On June 29, the Danish government signed an energy agreement with the support of all the sitting parties in the Danish parliament. The agreement reaffirms and strengthens Denmark's climate and energy goals leading up to 2030.
Key elements of the agreement include a commitment to construct three large new offshore wind farms, new funds for onshore wind and solar energy, a targeted effort to realise energy savings and a targeted strengthening of energy and climate research.
Reaching the 2030 target of 50 percent renewable energy
With this agreement, Denmark is on track to fulfil the government’s objective of transforming Denmark to a low carbon society that is independent of fossil fuels by 2050. The agreement will enable renewable energy to fully cover Danes’ electricity consumption by 2030. At the same time, the government’s 2030 target of reaching 50 percent renewable energy will also be met. In addition, funding is allocated that will allow Denmark to source 50 percent of its total energy needs from renewable energy. Finally, the agreement ensures that Denmark fulfils its obligations regarding the UN Sustainable Development Goals.
‘’We have landed a broad and ambitious energy agreement, which secures a timely and ambitious realisation of the green transition. With the agreement, we will make it possible for Danes to consume electricity solely generated by renewables by 2030. At the same time, we deliver on our ambition that the green transition should improve the individual’s economy and underpins a sustainable socio-economy. This balance was an important priority in reaching the agreement,’’ said the Danish Finance Minister, Kristian Jensen.
The energy agreement contains a wide range of ambitious green initiatives and easing of electricity taxes, which will help Danish consumers to replace fossil energy with green electricity. Similarly, companies and consumers will receive cheaper heating through a modernisation of the heating sector.
With this energy agreement, three new offshore wind farms will be put out to tender by 2030. The first wind farm will consist of 800 MW and once completed, will be the largest of its kind found in Denmark. It will be constructed in the period 2024-2027. Efforts to realise energy savings will be largely focussed on gaining greater value for money and addressing criticism of the existing system. Energy and climate research gets a cash-injection with the goal of allocating DKK 1 billion in 2014. At the same time, there will be substantial easing and restructuring of energy taxes as well as a reorganisation of surplus heat.
Agreement underpins Denmark’s position as an energy and climate leader
’’The government’s long-term climate goal is that Denmark, by 2050 at the latest, attains its goal of being a low carbon society, where greenhouse gas emissions are offset by the absoprtion of greenhouse gasses. I am therefore pleased and proud that all the parties in the Danish parliament have united to reach this agreement, which underpins Denmark’s position as an energy and climate pioneer. It creates confidence in the development and secures consistency in the direction we are heading in,” said the Danish Minister of Energy, Utilities and Climate, Lars Christian Lilleholt.
The energy agreement includes the following initiatives:
- By 2030, three offshore wind farms will be established with a total of 2400 MW. It is expected that the wind farms will be significantly cheaper to construct than wind farms of the past.
- DKK 4,2 billion (EUR 564 million) is allocated to a tender process, where different technologies such as onshore wind turbines and solar cells can compete on delivering green electricity at the lowest price.
- More than DKK 4 billion (EUR 537 million) is allocated to expand the production of green biogas. A share is allocated for organic biogas.
- From 2021 to 2024, DKK 500 million (EUR 67 million) annually will be allocated to a market-based grant pool focused on energy savings – primarily in business – DKK 300 million (EUR 40 million) for industries and DKK 200 million (EUR 27 million) for energy savings in buildings.
- A reserve of DKK 400 million in 2025 (EUR 54 million) and then DKK 500 million (EUR 67 million) annually will be allocated to further enhancing the use of renewable energy after 2026.
- Immediate relaxation ielectricity and electric heating taxes, which amounts to approximately DKK 2 billion (EUR 268 million) in 2025 (excl. VAT).
- A modernisation of the heating sector, where both the district heating sector and the consumers have a free choice to decide future investments, resulting in cheap heating for both companies and consumers.
- Funds are allocated to handle the discontinuation of the ‘basic financial contribution’ and to enhance surplus heat and export of energy technologies.
- DKK 500 million (EUR 67 million) is allocated to green transportation in 2020-2024, in order to enhance green mobility and transportation.
- The parties agreed on phasing out coal in the Danish electricity production by 2030, hereby joining the international initiative with the same purpose.
- Energy and climate research will receive a cash injection with a target of DKK 1 billion (EUR 134 million) by 2024.
Source: The Danish Ministry of Energy, Utilities and Climate (in Danish)