30 March 2017

The European Commission: Aid to construction of Kriegers Flak is legal    

The Commission has approved the Danish state aid to the offshore wind turbine project Kriegers Flak as the project will contribute to an increased use of renewable energy in Denmark. The Commission concludes that this consideration is more important that the potentially distorting competition on the market resulting from the state aid.

The purpose of the EU state aid rules is to ensure that the member states do not distort competition within the EU with their aid, and state aid is therefore generally illegal.

ENVIRONMENTAL AND CLIMATE TARGETS WERE MORE IMPORTANT THAN COMPETITION CONSIDERATIONS

If the state aid contributes to the member states achieving their energy and climate targets, the aid may, however, be granted for environmental protection and energy. But there is one condition - that the aid does not disproportionately distort competition on the market. 

The Commission made this assessment in relation to the Danish state aid to Kriegers Flak. The Commission found that notwithstanding the fact that the state aid to Kriegers Flak may distort competition on the electricity market, it is the Commission's opinion that the object to produce renewable energy and reduce the carbon dioxide emissions is more important than the consideration for the potentially distorting competition, which other electricity manufacturers within the EU may experience. 

In connection with the approval, the European Commissioner Margrethe Vestager said: "The Kriegers Flak offshore wind farm will help to cut carbon dioxide emissions while the support is carefully designed to avoid distorting competition in electricity markets. I'm glad to be able to approve state support for this project".

KRIEGERS FLAK

In 2015, the DEA carried out a tender procedure concerning construction and operation of a future offshore wind turbine project in the Danish part of the Baltic - Kriegers Flak. In addition to the offshore wind turbine park, a new connection is to be made with the effect that Zealand is connected with Germany via the Offshore Wind Turbine Farm Kriegers Flak and two other German offshore wind turbine farms. This connection will increase the possibility of exchanging electricity between Denmark and Germany. In 2016, the project was awarded to the Swedish company Vattenfall, and it is expected to be ready on 31 December 2021.

The project will receive state aid which Denmark has registered to the Commission. In addition to the design, construction and operation of the project, the aid will also consist of a supplement to the electricity price on the European power market Nord-Pool. The total state aid to Kriegers Flak is expected to be DKK 3.5 billion covering the period from 2019-2032.

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