pave the way for renewable energy, since a system of small gas engine units would ease the introduction of biogas and, at the same time, provide a better integration of wind power than a coal-fired steam turbine was able to do.

Often such an environmentally better solution would be more costly than other alternatives. However, if the costs of cleaning SO₂ emissions from coal were included in the calculations, alternatives 1 and 4 came out equally cost-effective from an economic point of view. And since the natural gas/CHP solution had further benefits with regard to energy security, balance of payment, and CO₂ emissions, and such externalities according to the authorities were to be included in the overall assessment, it was concluded that alternative 4 was the best solution.

Though alternative 4 was preferable in terms of socioeconomics as defined by the authorities according to the law, the implementation would still mean increasing prices for the consumers compared to the coal alternative. The reasons for this were to be found in the institutional setup of the Danish energy taxation system. The energy tax on coal was only 27 DKK/GJ compared to a tax of 51 DKK/GJ on natural gas. Moreover, such a tax was only to be paid for the fuel used for heat and not the fuel used for electricity production. And an administrative practice had developed in which coal-fired steam turbines were only taxed a small part of the fuel (typically around 40 percent), while natural gas engines were taxed a major part (typically 60 percent). A detailed description and analysis of the administrative practice and the consequences are presented in Lund (1988).

All in all, in accordance with the law, the alternative involving natural gas and CHP should be chosen, since it proved to have the best socioeconomic feasibility. However, the municipality wanted to implement the CHP and coal alternative, since it proved to have the best consumer heat prices.

Choice-Eliminating Strategies

As mentioned, the group from Aalborg University described and promoted alternative 4: small CHP stations based on natural gas paving the way for future renewable energy systems. The proposal was discussed in the newspaper, and we mailed it to the municipality as part of the public discussion phase in 1984. The municipality answered that no decision had been made and that they would closely follow the development within natural gas–based CHP stations.

In the following years, two occurrences took place that helped the promotion of the natural gas–based CHP alternative. First, an agreement was made between the government and the major opposition party to expand small CHP stations on domestic resources by 450 MW. Second, the Energy Authority issued a report that concluded that natural gas–based CHPs proved socioeconomically cost-effective, even in small urban areas.

Nevertheless, in February 1987, the newspaper stated that the Municipality of Aalborg would now decide on the matter. References were made to calculations showing that the best heat prices would be achieved by implementing alternative 1—that is, coal-based district heating from Nordkraft was to be supplied to ten surrounding urban areas. We asked for the report and could see that alternative 4 had not even been analyzed.

We protested in the local newspaper. The city council postponed the decision for 2 weeks and invited my colleague, Frede Hvelplund, and me to analyze the alternatives together with the municipality administration. We soon agreed on the premises and chose one of the small towns, Frejlev, as an example. Both parties made some calculations and met on April 6, 1987, to compare the results.

Our calculations showed that natural gas–based CHP was the best solution in a socioeconomic perspective, whereas, with regard to heating prices, the result depended somewhat on the expectations of future fuel prices. The calculations of the municipality administration confirmed that natural gas–based CHP was the best solution in terms of socioeconomic feasibility. However, their calculations came to the result that coal-fired central CHP would provide the lowest consumer heating prices.

The fact that the two calculations came to the same result with regard to socioeconomic feasibility caused a major problem to the city council. According to the law, they were supposed to choose natural gas CHP, but they wanted coal. The city council had its next meeting on April 13, and the committee on heat supply had to discuss the matter at a meeting on April 9.

Then something happened: When sending out papers prior to the city council meeting, the two calculations of April 6 were not included. Instead, the municipality administration made a new calculation dated April 9, which was distributed to the committee at the meeting. This calculation came to the result that in terms of socioeconomics, coal was even slightly better than small natural gas–fired CHPs. However, such calculations did not include all environmental and energy security benefits of the natural gas alternative. Consequently, even based on the new calculation, natural gas would still be best in an overall socioeconomic assessment as defined by the law. But the issue was not mentioned.

We responded by sending our calculations of April 6 directly to the city council members before the city council meeting on April 13. At the meeting, some city council members raised a discussion on whether it was appropriate for university employees to write a letter using the university's letterhead (see Figure 7.6). On the following day, the issue was presented on the front page of the local newspaper: “City Council Criticizes Aalborg University's Use of Letterhead Writing Paper.”¹² The contents written on the paper were not discussed. Instead the city council decided to implement the coal-based alternative 1.

Soon thereafter, the Danish Minister for Education, Bertel Haarder, who was a member of the same political party as the city council member leading the discussions on the writing paper, made an official inquiry to the university, and we became a subject of investigation. However, the rector of Aalborg University, Sven Caspersen, concluded that we acted correctly with regard to the use of the official university writing paper.

According to the heat planning procedure, the heat plan of Aalborg had to be approved first by the county and then by the Danish Energy Authority. The process is described in more detail in Hvelplund and Lund (1988). To cut a long story short, the Danish Energy Authority attempted to make the municipality conduct further analyses, but in the end, they had to give up, and the coal-based alternative was approved.

Conclusions and Reflections

In a way, the case of Aalborg heat planning takes over where the Nordkraft case stops. From the Nordkraft case, it could be learned that given the existing institutional setup, radical technological alternatives could not be implemented. Institutional changes had to be made at a higher level. In the Aalborg heat planning case, such changes at a higher level had to some extent been made by introducing the heat planning procedures that supported the choice of the socioeconomic least-cost solution in accordance with the purpose of the law.

Some important lessons were learned from the case. Three alternatives were put forward by the municipality, none of which represented the combination of CHP and other fuels than coal. Such solutions did not fit well into the interests and perceptions of the city council and the municipality-owned district heating company. It was thus disregarded in the definition of optional alternatives to be discussed in the public participation phase. Alternatives representing radical technological change had to come from the University and local citizens. The case reveals some interesting choice eliminating mechanisms and strategies:

• When addressing the public discussion phase, the municipality simply left out certain alternatives.

• When such alternatives were proposed by the citizens, the municipality disregarded these in the comparative analyses.

• When comparative analyses showed an inconvenient result, new analyses were made.

• Only the analyses that showed the most convenient results were put forward to the city council.

• When citizens mailed inconvenient results to the city council, the contents of the analysis were disregarded. Instead a discussion of the letterhead used was initiated, presumably to incriminate the senders.

The case confirms the learning from the Nordkraft case by showing that the present institutional setup could not identify and implement the best alternative by itself. The main point to be deduced from the case is the knowledge that it is not efficient to tell by law what to do if the institutional market setup makes it profitable to do something completely different. If the institutional setup of the energy taxation system favors coal at the cost of, among others, natural gas, the local municipalities are faced with a principal request to choose solutions that are expensive for heat consumers. In such a situation, the municipalities will seek to disregard other alternatives than the one with the lowest heating prices. In the case of Aalborg, the county council and the Danish Energy Authority failed to make the municipality live up to the words and the intentions of the law.

However, the case also illustrates how institutional barriers can be identified by the introduction and discussion of concrete technical alternatives. As a follow-up on this case, we promoted concrete proposals on how to change the Danish energy taxation system to create a situation in which the socioeconomic best solution would also generate the best consumer heat prices.

The Applied Neoclassical Cost-Benefit Analysis

The economic evaluation of biogas made by Risø was, according to the report, carried out as a cost-benefit analysis based on neoclassical welfare economic theory and methodologies aiming at comparing socioeconomic costs and benefits of implementing large-scale biogas stations. The analysis was conducted in the form of present value calculations of three different existing biogas stations over a time horizon of 20 years: Fangel, Davinde, and Lintrup. The three stations were then compared to relevant reference stations. The two first biogas stations, Fangel and Davinde, had oil-fired district heating stations as their reference alternatives, whereas the Lintrup biogas station had a natural gas–fired district heating system as its reference alternative. The prices used in the calculations were market prices, excluding VAT and energy taxes. The price prognoses used for fossil fuel were based on the official prognoses from the Danish Energy Authority. The results of these calculations are shown in Table 7.1, not including the environmental benefits.

Table 7.1 Risø Report, 1991 Socioeconomic Results, Not Including Environmental Benefits

Million DKK	Fangel	Davinde	Lintrup
Investment	26.7	4.3	45.2
Present value	–15.2	–5.1	–26.8
Annual surplus	–1.4	–0.5	–2.5

As Table 7.1 shows, the projects are assessed as not socioeconomically feasible. The Risø report also made calculations that included the environmental benefits of biogas, based on the following emissions and socioeconomic costs: SO₂ 14 DKK/kg; NOx 8 DKK/kg; and CO₂ 100 DKK/ton. The socioeconomic results including these environmental costs are shown in Table 7.2.

Table 7.2 Risø Report, 1991 Socioeconomic Results, Including Environmental Costs

Million DKK	Fangel	Davinde	Lintrup
Annual surplus	–0.9	–0.4	–2.2

Based on the results in Tables 7.1 and 7.2, the Risø report concluded that

and the main report concluded that the existing large-scale biogas facilities were not socioeconomically feasible.

Feasibility Study Based on Concrete Institutional Economics

The main problem of the preceding cost-benefit analysis is that it does not provide sufficient information relevant to the specific decision-making process. When the authorities formed the committee, it was asked to

However, the preceding study did not systematically adapt its analysis to the specific situation. This adaptation could have been performed by systematically asking and answering the questions what should be analyzed, for whom is the analysis being done, and why is the analysis being done?

The feasibility study conducted in the AAU report (Lund 1992a) involves a thorough analysis of those issues and comes to the following conclusions:

• Question: What should be studied? Answer: The socioeconomic feasibility of the biogas scenarios. This means that the study should have a long-term perspective that also integrates the study of technological changes.

• Question: For whom and why? Answer: The study is essentially done for the Danish Parliament, which demands that information be used for deciding the future biogas strategy.

This means that the parameters applied to measure whether biogas is economically good or bad should be relevant to official energy policy objectives as well as to the overall economic objectives of the Danish Parliament. Consequently, a thorough description of such objectives was included in the feasibility study, leading to the results that, with regard to the Parliamentary energy policy, the analysis showed that both the official energy plan of that time, Energy Plan 81 (Danish Ministry of Energy 1981), and Danish law on heat supply declared that their main purpose was to secure and promote socioeconomically best solutions. When defining the term socioeconomics, the official energy plan emphasized balance of payment and job creation as important considerations to include.

With regard to the overall Parliamentary economic objectives, the analysis showed that the financial statement of the authority (Danish Ministry of Finance 1991) emphasized the problem of unemployment. Good results had, in the previous years, been achieved with regard to other economic factors, but the unemployment rate had risen. The authorities targeted unemployment as the important problem to address in the coming period.

All in all, the analysis revealed that energy solutions that would increase employment, improve the balance of payment, decrease pollution, and increase GDP were important measures to fulfill the aims of Parliament. The analysis also showed that labor was a rather abundant resource, as unemployment mounted to 350,000 in 1990, equal to more than 10 percent of the workforce.

When returning to the applied neoclassical cost-benefit analysis, it is important to note that the study presumes full employment and does not consider foreign debt a problem. In all calculations, positive effects on technological development, balance of payment, state finance, and employment were given no value, although such effects were given high priority in the aims of the Danish Parliament.

As a consequence, the AAU study included the preceding effects in its socioeconomic analyses. Calculations were made of a biogas scenario, assuming that 50 percent of all manure in Denmark from cattle, pigs, and poultry was used for biogas production. The outcome of this analysis is shown in Table 7.3.

Table 7.3 AAU Study: Three Examples of the Consequences of the Biogas Scenario

	Example 1: (0 million DKK extra tax per year)	Example 2: (1500 million DKK extra tax per year)	Example 3: (750 million DKK extra tax per year)
GDP (Gross Domestic Product) (Million DKK/Year)	+1000	0	+500
Employment Effects (Persons)	+5000	0	+2500
Governmental Expenditures (Million DKK/Year)	+200	+1200	+700
Balance of Payment (Million DKK/Year)	+300	+900	+600

The analysis revealed that if consumers were to pay the same price for heat and electricity as in the reference, the government had to provide a subsidy equal to 300 million DKK/year. However, Denmark would decrease its net imports (the decrease in import of fuel minus the increase in import of goods to construct the biogas stations) by 450 million DKK/year and increase its GDP by 750 million DKK/year. Such a situation is a token of a positive change. In the study, it is emphasized that the Danish government can choose to benefit from such a positive situation either by seeking to decrease foreign debts or by seeking to raise employment.

In Table 7.3, three examples are presented in which the biogas investment program is supplemented with different degrees of increases in income taxes (or other taxes). The three examples differ from one another. Thus, example 2 includes 1500 million DKK/year in extra tax used to maintain total buying power and production at a constant level. Example 3 has exactly the same biogas scenario but with 750 million DKK/year in extra tax. Example 1 has no extra tax at all. The three examples show the different possibilities of the biogas scenario.

The positive socioeconomic effects are mainly caused by saved imports due to a decrease in oil and coal imports; increased employment because of the high employment effects linked to building, maintaining, and running biogas stations; and increased incomes and consequently increased taxes, which improve the public finances. Such an increase in income to the governmental budget more than compensates for the subsidies that must be given to motivate the construction of biogas stations.

The resources and environmental effects are shown in Table 7.4, which shows that when relating the socioeconomic feasibility of biogas to the goals of Parliament, the biogas scenario demonstrates higher economic and environmental performance in all important areas. When including employment effects, balance of payment effects, and effects on the state finances, this scenario is, therefore, indeed cost-effective from a socioeconomic point of view.

Table 7.4 AAU Study: The Resources and Environmental Effects of the Biogas Scenario Compared to the Reference Scenario

	Biogas Scenario (50%)	Reference: Oil for Heat and Coal for Electricity	Environmental Advantages of Biogas
Primary Energy Supply in Total (TJ/year)	16,196	18,720	-
Fossil Fuel Consumption (TJ/year)	468	18,720	18,252
CO2 Emission (1000 Ton/year)	34	1494	1460
SO2 Emission (Ton/year)	470	5840	5370
NOx Emission (Ton/year)	2780	2783	-

Conclusions and Reflections

When Parliament wanted an answer to the question if biogas was suitable for society, a cost-benefit analysis methodology based on applied neoclassical economics was chosen without further consideration. Such an analysis was not wrong, but it was irrelevant in relation to the specific political context and objectives. The calculations were right when seen isolated from the specific real-life economic situation of Danish society in the 1990s. It was correct to conclude that biogas stations had not yet reached a stage at which they were economically feasible in the existing institutional context and when applying existing market prices. But seen from the government's point of view—and this is the relevant standpoint in this case—the biogas scenario just described is socioeconomically feasible, as it pursues and satisfies essential governmental aims better than the references do.

The methods applied here to establish the context and measure the relevance of a certain alternative show the strength of applying the Choice Awareness strategy. When political aims and programs involving elements of radical technological change are in question, it is recommended to conduct feasibility studies based on concrete institutional economics. The main point of the case is that proper attention should be paid to the identification of political and economic objectives when conducting a socioeconomic feasibility study.

The No Alternative Situation

In the case of the Nordjyllandsværk, the political decision makers were asked to choose one—and only one—solution. The board of representatives of the local power company Nordkraft, which was part of ELSAM, was asked to approve the plans for a new coal-fired power station by voting either for or against the suggestion. The consequences of a yes were obvious, but the consequences of a no were not suitably described. The year before, some of the representatives had asked for a study of an alternative based on natural gas. Such an alternative involved the replacement of the old facilities of the existing power station in the center of Aalborg, Nordkraft, by a combined cycle CHP power station based on natural gas. Furthermore, the CHP station should be adjusted to the district heating demands of Aalborg and thereby be somewhat smaller than the planned coal-fired unit. Even though such an alternative had been examined, and indeed was requested by some of the representatives, it was not put forward in the decision-making process, when the decision was made in the power companies, or when the application was examined by the Danish Energy Authority. Everyone was asked to choose a coal-fired power station—or nothing.

In that situation, some of my colleagues and I described and put forward a concrete alterative to the two power stations (Hvelplund, Illum, Lund, and Mæng 1991; Lund 1992). Such an alternative made it possible to evaluate the many arguments in a relevant context. In principle, the choice was very simple, and everyone had the premises for participating in the discussion. But ELSAM and the government had a problem. The installation of a coal-fired power station was contradictory to the Energy 2000 policy. And that conflict was not to be revealed during the public debate. The situation created a number of arguments, which seemed right but were wrong. Here are some of the statements:

• Because the Nordjyllandsværk is a CHP station, it fits well into the strategy of Energy 2000.

• The Nordjyllandsværk will replace 30-year-old power stations. Therefore, it is good for the environment.

• The construction of new large power stations will not present any barriers to the construction of small CHP stations.

• The feasibility of the power stations is good, even if governmental electricity savings programs are successful.

• ELSAM and the Energy Authority do agree on the prognoses for future electricity demands.

• It is necessary to vote for the two power stations to support the export of Danish know-how.

All of these statements sounded true, and each had arguments to support it. But put into the relevant context, they all proved wrong. For example, it was true that the Nordjyllandsværk was constructed as a CHP extraction station (which can be operated as CHP as well as a power-only station). However, due to the size and the location of the station, the project did not allow for any increase in the number of households being supplied from CHP. Consequently, it did not comply with the Energy 2000 strategy of expanding CHP in Denmark.