Developer accused of deliberate fraud -- Scandal in Denmark

Fifteen-hundred expectant owners of several hundred megawatt of projected new wind plant in Denmark are caught in a web of bureaucracy following accusations of swindle and fraud levelled by a small citizens' action group. The group says the wind projects concerned are using a loophole in the regulations governing the Danish wind market's transition to green certificate trading to gain a higher rate of payment for their output than they are eligible for. The claims made national newspaper headlines in early September.

The Danish Wind Turbine Owners Association says the scandal has the appearance of a misunderstanding, which through a well orchestrated press campaign has been blown out of all proportion. The 1500 budding owners all have stakes in a series of wind turbine co-operatives set up at the end of last year to take advantage of the fixed price for wind output then available, DKK 0.60/kWh. Under Denmark's market liberalisation framework, the price drops to DKK 0.43/kWh for wind projects initiated after January 1, 2000 (Windpower Monthly, October 2000).

A leading player in the confusion is developer Jysk Vindkraft, which on December 14, 1999, established no less than 30 new wind co-operatives, selling shares in them in the months that followed to the 1500 stake-holders. By also placing turbine orders before December 31, including a DKK 250 million order to NEG Micon, Jysk Vindkraft secured the existing DKK 0.60/kWh for all projects. NEG Micon was then in severe financial trouble.

According to both Jysk Vindkraft and the Danish energy agency, the agency has been aware of the co-operative's procedure from the outset. The agency's Inga Thorup Madsen also confirms that Jysk Vindkraft's utilisation of the regulations is technically within the rules.

These assurances, however, did not prevent claims by the "Neighbours to Wind Turbines" group from being widely aired in the press and media. Jysk Vindkraft is "swindling and defrauding" electricity customers according to group chairman Jan Bødker, quoted in the Nordjyske Stiftstidende newspaper. Vice chairman Claus Bunk Pedersen calls it "a deliberate attempt to circumnavigate the law," according to newspaper Morsø Folkeblad.

The citizens group has reported Jysk Vindkraft to the police for its actions. As a result a number of local utilities refused to connect around 100 of the involved projects to the grid. Furthermore, the Danish Electricity Association has suggested that Jysk Vindkraft "backdated" the involved contracts, an accusation which caused the developer to immediately threaten the association with a court case.

Auken rules

Last month, energy and environment minister Svend Auken stepped into the fray and together with the energy agency ordered that all involved wind plant be connected to the grid. Whether they will receive the full DKK 0.60/kWh or the lower DKK 0.43/kWh is a decision yet to be made by the energy agency. But until the European Commission approves the reform law's provision for a fixed price of DKK 0.43/kWh for the first ten years of a wind plant's life, probably in spring 2001, the DKK 0.60/kWh rate will apply.

Despite the energy agency's assurances that Jysk Vindkraft has acted within the law, the government department says it is concerned at the number of co-operative projects involved and will look into this aspect. That statement has raised an immediate protest from the wind association's Flemming Tranæs. "We have to pin down whether or not the process is legal or illegal, no matter how many are using it. It can't be a matter of the number of co-operatives or stake-holders involved."