Green light for Danish renewables support plan

Proposed tradable green certificate system rated in line with European state aids rules

Denmark's planned system of tradable green certificates to support growth in renewable electricity will be able to take effect in 2002, following approval under EU state aids rules announced today by the European Commission. The Danish government wants to use the new system to approximately double the proportion of electricity generated from renewable sources to 20% by 2003.

Plans to replace current direct subsidies to renewable energy producers with tradable green certificates were first outlined last year in a law reforming national electricity law and implementing EU market liberalisation rules (ENDS Daily 31 May 1999). This spring, the government pledged to open a central exchange for trading in renewable energy green certificates, subject to EU state aids approval (ENDS Daily 14 March).

In its announcement today, the European Commission stressed that "the benefit" of green certificates as opposed to so-called "feed in" support systems of fixed prices and direct state subsidies is that they give producers an incentive to reduce their production costs. Following a prolonged political struggle, the Commission declined to favour particular support approaches in the draft EU renewable energy directive proposed this spring (ENDS Daily 10 May). Green certificates remain a candidate for a future harmonised EU system, however.

Follow Up:
European Commission, tel: +32 2 299 1111, and press release.

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