Danish power bill set to boost offshore wind

Competitive licensing, green certificates, to help meet target of 4000MW capacity by 2030

The Danish government is planning to foster a huge increase in the amount of electricity generated from offshore wind energy by combining competitive bidding for generation licences with a "green certificate" market for renewable energy. The proposals are contained in a draft bill on the liberalisation of the electricity market which was published last week and will be put before parliament on Friday.

Under the proposed system, investors will be invited to bid for licences to build offshore wind turbines in a competitive tendering process which will take into account several aspects of the bid, including the nature of the generation and transmission infrastructure to be built. According to the Danish energy agency, licences will be offered either for quantities of electricity production capacity or for the exploitation of specific geographical areas, in a similar way to the allocation of oil-producing sectors in the North Sea.

Electricity will then be sold at market prices but, in common with other renewable energy producers, turbine operators will be able to sell "green certificates" for each unit of electricity produced to electricity supply companies. The government will be able to vary the number of certificates that the supply companies must purchase, thus influencing their market price and the corresponding level of "indirect subsidy" to producers.

The government hopes the strategy will boost investment in offshore wind capacity to meet a target of 4000MW installed capacity by 2030. Current capacity is limited to two small offshore wind farms of negligible output used for development purposes, but within nine years a further 150MW will be built in each of five marine sectors to explore the "environmental, technical and economic perspectives" of their potential for exploitation. The government's overall target for wind power is to have a total capacity of 5500MW providing 50% of the country's electricity needs by 2030.

The proposed system marks a departure from the current system of supporting renewable energy in Denmark, where fixed premium prices are available to producers. A spokesperson for the Danish Wind Turbine Manufacturers' Association welcomed the plans, telling ENDS Daily today that the licensing system allied to green certificates was the "only real way" to meet Danish targets for the offshore wind sector.

Follow Up:
Danish energy agency, tel: +45 33 92 67 00; Danish Wind Turbine Manufacturers' Association, tel: +45 33 73 03 30.

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