Market transition starts at last

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After five postponements, new regulations for the Danish wind power market went live on April 1. The most visible effect is a drop in payment for power from around 2000 smaller wind turbines, most of which have been operating for at least a decade and have paid off their loans, from DKK 0.60/kWh (EUR 0.08/kWh) to DKK 0.43/kWh (EUR 0.58/kWh). Several newer turbines in areas of the country where the old rate, a percentage of the local price of electricity, has been lower than DKK 0.60/kWh will benefit from the change.

The new rate also applies to new wind turbines (those installed after January 1, 2000) -- but only until the European Commission has approved Denmark's regulative structure for transition to a competitive market, which includes an obligation on all consumers to buy "green certificates" to prove they have bought a specified volume of green power. Once the new market is approved, the energy agency is expected to reduce the fixed payment for wind power to DKK 0.33/kWh (EUR 0.44/kWh), with further income flowing from sale of certificates. A minimum price for certificates of DKK 0.10/kWh is guaranteed.

To ease the transition for existing wind turbines, the rate is DKK 0.60/kWh for the first 25,000 "full load hours" for turbines up to 200 kW, 15,000 full load hours for turbines rated at 201-599 kW, and 12,000 full load hours for larger turbines.

To encourage replacement of old turbines blocking good sites, "scrap guarantees" are being issued for machines taken off line between March 3, 1999 and December 2003. For a scrapped unit of 100 kW or less, an owner can receive a guaranteed payment of DKK 0.60/kWh for 12,000 full load hours from a machine with three times the capacity. For turbines of 100-150 kW investment under the same conditions can be made in a turbine of twice the old unit's capacity.

The regulations formalise areas of existing practice with regard to grid connection, which is to be paid by the owner up to the point of connection, and by the grid after that point, including compensation for non delivery of reactive power. The owner must pay to have the electricity metered. Denmark's turbine owner's association has asked for a ruling on a metering price level.

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