Danish Energy Agency releases draft plan for joint wind and solar auctions

The Danish Energy Agency has submitted a draft plan for public consultation for joint wind and solar power auctions.

The joint renewable energy auctions, the agency specified, are planned to ensure equal competition between the two technologies and the harmonization of the terms of the renewable energy procurement processes.

If the proposal is approved by parliament, the auctions – the first of their kind in the country – are likely to be held between 2018 and 2019. The plan for the creation of joint wind and solar auctions was proposed by the government last summer, and backed by the opposition party Danish People’s Party (DPP), which is currently the second largest party in Denmark, in September.

“The basic idea,” Peter Ahm, CEO of PA Energy and Danish representative of the International Energy Agency’s (IEA’s) PV Power Systems Programme told pv magazine, “is to create an identical level playing field for RE generating technologies, but the minting out of this in terms of the necessary regulatory framework is still not clear and not easy. Workshops and hearings are being used to try to find harmonization common ground, and transitory regulations are being developed to facilitate changes.”

He continued, “Whether a liberalized auction scheme like this will be beneficial or not is still uncertain and will probably remain so for years. Personally, I believe some guidance on choice of generating technologies or the future technology mix is unavoidable, in order to meet expectations as to security of supply, cost and impact on civil society.”

For the auctions planned for the period 2018 to 2019, the government has allocated a budget of 1 million DKK (US$160 million), which is expected to bring only around 190 MW of renewable energy power generation capacity. In September, however, the Danish Energy Agency stressed that the new capacity resulting from the auctions may be even larger, if bids are lower than expected.

Projects selected in the auctions will be granted an additional fixed tariff on the top of market energy prices. The agency said that comments and suggestions to improve the plan must be submitted by December 15.

“We are not afraid of the competition,” Flemming Kristensen, chairman of the Danish Industry Association for Solar Energy told pv magazine in September. “But we think it should not be either solar or wind, but both solar and wind.” The association also that the new level playing field will serve to boost installed PV capacity in the country while also increasing its competitiveness.

The Danish government’s current renewable energy subsidies are intended to be phased out completely before 2030, in line with many other leading European nations, such as the U.K. and Germany.