Danish Government to launch green energy market

The Danish Government has announced that it is to launch a compulsory green market for electricity which will help it fulfil its climate change obligations on time.

The Danish Government has announced a new system of compulsory funding of renewable energies which will help it achieve a tough 21% reduction in CO2 emissions by 2012, a spokesperson told edie on 31 October.

The system, under which consumers will be obliged to pay part of their electricity bill to buy certificates to fund renewables, should be in operation by 2002, the Head of the Division for Electricity Production, in the Governmental Energy Agency, Inga Madsen, said. Under the system, electricity producers will be allocated a certain number of the certificates, free of charge, depending on their production of renewable energy, which they will be able to sell directly to consumers, or to bodies representing them. “The system will subsidise new renewables and our goal is to introduce it internationally,” Madsen said, adding that she knew of no other country introducing a similar system.

“Because we have to meet very ambitious goals under the Kyoto Protocol, we need much more renewable capacity and this system will, of course, provide that,” she said. Indeed, on 27 October the Danish Government announced that it now expected to reach its commitment to cut CO2 emissions by 21% on 1990 levels before 2012, through introducing the new system. Before this, an 18% reduction was forecast, thanks to measures such as prior major investment in combined heat and power (CHP) plants, which now account for 50% of Denmark’s capacity; high taxes on petrol and diesel; and energy savings in the public sector. New investment will be in small-scale CHP, biomass and both on-shore, and off-shore wind.

The ‘green market’ system will, however, mean higher prices for consumers: “Electricity will be more expensive, but we hope that as it funds more and more renewable facilities, the price will go down,” Madsen said. She added that plans were not yet finalised but that both the register and market place would be open to tender.

A Europe-wide exchange to trade green energy will also be launched in 2001, operating on a voluntary basis, to meet the growing demand for power from renewable sources. Renewable Energy Certification Systems (RECS), an internet-based market place will involve at least 50 power companies from the Netherlands, Norway, Sweden, Denmark, Belgium, Italy and the United Kingdom. The exchange will allow certificates that producers obtain for producing green power from renewable energy such as wind, solar, biomass and small hydropower to be traded between them (see related story).

Denmark’s Eltra and Elkraft, Belgium’s Electrabel, Finland’s Fortum and Germany’s HEW and RWE are a few of the companies to be involved.

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