The Danish government's new reform proposal "Denmark can do more II" is intended to accelerate the green transition so that Denmark will be independent of Russian gas as soon as possible. We take a look at the initiatives to be expected for the establishment of new RE facilities.
The government's reform proposal "Denmark can do more II" suggests that Denmark will be a net exporter of green energy in 2030. In its status report of 2022, the Danish Council on Climate Change concludes that for Demark to avoid becoming a net importer of electricity, electricity will be needed from renewable energy sources in the years up to 2030. Consequently, if the government's ambition is to be realised, massive investments in renewable energy are required in the years up to 2030.
How does the government suggest accelerating investments in new RE capacity?
The following is an overview of measures and instruments suggested by the government so far in support of the expansion of renewable energy in the short term up to 2030.
- Solar cells and onshore wind turbines will be established without subsidies.
- The government will prepare a catalogue of specific initiatives supporting a fourfold increase in the total production from solar cells and onshore wind turbines up to 2030. Initiatives will, among other things, ensure more expedient case administration, and the government will be in dialogue with the municipalities.
- Changes in relevant legislation will facilitate the balancing of considerations for environment, climate and energy supply. The government supports the EU Commission's recommendation regarding expedient approval of climate and energy projects, expected in May.
- RE facilities and infrastructure will be considered of general public importance and important to public safety.
- Tenders for additional 1-4 GW offshore wind farms before the end of 2030, presuming that the offshore wind farms do not have a negative impact on government finances during the project period, and that the power grid has the required capacity.
- Tenders for support to green gas will be accelerated.
- More initiatives will be launched to increase the production of green gas – the government's ambition is 100% green gas in households, enterprises, etc., in 2030.
What will happen to producer tariffs from 2023?
Producer tariffs, to be introduced in 2023, will involve significant added costs for those who establish power-producing RE facilities. The industry has warned that producer tariffs are an significant barrier for the further expansion of solar energy and onshore wind.
The government's reform proposal includes no specific suggestions for halting producer tariffs. However, the government has not ruled out considering producer tariffs when preparing the catalogue of specific initiatives for the expansion of solar energy and onshore wind, expected to be presented this summer.
Comments by Bech-Bruun
In recent years we have seen marked growth in the interest in renewable energy in Denmark. However, lately the establishment of new solar cells and onshore wind turbines has slowed down. We have seen how environmental considerations, sluggish case administration and uncertainty as to coming producer tariffs can block or stop solar projects and onshore wind projects.
Generally, we are seeing great interest from enterprises in taking part in tenders for offshore wind farms in Denmark. However, the tenders for offshore wind farms depend on political decisions for the state to invite tenders for more offshore wind farm capacity.
Bech-Bruun is pleased with the governments proposed reforms for the expansion of renewable energy, onshore and offshore. We hope the proposed reforms will result in measures that underpin investments in new RE capacity.
We follow negotiations closely, as we will when the government presents an independent proposal on green power before the summer holidays, a proposal that will include renewable energy, onshore as well as offshore.
Bech-Bruun is among the leading advisers in the area of renewable energy. Our specialists are internationally recognised for their significant industry knowledge and advise on all legal aspects of the energy area. With our long-standing experience from major utility projects, complex transactions in the solar and wind industries and extensive contracts, we have built unique market insight to the benefit of our clients' businesses. And with our position at the cutting-edge of the green transition, including multiple carbon capture projects, we provide advice to our clients on the green solutions of the future.