Solar & Wind To Compete In Danish Auctions

Denmark is set to hold joint auctions for solar and wind power technologies starting 2020, which are part of a new energy policy which is titled Energi-til et grønt Danmark (Energy for a green Denmark).

For this procurement arrangement from wind and solar power, the government has allocated 4.2 billion DKK ($682 million).

The Danish Energy Agency had announced in December 2017 that it plans to conduct joint tenders for wind and solar PV in 2018-2019. The total budget of the tenders is slated to be 1.01 billion DKK ($164.9 million). A first technology neutral tender is expected to be announced in September 2018 with a bidding deadline in November. The agency recently issued draft tender conditions for PV projects of less than 1 MW (see Denmark Planning PV Tender Below 1 MW).

The energy policy reiterates the government’s stance on having 50% share of renewable energy by 2030, when it will make efforts to phase out the use of coal. By 2050, the country wants to be completely independent of fossil fuels.

 Currently, Denmark offers 35 different subsidy types for renewable energy technologies, which the government plans to bring down to four to six new schemes. As part of this subsidy scheme consolidation, Denmark strive to take down the average incentives from 0.22 DKK ($0.036) per to 0.10 DKK ($0.016) per kWh.

The government envisages investment of 15 billion DKK ($2.44 billion) to implement the policy between 2020 and 2024. This includes 4.2 billion DKK ($682 billion) for competitive procurement. Post 2024, every additional year 500 million DKK ($81.2 million) will be allocated for the program. If needed, new initiatives may also be planned to achieve the goal of a 50% share of renewable energy.

The Danish Energy Commission had recommended phasing out subsidies for renewable energy in a report it submitted to Energy Minister Lilleholt in 2017 (see Denmark Suggests RE Subsidies Phase Out).

“The government’s long-term climate target is that Denmark must be a low-emission society by 2050, which does not emit greenhouse gases and is completely independent of fossil fuels such as coal, gas and oil. On the way to this, we must be able to cover at least half of Denmark’s energy demand for renewable energy by 2030,” said Minister for Energy, Utilities and Climate Lars Lilleholt.

The subsidy system doesn’t go beyond 2030, as the government wants to run its energy system sans subsidies in the long term. “Therefore, we should not plan the energy policy in detail in the long run and bind us to a concrete development path if it does not make sense financially or in relation to developments in the rest of the world,” stated the government. Post 2024, it will review and evaluate the policy with an eye towards the future.

According to the Danish Energy Agency, the share of renewables in the total energy mix in 2016 was 29.1%. It grew to 32.3% in 2017.