The Danish Energy Agency has announced, yesterday, that not a single bid has been submitted for the technology-neutral tender launched in late June for the deployment of large scale power plants based on solar PV; both onshore and offshore wind; wave energy; and hydropower.
The agency said it will now begin talks with the renewable energy industry to analyze the tender's disappointing result and to evaluate if more tenders of this kind should be held, starting from next year. “The analysis will incorporate experience from previous tenders and will also provide an overall status of unsubsidized renewable energy projects in Denmark,” the agency said in a statement. “It will also provide an overall picture of the expected growth of renewable energies until 2024.”
“Funds have been reserved for technology-neutral tenders in 2022-2024 as part of the Danish climate agreement from 2020,” a spokesperson from the agency told pv magazine. “However, with the climate agreement, the political parties also agreed to analyze the need for technology-neutral tenders after 2021.” The national budget for renewables auctions for 2020-2024 is DKK4.2 billion ($655 million).
The agency had allocated DKK1.2 billion ($187 million) for the procurement exercise, a sum that was considered sufficient to allocate around 429 MW of renewable energy capacity. Selected projects would have been eligible for a feed-in premium – related to the wholesale electricity price – for 20 years.
In the first auction of the kind, held in 2018, 20-year power purchase agreements were awarded to three solar plants with a combined generation capacity of 104 MW and three wind facilities with 165 MW of capacity. The Danish Energy Agency received 17 bids in that procurement round – for 280 MW worth of solar capacity and 260 MW of wind. The weighted average price premium of the winning bids was DKK0.0227/kWh ($0.0035).
In the second exercise, held in 2019, the agency allocated 252 MW of clean energy generation capacity, of which 83 MW was solar and 93 MW solar-wind hybrid facilities which included 34.1 MW of PV capacity. The weighted average price premium, which is paid for the power generated by the projects on top of spot market prices, was DKK0.0154/kWh ($0.0024).
Currently, there are several unsubsidized solar projects under development in the Scandinavian country. Better Energy has already built a 50 MW solar project under a long-term power purchase agreement in Denmark that is powering an Apple data center in Viborg. Furthermore, Danish clothing company Bestseller announced in 2019 it was partnering with independent power producer Better Energy for the construction of a 125 MW solar facility to power its operations.
The Scandinavian country also has other subsidy-free solar installations under development, including a 400 MW solar project near Nissum Fjord, a 500 MW installation that Encavis and Greengo agreed to develop in May, and a 200 MW PV plant in Holstebro municipality.
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The decline in prices for both large PV on farm land and large land based wind turbines and the financing situation have made it profitable for companies to build plants in Denmark without state support.
Now NGOes ask for Danish government to support smaller consumer owned plants including renewable energy communities and increasing support for energy savings. They say this is the best way to benefit both the consumers and the environment.
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