New Rules for Payment of Green Electricity - Adaptation of the Electricity Act Reforms

In June 2001, the EU Commission approved the rules for payment of green electricity from new renewable energy plants notified by Denmark to the Commission as a step in the gradual transition to market-based prices pursuant to the Danish Electricity Reform Agreement.

The new rules were to be stipulated in a revised Statutory Order on Wind Turbines. With the Commissions approval, new wind turbines would be guaranteed a fixed settlement price of DKK 0.33 per kWh for the first 22,000 full-load hours, corresponding to approximately 10 years production. When these hours were used, remaining electricity produced by the wind turbine was to be settled at the market price. Furthermore, a premium of DKK 0.10 per kWh was added to the market price. The premium was to be replaced by Green Certificates for electricity production once the coming green market for renewable energy was established, as planned for 2004. Electricity from biomass-based plants was then settled at a price of approximately DKK 0.60 per kWh. The Danish Energy Agency also submitted the economic outlines of proposed biomass-based electricity production for consideration by the parties behind the Electricity Reform Agreement. Electricity production subsidies were to be replaced by renewable certificates with a minimum value of DKK 0.10 and a maximum of DKK 0.27/kWh.

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