EC approves Danish solar and wind subsidy schemes

DENMARK: The European Commission (EC) has approved three different schemes to subsidise electricity production from wind and solar power in Denmark for the rest of this year and 2019.

by Liz Gyekye 21 August 2018

The new energy agreement sets out technology-neutral auctions (pic: Hofor)

The EU executive gave the proposals a green light on Friday under the bloc’s state aid rules.

The schemes include a multi-technology tender scheme for onshore and offshore wind turbines and solar installations, with a budget of €112m — projects will be selected through two tenders in 2018 and 2019 and will receive support in the form of a premium on top of the market price.

Another scheme supports onshore wind for test and demonstration projects outside the two national test centres for large turbines, with an expected budget of €27m and a transitional aid initiative for onshore wind, with a €5m budget.

The schemes aim to help Denmark achieve a 50% renewables share in its energy mix by 2030 and to make the country independent of fossil fuels by 2050.

The aid for the three schemes will be granted for a period of 20 years after the installations are connected to the grid.  The renewable support schemes are financed from the state budget.

In a statement, the Commission said the three Danish schemes would encourage the development of renewable energy technologies in line with EU state aid rules.

The EU executive also concluded the measures will help Denmark boost the share of electricity produced from renewable energy sources, in line with the environmental objectives of the EU, while any distortion of competition caused by the state support is minimised.

In June, Denmark’s parliament approved plans for a 2030 ‘Clean Energy Plan’, which aimed to boost wind and solar power to help decarbonise the country’s power generation.

The plan also envisages Denmark phasing out its coal-fired power stations by 2030.

Under the compromise agreements that have helped shape Denmark’s 2030 energy plan, taxes on electricity companies have been cut, a move the government says will free up investment in green energy.

Commenting in June, Denmark’s minister for finance Kristian Jensen said the plan was "broad and ambitious" and would ensure "pace and ambition in the realisation of the green transition".

Denmark’s energy minister Lars Christian Lilleholt said the government’s plan would help Denmark become a "pioneer country in energy and climate".