In connection with the EU Commission's consideration of the government's applications for state subsidies to solar cells and wind power, the Commission questioned the legality of the Danish PSO system in the spring. However, on 30 October 2014, the Minister for Climate, Energy and Building, Rasmus Helveg Petersen, published that the Commission had now accepted a temporary solution for the Danish PSO system.

DOUBT ABOUT THE PSO SYSTEM'S LEGALITY

 The Commission raised doubt about the PSO system as the system implies that a PSO charge is to be paid based on all electricity consumed in Denmark, whereas only domestically produced electricity has access to the support financed by the PSO system.

The Commission informed the Danish government that the preliminary evaluation is that the PSO financing may be contrary to the EU prohibition against discriminatory charges. As a consequence of the above, it has not been possible to initiate the Danish subsidy schemes that have been considered by the Commission under the state subsidy rules.

BREAKTHROUGH

 On 30 October 2014, the Minister issued a press release stating that the Commission had now approved a temporary solution with the result that the Danish PSO system is in accordance with EU law.

The solution covering 2015-2016 implies that electricity produced abroad will have access to PSO financed aid. Initially, this will be a trial arrangement offering 20 MW solar cells in 2015-2016. Of these, foreign producers will be able to bid on max. 2.4 MW over the two-year period.

CONSEQUENCES OF THE COMMISSION'S APPROVAL

  The Commission's approval of this solution implies that most of the adopted subsidy schemes for solar and wind power, including solar cell aid adopted by Act no. 900 of 4 July 2013, may now come into force. The general PSO easements agreed in the government's growth plan in the spring of 2014 may be implemented at the same time.

The Minister has therefore introduced a bill proposing abolishment of gas PSO, general PSO easements for the business community and targeted easements for special electricity intensive businesses. The solution agreed with the Commission only covers the period 2015-2016, and a more long-term solution must be found.

contacts

Søren Hornbæk Svendsen

Partner

Rene Frisdahl Jensen

Specialist Attorney

Anne-Sophie Kämpf Svane

Attorney