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Week of 10.30.09

Transcript: Electric Car Dreams

BRANCACCIO: Those huge blades here in Denmark are harvesting a crop of energy. Wind goes in and out comes clean electricity without the carbon dioxide or other gases linked to global warming that spew from a more typical, coal-fired power plant. Denmark is a world leader in energy and it's now figuring out how to store and use that energy even when the wind isn't blowing. How? Of all things, by putting electric cars into the hands of as many Danish families as possible. With the big Copenhagen climate change summit on the way, we'll take a look at how Denmark is able to do things with energy that most countries can only dream of. Jennie Amias produced our report, part of a series of social entrepreneurs at work that we call Enterprising Ideas. A single electric car is interesting enough. We're outside the convention center in Copenhagen where that gathering of world leaders is happening in a couple of weeks... and there's this Nissan prototype. All electric, you couldn't put gasoline into this even if you wanted to. The electric batteries don't seem to cut into the interior space at all. And it's amusing enough to drive. Notice the sound...or absence thereof. But an electric car in itself is not revolutionary. They've had those since the turn of the last century. What is revolutionary in Denmark is that in the coming year, its roads are set to become thick with these things. Call it an "infestation" of electric cars. That's what's in the works here, powered largely with clean wind. This kind of radical energy transformation in the fight against global warming is fascinating, one that folks in all countries—including you, my fellow Americans—would do well to watch. The recipe involves people, policy, and some impressive technology. Stick around to see the robot that creeps under the car. But first, recipe ingredient number one: the people of Denmark who've figured out how to live well while keeping their carbon footprints under control. Note the understated elegance of the business-suit-on-the-bike look. Check out this simple ramp molded into the wall to make rolling your bike up from the subway station easier...what does it cost them to put it in...next to nothing? And this not so little bicycle parking lot. But given the vagaries of the northern European weather, it takes a certain mindset to even consider cycling. Cathrine Matarese, Karsten Jensen and their two little ones live near the center of Copenhagen. They don't consider themselves especially tree-hugging. However, they do get by without a car.

KARSTEN JENSEN: In the summertime April to approximately October I ride a bike to work. Or the transportation system is so good so, in less than an hour I'm at the job in the morning and home in the evenings, so it's no problem

BRANCACCIO: Cathrine ferrys her son to school every day on foot... it's not exactly around the corner...

CATHRINE MATARESE: We walk 45 minutes each way.

BRANCACCIO: Cathrine is on maternity leave from her job as a teacher. Karsten services big diesel engines on merchant ships down at the port. A well-serviced engine puts out less carbon dioxide, Karsten points out. When the family leaves town every couple of weeks to see grandma, they grab the kids and take a 3 hour train ride to the south of the country.

CATHRINE MATARESE: It's like an adventure for the big one to travel by train. You can see the countryside, and you have the time to talk and play with your children as well, because you can't move. You're just staying there.

BRANCACCIO: And then what happens when you get to where your mother lives. Do you have to walk to her house?

CATHRINE MATARESE: Yeah, then we walk 20 minutes.

BRANCACCIO: 20 minutes. I'm wondering if there's an American family alive that would take a bus to a train with a 3 month old and a 3 year old and then walk 20 more minutes to their mother's house. But it's not just outside of the house where the family is keeping their carbon dioxide low.

CATHRINE MATARESE: We also keep a record actually on how much energy we use, or electricity we use.

KARSTEN JENSEN: Every week

BRANCACCIO: We had no idea before we walked into this apartment that Cathrine and Karsten would be quite this focused on limiting their use of electricity and therefore, greenhouse gases. Their goal is to keep consumption at 50 kilowatt hours per week...less than a quarter of the typical U.S. consumption.

And, so how do you do it? Do you write it down? Or does it -

CATHRINE MATARESE:Mm hmm. We write it down every week. Yeah. And then we try to reduce it if we're using too much. And then we're happy if we use less than 50.

BRANCACCIO: Part of the reason that so many Danes seem borderline obsessive about their energy use is because the country's policies make it very expensive not to be. There are for instance some wild taxes in Denmark that we'll hear more about in a minute. That's ingredient two in the recipe for this country's energy transformation. Public policy informed by history. Denmark was occupied by neighboring Germany during World War II. Until then it had been importing coal from England, but it stopped under occupation. With few natural resources of its own, rising costs for coal and oil left the Danish economy especially vulnerable to price shocks. And 30 years later it was still true, when Denmark, along with the rest of the world, was rocked by the Middle East oil embargoes that sent prices skyward. At that time ninety percent of the country's energy consumption came from oil. When that energy crisis hit, the Danish government took drastic measures. Danish drivers were forbidden to take their cars out on Sundays, shopkeepers were asked to turn off the lights, and conservation was in. The energy crisis also scared the bejeebers out of us. President Jimmy Carter sounded the alarm for energy independence.

CARTER: The energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.

BRANCACCIO: Among other things, he gave tax credits for use of renewable energy. Even put solar panels on the roof of the White House. But there was a key difference. Unlike Denmark, the U.S. seemed to forget the lessons of the 70s. Under President Reagan, the solar panels came off the white house. And within a few years, fuel-efficient cars were eclipsed by gasoline-hungry S.U.V.s. In Denmark, the bicycling of the 70s had become a habit that stuck. a succession of governments of all political stripes continued to embrace green energy, especially wind power. And the government kept the price of energy from fossil fuel high by American standards... in part through taxes. We've just filled the tank on this gas powered car. The equivalent of 13 gallons cost $88 dollars. Bicycle, anyone? But now Denmark is taking its move toward green energy into a new, more intensive phase. That's because there's still a lot of work to do. Despite all the windmills, this country still generates a lot of its electricity in ways that are bad for global warming. And a lot of that carbon dioxide is being brought to you by the biggest of this country's energy companies, Danish Oil and Natural Gas. Acronym "DONG." Anders Eldrup is the CEO of Dong Energy.

ELDRUP: Around 85 percent of the power production we—we stand for is produced from fossil fuel, mainly coal, but also gas. But—and 15 percent comes from renewables, mainly wind.

BRANCACCIO: Eldrup's huge undertaking now is to flip that ratio around.

ELDRUP: Our target, my target is within one generation, to change the equation so that 85 percent comes from renewables and 15 percent from the fossils.

BRANCACCIO: In the U.S. just 7 percent of our energy comes from renewables. Dong energy's position isn't quite what you'd expect from a big company with oil & gas in the name. Enlightened leadership is part of the reason, aided by the fact that dong is nearly three-quarters-owned by the Danish government which has made it crystal clear that green energy is a key goal.

MIKKELSEN: To the left is the storage building for the straw, so, in there the straw is stored for approximately a couple of days.

BRANCACCIO: As part of the effort, dong energy is investing, through one of its subsidiaries, in some fancy new biofuels made from leftovers from farmers fields. Right next to this coal-fired plant—bad for global warming—is the site for a new refinery that will make ethanol from hay or straw—better for global warming.

MIKKELSEN: And the tall building is actually where the main process starts. So that is the hydrothermal treatment is inside there.

BRANCACCIO: In addition to the ethanol, the plant will produce a molasses stuff that can be fed to livestock, plus some extra fuel pellets, which will be used to power the plant itself, making it more self-sufficient.

PERSSON: Well, this is supposed to be working just up to the Copenhagen climate summit in December this year. And of course, we have the whole world looking upon Denmark at that time, so we will have a wonderful audience for inaugurate this factory here.

BRANCACCIO: In fact, the plan is to have all the delegates who come to the big summit in about a month driven in limos powered by bio-fuel. And let's not forget that the Danes have lots of experience with windpower —for lots of reasons. It's a country that, after all, juts out into the blustery North Sea. It was a physicist from Denmark, H.C. Oersted, who discovered the principle of induction that's in every electric generator. And Danish farmers were the first to put up electric windmills. Dong energy continues this tradition, although they have to be careful where they put them.

ELDRUP: People like wind power, but they don't like wind power close to where they are living. Therefore, we have been seeking ways to do—deal with this, the—the way we are doing it now is to build the wind power offshore.

BRANCACCIO: The company seems to be in a constant race to outdo itself with ever bigger off-shore wind farms.

ALMEGAARD: In the next 3 or 4 years we get 3 new big offshore parks. That means we can provide up to 30% of the power consumption in Denmark with wind power alone.

BRANCACCIO: And six weeks ago, this new farm opened for business, with 90 turbines generating power for 200 thousand homes. But, make no mistake, wind can be fickle.

ELDRUP: Sometimes it blows too much, actually more than consumption can absorb. Sometimes it's too little. And the new battery technologies, they make it possible that we can take the—wind power electricity, store it in a battery, use it when we like to use it. And that is actually also the reason why we started—to put our interest on electrical cars. Because if you have the batteries, why not put four wheels underneath them?

BRANCACCIO: Sure, why not? But doing it right and getting a whole country to embrace batteries-on-four-wheels takes some clever planning and even smarter technology. Here's the fellow with the plan. Shai Agassi, is a California-based social-entrepreneur, who says he's got a way to tame the fickleness of wind power and to mass market electric cars at the same time. Agassi is a software guy whose life changed four years ago when a question was put to him: what would he himself do to make the world a better place?

AGASSI: I think I missed the point that it was a conversational starter and not—a mid-life crisis—trigger. And—I just got it into my head that—we can solve the world's dependency on oil by—solving this question of—infrastructure for electric cars in the new business model.

BRANCACCIO: He ended up calling his company "better place," —what he wants to make the world. In the recipe for Denmark's energy transformation: clever innovation goes alongside government policy, and a population predisposed toward taking climate change seriously. Agassi's idea—if it can be made to work: store excess wind energy in lithium ion batteries, and use those batteries to power a new fleet of electric cars.

AGASSI: Wind comes at night, and it stops and goes. And so, they needed something that would balance this intermittent generation. And the best—solution component, if you want, that matches it, the yin-yang between windmills—for windmills, is—electric cars. And all the electricity that comes can come into the batteries. And so, putting batteries, putting the entire fleet of cars in Denmark on batteries will allow the country to put 750 windmills in—in the sea, and drive all the cars on these windmills. So you—you basically have a virtual oil field, 750 windmills, infrastructure batteries, and cars; and you get off oil.

BRANCACCIO: The plan is to build up a new infrastructure of charging stations that will keep the car fleet moving. Agassi leaned heavily on the auto industry to come up with a nice-enough, affordable electric car that could be mass produced. Renault Nissan rose to the occasion.

MOBERG: Every person will have access to a charge point at their home. Because most of the charging will be done at night. Which is also super important for the environment, because if it were just charged in—either in the morning, you know, either—in the afternoon, then we wouldn't have—use all the wind power that we have available at night. Then also at your work, where you work you'll have access to charge point there. And then wherever you go, whether it's airports, hotels, amusement park, cinema, shopping centers, then there'll be charge point in those public areas as well.

BRANCACCIO: The biggest rap on electric cars—and I know you're thinking of it —you can't taken them on long trips. Even though in America the average car trip is less than 10 miles, people worry about running out of juice the occasional times they do have to go further. Better place has come up with the technology to remedy that. Remember that robot? Say you want to drive 200 miles to grandma's. You put her address into the special GPS navigator. Under the plan for Denmark, the GPS will direct you to an electric "filling" station along the way, where a robot like this will reach under the electric car and swap out the battery in about ...40 seconds. Try filling your gas tank that fast. It's like exchanging a used propane tank for the barbecue. And why would you want to leave your precious battery at the swap station? You don't care, because while you own the electric car, Shai Agassi's company will own the battery. You don't even pay an electric bill. You'll pay Agassi for every kilometer you drive. Agassi will pay dong energy for the wind power. Not only that, but Denmark's electricity grid will eventually be able to extract power from the cars while they're plugged in but not being used.

AGASSI: There will be hours in the day where the utilities will actually be able to tap into our batteries to power shave the peaks. And so, at the worst times, the—the peaks of the peaks, they usually apply their—their most emitting, their most wasteful power plants. And with our batteries, they can stop using them. So we're actually going to even take off carbon from the grid.

BRANCACCIO: But putting in the charge points and battery changing stations is going to be expensive, and there's no guarantee of success.

ELDRUP: To some extent, it's a story about the hen and the egg. We have to—to do all these investments in the infrastructure in order the make it work. But—at the time of doing them, we don't know if there will be any customers. But if we don't do them, there won't be any customers. So we must do it.

BRANCACCIO: And the way that Denmark is working to bring in those customers is through tax policy. Let's remember that conventional cars in Denmark, by government design, are extremely expensive to run...you saw that 88 dollars we spent on 13 gallons of gasoline. $53 of those dollars went to the government in taxes. But it is not just the gas. When you go to buy a new car in Denmark, sales tax runs 25 percent. That's not all. New cars also get hit with another tax, a kind of environmental excise tax of—are you sitting down?—180 percent. Add the 25 percent sales tax on top and a $20,000 car suddenly costs $70-thousand dollars. The government's bet is that given a choice between a 70-thousand dollar gas-powered car or one that costs 25 grand, most will go for the cheaper electric option. The special tax status for electrics would stay in place not forever but for a few years. Last year Denmark took in over 2 billion dollars from that tax on gas-powered cars. In such a small country, that money goes a long way. And there are those who question whether it makes sense for the government to forgo so much cash to encourage electric cars in the fight against climate change.

LOMBORG: If we spend money poorly, it means we can't spend it smartly elsewhere.

BRANCACCIO: You're going to see a lot of this man as the media swarms across Copenhagen for the summit in a few weeks. He's Bjorn Lomborg, a controversial political scientist at the Copenhagen business school. Lomborg is one of the country's most prominent skeptics when it comes to the road Denmark is following on climate change.

LOMBORG: We could basically buy 18 new university sized hospitals in Denmark—for that amount of money.

BRANCACCIO: Is making electric cars widespread the best use of taxpayer money? Lomborg prefers what he sees as cheaper alternatives...such as buying carbon offsets...like paying people in Brazil not to cut down rain forests —saving carbon dioxide there to allow pollution here.

LOMBORG: We need to remember that there are constantly choices. Global warming is real, it is a man made problem, and it is one that we need to fix. But we're not fixing it very smartly. Actually, we're not really fixing it at all.

BRANCACCIO: We've heard the complaint, here in Denmark, that there are cheaper ways to keep carbon dioxide out of the atmosphere, that your approach with the electric cars is actually an expensive way to do that.

AGASSI: The thought process of, "We sh—we need the money for healthcare. So let them drive the cars that emit, the gases that cost healthcare costs," is the same as telling people, "Force them to smoke so that we can collect the taxes on the cigarettes so that we can pay for the hospital afterwards." That logic is convoluted in its design. And it is—the denier's logic, not the people who see the future. You build for the future. You don't protect the past.

BRANCACCIO: In his work to build for the future, Agassi also has agreements to bring electric cars to Israel, Australia and Hawaii, yes, our Hawaii. The first mass-produced all-electric cars are expected to arrive in Denmark in 2010. And Agassi wants his Denmark project to show the rest of the world that electric cars can be a mass market product...which would be the paradigm shifting achievement, if he and his Danish partners can pull it off. Of course, as innovative as this country is, Denmark is a small place with a population the same size as Minnesota's. And they don't call it Danish warming, they call it global warming. For carbon-dioxide-saving policies to be adopted on a wide scale will require global action. Which is on the agenda for the impending summit in Copenhagen that will be happening in the building right behind me. Dong energy's chief says it costs nothing to dump CO2 into the atmosphere, and that needs to change.

ELDRUP: If only one thing could come out of this Copenhagen climate meeting in December, I think the one most important thing would be to have a price, and I think a significant price on carbon because if you have a high price on carbon, that will divert the investments towards new technologies. And that is what is needed to make this transformation, which we must do.

BRANCACCIO: Amid the painstaking slog toward a climate change treaty, it's easy to forget the Danish example that fighting global warming can actually be fun, if you have the money. Look what we found, by chance, on a Copenhagen street.

PEDERSEN: There's just not a sound, and there's no vibrations. And then after that it's just the acceleration. We, I think we call it the Tesla smile 'cause when you push that pedal down it's just like: hmmm... It's, it's really, really fast.

BRANCACCIO: It's a Tesla. Made in California, U.S.A. the only one in northern Europe. The local Tesla rep happened to be in the shop buying diapers for his kid when our crew stumbled across this zero-to-sixty in less-than-4 seconds all-electric, plug-in beauty. Unlike the Renault-Nissan electric car designed for the everyman, this is a fancy roadster for fancy people...in the U.S. it costs, egads, about $110-thousand dollars. Imagine what it would cost in Denmark with the crazy taxes? But remember, it's an all electric car and it's exempt from the 180 percent tax. For the lucky Dane who can afford one, it is an earth-friendlier super car that will sell for about a third the normal price. And if power comes from the Danish wind, environmentalists say, so much the better. What about those moves to bring electric cars en masse to Denmark, to Israel, and to the great state of Hawaii & beyond? And what about the big climate change summit here in Copenhagen? Perhaps 170 countries will be represented but what are the chances that meeting can bring about real changes to the way we use energy in our own communities? Explore and learn more...on our website.

And that's it for NOW. From in front of a wind farm off of Copenhagen, Denmark, I'm David Brancaccio. We'll see you next week.

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