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Denmark

Denmark

Owners of small turbines worried about subsidy loss

The price of wind in Denmark after the bells toll in year 2000 is a major concern for thousands of owners of smaller wind turbines, reports Naturlig Energi, the magazine of the turbine owners association. From January 1, the rules for wind turbine subsidies in the new Electricity Reform Act go into effect, along with a transitional system away from subsidies and towards a competitive market for green electricity (Windpower Monthly, July 1999). Last month, the Danish power industry got its first taste of a liberalised electricity market when the Nordic power bourse NordPool was opened for business in the western part of the country. Full operation in Denmark is to begin by next spring. On opening day, the average price for a kilowatt hour of electricity in Northern Europe was DKK 0.0763 (EUR 0.0103); in west Denmark -- where a high concentration of the country's wind turbines churn power -- the price was DKK 0.115/kWh. According to NordPool's Anders Plejdrup Houmøller, heavy winter snows last year throughout Europe have created a lot of cheap hydro power. Owners of wind turbines up to 100 kW in size today receive a total of DKK 0.60/kWh in subsidised payment for their power. After January 1, if their machine is more than ten years old and has used up all of its full-load hours allowance under the new law, they lose a DKK 0.17/kWh subsidy. What remains is a DKK 0.10/kWh subsidy -- a refund of Denmark's CO2 tax on energy -- plus at least DKK 0.10/kWh from sales of green credits to consumers or utilities, plus the money utilities agree to pay for the wind power on the open market. With the limited experience from NordPool so far, the owners association is warning that utilities might pay just DKK 0.08/kWh for wind. The minimum total payment would thus be just DKK 0.28/kWh. The association says it can cost between DKK 0.15-0.45/kWh to just maintain an old machine. "We'll be looking more closely at these details when we work out the statutory instrument in the autumn," says Kai Worsaae of the Danish Energy Agency. Under discussionis the size of the fine to be imposed on electricity consumers if they do not meet the government's minimum standard for renewables in the supply mix. A fine of DKK 0.27/kWh has been mentioned, which together with the DKK 0.10/kWh energy tax refund and a minimum DKK 0.10 kWh for green credits would provide DKK 0.47/kWh as a more or less guaranteed basic payment. Green credits could well attract higher prices, however.

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