- Energy Commission of Denmark has suggested phasing out subsidies for renewable energy so as to make them competitively viable
- In transition period, subsidy allocation must be based on market based tendering procedures
- Deployment of renewable energy can be subsidized, suggests the commission, but it should be technology neutral
Denmark’s Energy Commission has recommended phasing out subsidies for renewable energy at the same rate as it becomes competitively viable.
In a report submitted to Minister for Energy, Utilities and Climate Lars Lilleholt, the Energy Commission has suggested to start with an ambitious, long-term energy policy in 2020 to be able to reach its goal of a low-emissions society by 2050.
In the transitional period, subsidy allocation must be based on market based tendering procedures. The recommendation is to subsidize the deployment of renewable energy on a principle of technology neutrality rather than by individual renewable energy technology. “The market must be used to achieve lower prices, and different renewable energy technologies must compete with each other,” states the report.
The government seems all for it as Minister Lilleholt stated, “I am delighted that the Energy Commission states unequivocally that there is no contradiction between being ambitious and focusing on cost. In fact, quite the opposite. We need to adjust our energy and climate policies in order to gain as much green transition for our expenses as possible. That’s common sense, and I think that the commission has given us some excellent, clear advice as to how we can take the next smart step in Denmark’s green transition.”
Other recommendations include setting up a smart energy system that can integrate renewable energy in the energy system, maintain a high level of security of supply, and ensure the basis for new growth areas for the country’s export of technology. A strengthening of the EU ETS system should take place as well.
The report is aimed at helping the government develop a new energy agreement that will be presented in the autumn of 2017.
The country aims to have 50% share of renewables in its final energy consumption by 2030.
The Energy Commission’s report can be downloaded on the ministry’s website.