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Denmark

Denmark

Wind lobby calls for postponement

The official launch date of January 1, 2000 is still in place for Denmark's wind market reform, but with only 20 working days to go the energy agency had still not released details of how the complex two-part trading system for green electricity and green power certificates will work. Late last month the combined forces of the country's wind lobby-the wind turbine manufacturers and the wind turbine owners-were calling for the reform to be postponed for a year. "The system does not exist anywhere else in the world and nobody knows how the system will function," say Flemming Tranæs, chairman of the turbine owners association, and Karl Gustav Nielsen, wind industry chairman, in a joint statement. "Danish wind turbine owners and wind turbine manufacturers are cut off from preparing themselves for what will happen when the town hall clock strikes midnight for the last time this millennium."

The energy agency's Kai Worsaae admits that the new law will probably not come into force until later in the new year. But he is anxious for it to start. "The whole thing will not be completely finished in year 2000, but we can at least get going," Worsaae says. Under the law, wind power producers will receive payment both from sales of their electricity and sales of green certificates on an as yet non-existent market (page 34). For the past 15 years payment for wind power has been set at 85% of the selling price of electricity. The government's aim with the new system is to establish a long term market for wind power which complies with EU internal market and competition rules.

But all the proposal has achieved so far is to throw the wind business into a state of "unhappy ignorance," say Tranæs and Nielsen. "If attempts are made to push a reform through in haste to reach the January 1, 2000, deadline, the risk is that the green certificate market will collapse," they add. "It is time for partners to the reform agreement to admit that the schedule is too tight." Without a postponement the system will at best be expensive and at worst unusable, they conclude. Until it is ready for use, they advocate retaining the existing payment system.

Under the current uncertainty, with nobody knowing how and if wind power payments will be made after January 1, financing new projects is impossible, say Tranæs and Nielsen. Without wind energy, Denmark cannot meet its Kyoto commitments. The electricity reform is tightly meshed with the country's strategy for reduction of C02 emissions. In Denmark the cheapest way of meeting emission reduction goals is through development of more wind plant.

Part of the delay in setting up the market mechanism is due to the energy agency's rejection of a report commissioned from global accountants PriceWaterhouseCoopers (PWC) on how to structure a green power market. The report met with massive criticism on all fronts except the utility sector, with the wind industry branding it as one-sided and weak in its economic analyses (Windpower Monthly, November 1999). A new report from the energy agency is now awaited.

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