Protection for wind stays in place

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Denmark's new electricity supply law -- the first step on the way to opening the Danish power market in readiness for Europe's internal energy market -- has been greeted with cautious optimism by the country's association of wind turbine owners, Danmark's Vindmølleforening (DV). The law, which went into effect on January 1, allows most of the country's electricity distributors (and a handful of large industrial consumers) to buy electricity from whomever they please. This will affect about 90% of the energy market, according to the Danish energy agency.

At a conference in November, Denmark's energy minister, Svend Auken, stressed that renewables will not be adversely affected in the future liberalised market. Wind power is protected by the country's "Windmill Law," which requires all output from wind turbines to be bought at 85% of the consumer price of electricity, plus ecotax relief. This regulation will remain in place. Flemming Tranæs of DV agrees with Auken that the new electricity supply law will not have immediate significance for wind power development.

"But this is based on the assumption that the Public Service Obligation is taken with the same seriousness in the rest of Europe as it has been until now in Denmark," Tranæs says, referring to a clause in the EU's electricity Directive which allows governments to make special provision for renewables when this will serve the public interest. As well as being protected under a specific law, wind energy in Denmark also falls into a general category of "environmentally friendly" electricity, along with locally owned combined heat and power plants. Electricity providers are obligated to include a negotiated one-third of these prioritised "friendly" sources in their supply mix.

To compy with the EU electricity Directive, passed in 1996, governments must have legislation in place to allow free trading of electricity across national borders in Europe from February 19, 1999. Denmark's new law to comply with the Directive was accepted by the European Commission on December 3.

Under the law, the first separation of generation and transmission starts this month when ELSAM becomes the first of Denmark's two electricity system operators to split in two. A commercial company in charge of generation and trade retains the ELSAM name while a new, larger, company, ELTRA, takes over all transmission activities, including the Public Service Obligation (PSO). The second operator, ELKRAFT, is still working on plans for how it will comply with the requirements of the Directive. ELSAM and ELKRAFT are the co-operative bodies for Denmark's electricity generating utilities, which are owned by the distribution companies. These, in turn, are community owned.

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