New Danish energy minister Dan Jørgensen has reallocated DKK 339 million (€45.4 million) from the budget set aside for renewable energy auctions to other initiatives reducing the country’s emissions by 70% by 2030.
"We need to use the money wisely and where it is needed most," said Jørgensen.
"The expansion of solar and onshore wind can now be done with very little support and hopefully soon completely without support.
"So it makes sense to move some of the money that was set aside for assistance to where they can really make a difference," Jørgensen added.
The original budget for the next renewables in auction was roughly DKK 597 million (€80 million), according to lobby group Wind Denmark. The next technology-neutral auction will now have a budget of around DKK 249 million (€33.35 million).
Jan Hylleberg, the CEO, said the government’s move will damage investor confidence.
"It is totally unacceptable for the sector to shave the pool at such a short notice," he said.
"The sector has been working on projects since 2017, and with this decision, the government is undermining the confidence that the tender plans and agreements that are generally decided are also implemented. It's a bad start for the new government.
"I acknowledge that the government now prioritises climate law and action plans, but it is strange… to slow down so significantly and remove money for wind and solar, which are by far the cheapest technologies that we need to reach CO2 neutrality targets by 2050.
"Investor security is extremely crucial in the current competitive situation, and I must urge the government to restore investor confidence as soon as possible," said Hylleberg.
The Danish energy ministry argued the 2018 technology-neutral auctions had a budget of DKK 254 million (€34 million), which supported five-times more wind and solar capacity than had been expected.