Government proposal: Energy must be more green and cheaper

Recently, the government made a new energy proposal aiming at minimum 50 % renewable energy in 2030 and cheaper energy to the citizens and the community. The proposal is to ensure that Denmark maintains its leading position in the world within renewable energy and reduces costs at the same time.

The proposal contains a number of specific initiatives for the expansion of renewable energy at approx. DKK 15 billion and a total relaxation of energy taxes at approx. 3.5 billion in 2025. The most important initiatives are:

EXPANSION OF RENEWABLE ENERGY

DKK 4.2 billion is reserved for open tender procedures in connection with the expansion of renewable energy such as onshore wind turbines and solar energy in 2020-2024. The level of grants must be aligned so that the most cost-effective energy sources gain ground. Also, approx. 4 billion are reserved over 20 years to ensure a continued expansion of biogas and other green gasses.

OFFSHORE WIND FARMS

Tenders will be invited for Denmark's largest offshore wind farm i in 2021. The farm will have a capacity of up to 800MW. The farm is budgeted at DKK 3.7 billion in state aid. The municipal right to object is expanded from 8 km to 15 km from the coast.

LOWER TAXES AND PROMOTION OF SURPLUS HEAT

Electricity and electric heating will be subject to a total relaxation of approx. DKK 3.5 billion in 2025, and DKK 100 million will be reserved for better exploitation of surplus heat.

COMPETITION AND TARGETED ENERGY-SAVING EFFORTS

A tender pool will be established of DKK 400 million each year for energy-saving efforts in 2021-2024. The pool will be targeted at the businesses with the largest cost saving potential. At the same time, the consumers will be alleviated burdens of DKK 1.5 billion each year by abolishing the present energy-saving scheme.

MODERNISATION OF THE HEAT SECTOR

The government proposes a number of initiatives within the heat sector:

  • Abolishment of production obligations by way of cogeneration demands and fuel obligations within the small district heating areas from 1 January 2019 and, in the future, within medium-sized district heating areas, if analyses of the security of electricity supply the prove that this is possible.
  • Abolishment of production obligations within major district heating areas no later than 2030.
  • A freeze on new consumer obligations from 1 January 2019. Existing consumer obligations will be abolished four years after the abolishment of the production obligations within an area.
  • Reservation of DKK 540 million in 2019-2023 to meet the consequential effects of the abolishment of the basic amount.
  • Free selection of technology within the remote cooling sector and better opportunities in connection with operation of remote cooling projects across municipal borders.

SMART ENERGY

The government proposes that state funds for development and demonstration of energy technology are increased to DKK 580 million in 2020. DKK 60 million must be earmarked for smart energy. In 2020, an action plan concerning smart energy must be published focusing on the use of data and digitalisation. Further, the export scheme will be increased by DKK 175 million until 2024.

CONTINUED EXPLORATION OF OIL AND GAS RESOURCES

Initiation of the 8th licensing round for the North Sea mid-2018 to ensure new investments in exploration. It is the government’s ambition that, many years from now, licensing rounds will also be held for the North Sea at fixed intervals of 2-3 years.

contacts

Line Markert

Partner

Klavs Gravesen

Partner

Søren Hornbæk Svendsen

Partner

Rene Frisdahl Jensen

Senior Attorney