Promotion of Renewable Energy Act

Country / jurisdiction: Denmark · Year: 2009 · Status: In force · Level: National · Type: Voluntary

The Promotion of Renewable Energy Act, which entered into force on 1 January 2009, contains four new schemes to promote the development of wind turbines on land:

loss of value to real property due to the erection of wind turbines,

local citizens option to purchase wind turbine shares,

a green scheme to enhance local scenic and

recreational values and a guarantee fund to support financing of preliminary investigations etc., by local wind turbine owners associations.

These provisions generally apply to onshore turbines over 25 m high, and to offshore turbines that are installed following a tender process.

The Act establishes a "loss of value scheme" that provides clarification regarding payment in case of loss of value to real property following the erection of a wind turbine. It also requires individuals installing one or more onshore wind turbines to offer at least 20% of the turbines ownership shares for sale. The sale offer must be made to residents living 4.5 km or less from the nearest turbine. If any shares are remaining, these must then be offered for sale to residents of the municipality in which the turbine is located (or with a coastline closest to the turbine). The obligation does not apply to turbines erected for own consumption, or those designated as test turbines.

Under the legislation the Minister for Climate and Energy also establishes a "green scheme", from which subsidies can be granted municipalities to undertake activities that increase the acceptance of the installation of new onshore wind turbines. The turbines must be grid connected as of 21 February 2008, and cannot be installed for the owners consumption. Subsidies are granted in the amount of DKK 0.004 per kWh for 22,000 peak-load hours for each wind turbine. The subsidy can be used to enhance scenic or recreational activities, or to run activities that promote the use of renewable energy in the municipality.

Denmarks transmission system operator, Engerginet.dk, can also provide loan guarantees for wind turbine owners associations or other local initiative groups meeting certain conditions for loans taken out to finance preliminary investigations. These can include siting studies and technical and financial considerations, as well as to prepare applications, with a view to installing one or more wind turbines. The installed turbines must not be for the owners use. A maximum guarantee of DKK 500,000 may be granted per project.

The Act also requires that all municipalities collectively prepare and adopt a supplement to their municipal plans, in 2010 and 2011, with areas reserved for a total wind-turbine capacity of 75 MW in each of the years.

The Act also updates the scrapping scheme for old wind turbines. According to this scheme, a scrapping certificate can be earned by replacing old inappropriately situated wind turbines with new and more efficient turbines. This grants the right to an extra price supplement (see separate entry).

The Act also provides detailed feed-in premium tariffs for wind, biomass, biogas and other renewable energy source electricity production (see separate entry). In addition, a special fund to promote the development of small-scale, grid-connected renewable energy plants is established in the Act, to be managed by Energinet.dk. The fund will amount to DKK 25 million per year for four years. Finally, the Act also clarifies how market prices for different prices will be determined by Energinet.dk, and imposes repor