New Bill introducing rules on investment subsidies for demonstration wind turbines and PtX
On 25 January 2023, the Minister for Climate, Energy and Utilities presented Bill no. L 23 to amend the Danish Act on Renewable Energy (lov om fremme af vedvarende energi). The bill, among other things, amends the rules on investment subsidy schemes for demonstration wind turbines and on the government pool of funds subsidising Power-to-X.
The bill includes the following elements:
- Investment subsidy schemes for demonstration wind turbines (demo projects): The Bill authorises the Minister to establish an investment subsidy scheme for demonstration onshore wind turbines for the years 2023 and 2024 of DKK 162.7 million (2020 prices). In addition, the Bill authorises the Minister to establish an investment subsidy scheme for experimental offshore wind turbines of DKK 100 million for testing offshore wind turbines in 2024.
- Government pool of funds subsidising Power-to-X: The Bill implies that an auction can be held for subsidies for the use of chemical fuels and products from electricity (Power-to-X). The subsidy may – according to the Bill – be granted for the use of a wide range of chemical fuels and products based on electricity, e.g. hydrogen by electrolysis, or its further conversion into other products such as ammonia, methanol, jet fuel, methane or chemical fertilizers.
- The loss-of-value scheme and PV plants not grid connected: The Bill adjusts the scope of application of the RE schemes (the loss-of-value scheme, the sales option scheme, the RE bonus scheme, green pool and the guarantee fund) in relation to RE plants that are not connected to the grid (RE plants in “island operation”). Wind turbines, wave power plants and hydropower plants in island operation are covered by the renewable energy schemes, but as far as PV plants are concerned, the scope of application of the schemes is limited to PV plants connected to the grid. Since it has not been the intention to exempt PV plants in island operation from the schemes, such PV plants are, pursuant to the Bill, to be explicitly covered by the schemes.
The Bill also provides for two clarifications:
- Supervision of permits for offshore energy projects: The Bill clarifies that the Minister of Climate, Energy and Utilities may set out conditions for supervision of a) preliminary study permits, b) establishment permits and c) electricity production permits as well as supervise compliance with the conditions laid down in the permits by inserting an explicit authority for this in the Act on the Promotion of Renewable Energy. The provisions of the Act on the Promotion of Renewable Energy make it possible for the Minister of Climate, Energy and Utilities to lay down terms in connection with the issuance of preliminary study permits, establishment permits and electricity production permits.
- Set-off against price supplements for the production of electricity using biogas or gasification gas produced from biomass: It is specified that the Danish Energy Agency may effect set-off against price supplements for the production of electricity using biogas or gasification gas produced from biomass.
The first parliamentary reading of the Bill was on 7 February 2023.
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