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On 29 June 2018, the government concluded a green energy agreement with all parties in the Danish parliament. The agreement contains ten initiatives to meet the government’s ambitions for Denmark to be a low-emission country in 2050.

The agreement covers the period 2020-2024 and is to expand Denmark’s international positions of strength with focus on renewable energy, energy optimisations, research and energy regulations. In connection with the agreement, significant investments will be made to meet the government’s objectives that Denmark will be a low-emission country independent of fossil fuel in 2050.

The energy agreement contains the following initiatives:

World class offshore wind turbines

Until 2030, three offshore wind turbine farms will be established in Denmark. These farms are expected to cause less visual inconvenience, and, at the same time, they have the potential to make major and cost-effective contributions to the green change-over in Denmark.

In line with the development of major offshore wind turbines, the parties agree that the municipal right to object must be expanded from eight to 15 km.

Renewable energy on market terms

Renewable energy must still be developed, and the support in this respect should be harmonised and simplified as far as possible in the future. The parties agree on the following:

  • To reserve DKK 4.2 billion for technology neutral solar cells, land wind, near-shore offshore wind power and wave and water power in the period 2020-2024
  • To establish a pool of DKK 240 million each year for 20 years to develop biogas and other green gasses for upgrading, transportation and industrial procedures
  • To reserve DKK 5.4 million for a bioenergy task force in 2019-2021, which is to review how to improve the efficiency of biogas and the sustainability of various kinds of bioenergy. A part of this pool will be reserved for organic biogas.

In addition, the parties agree that the number of onshore wind turbines must be more than halved. The Energy Agency will prepare a plan concerning the reduction of onshore wind turbines and make a status every second year. If the reduction does not follow the plan, new onshore wind projects will be postponed until the number of onshore wind turbines have been reduced by a sufficient number. The parties recognise that it will be necessary for the municipalities to be able to provide licences to install up-to-date wind turbines under current practice.

Further, the conditions of the affected land owners must be improved. Consequently, the requirement for distance when installing wind turbines should be reviewed to assess whether the requirement may be changed. A sales option scheme will also be introduced based on the model used in the test centres at Østerild and Høvsøre.

Ease of electricity charges and change of the rules on surplus heat

The parties agree that it is necessary to ease the energy charges to make more consumers choose green solutions. The charges on electric heating and general electricity will therefore be reduced, and the rules on surplus heat will be changed.

Targeted energy-saving efforts

The energy-saving efforts will generally be modernised as they will be subject to competition and targeted areas where optimisations may be of more use. The parties agree that the present energy-saving scheme is not going to be extended when it expires in 2021, but a market-based contribution pool will be introduced instead in 2021-2024 based on tender procedures.

Further, a loan pool of DKK 100 million each year from 2021-2024 will be introduced, which is to finance the energy restorations at municipally and regionally owned or operated buildings. The pool will not be a part of the municipalities’ plant budget.

Modernisation of the heat sector and expiry of the basic amount

The heat sector is going to be modernised, and central heating plants and consumers will be free to decide on future investments. The connection duty/duty to remain connected to a supply plant will be abolished from 1 January 2019. The parties further agree to abolish the connection duty/duty to remain connected to a supply plant, to limit the consumers’ price increases due to the size of the basic amount and to promote conversion to heat pumps as part of the future solutions.

To ensure the latter, heat pumps will be subject to the same rules applying to recognition and withdrawal of surplus which apply today to industrial surplus heat, geothermal energy, solar heat and biogas or biomass plants.

In addition, a number of initiatives will be taken to promote the development of the remote cooling sector, for instance better opportunities in connection with operation of remote cooling projects across municipal borders.

Strengthened energy and climate research

The state funds for research, development and demonstration of energy technology are increased to DKK 580 million in 2020. After 2020, the funds will be increased during the terms of the agreement to DKK 1 billion in 2024.

Other initiatives

The parties further agree on the following:

  • To increase export promotion within the energy sector
  • To create a smart and flexible digital energy system
  • To reserve a pool of DKK 100 million each year in 2020-2024 for the purpose of supporting green solutions within collective and individual transportation
  • To reserve DKK 400 million in 2025 and DKK 500 million each year from 2026 for additional initiatives concerning promotion of renewable energy
  • To reserve a pool for administrative additional costs. The agreement covers the period 2020-2024 and is to expand Denmark’s international positions of strength with focus on renewable energy, energy optimisations, research and energy regulations. In connection with the agreement, significant investments will be made to meet the government’s objectives that Denmark will be a low-emission country independent of fossil fuel in 2050.

contacts

Line Markert

Partner

Søren Hornbæk Svendsen

Partner

Eigil Worm

Senior Attorney

Rene Frisdahl Jensen

Senior Attorney