Investing In Denmark's Cleantech Revolution

Includes: NVO, VWDRY
by: Investment U

By Sam Hopkins

Danish politician Lykke Friis says Danes aren't "just hippies." She's right, too. They're practical. Denmark has just been named the top cleantech country on the planet by the World Wildlife Fund. Its startup cleantech companies have big plans and plenty of progress to show already for the money flowing into them from the government.

Denmark is also setting utility-scale renewable energy targets. It recently announced the goal of running the entire country on renewables by 2050. That's progressive! But make no mistake, this move isn't just political or idealistic.

"No matter what we do, we will have an increase in the price of energy, simply because people in India and China want to have a car, want to travel," Friis emphasizes.

The oil supply shocks of a generation ago hit Denmark hard, and leaders don't want to get caught with their pants down again. Just by the end of this decade, Denmark aims to grab a third of its energy from a blend of mostly wind power and solar power. After all, those are the usual suspects when it comes to getting power from renewables.

And technology is giving Denmark new options all the time. As you look for investments that let you profit from Denmark's leading clean energy economy, you should keep your options open, too. You have to think about more than pure plays. Just follow the lead of the biggest money in Denmark…

Danske Bank is the country's largest bank. When markets were rough a couple of years back, it encouraged customers to diversify around a central theme of sustainability. That means buying into companies that provide energy-efficient technology and infrastructure. And it means looking at how cleantech is affecting Danish companies across the spectrum.

Pharmaceutical company Novo Nordisk (NYSE:NVO) has been named the most sustainable company in the world by a Canadian group.

Danske Bank knocked its own carbon footprint to zero by reducing CO2 emissions from operations and investing in four verified carbon credit projects. The bank is also bullish on Danish company Vestas (OTCPK:VWDRY), the top wind turbine maker on the planet.

But Danish kroners (the country isn't technically in the Eurozone) are also flowing into biomass like corn waste, wheat straw, sugarcane bagasse, wood pulp and municipal solid waste. At special power plants, what would be trash can be turned into electricity.

Again, you can follow the big money from Copenhagen… Denmark's state utility Dong Energy is ponying up $795 million to retrofit three of its coal- and gas-fired power stations. Those fossil fuel relics will generate 1,000 megawatts of heat and electricity from wood pellets by the time the switch is complete.

There's more you can do with biomass - when they're turned into cellulosic ethanol, those same agricultural wastes can add to or even replace gasoline as transportation fuel. One of the most promising homegrown companies working on biomass-to-fuel technology is Novozymes.

Novozymes is an industrial biotechnology company that specializes in making enzymes. One Novozymes system enables distillers to reach 2% to 3% higher alcohol yields and decrease the time fermentation takes by 10% to 20%. Any company that speeds up the process of fermenting alcohol has to have plenty of friends! That goes for the ethanol industry in addition to booze and beer, of course…

A lot of investors will turn to Denmark over the coming years for clean energy returns. The smart ones will look below the surface to the true nationwide impact of clean energy on many companies, not just pure plays.