A new white paper from European Energy focuses on the serious challenges that have slowed the expansion of onshore wind and solar energy in Denmark. It has been a year since the first edition was published, and the situation has only become more critical. This is what European Energy writes in a press release.
Today, there are more taxes on green electricity than, for example, gasoline, diesel and natural gas. This means that a bottleneck has been created for the green transition. Among the most important challenges are highlighted:
Exploding costs for grid connection: The introduction of producer payments from 1 January 2023 has made grid connection significantly more expensive. For certain projects, grid connection accounts for up to 60 per cent. of the total costs of establishing a renewable energy park.
Negative electricity prices and low electrification rate: 2024 has had a record number of hours with negative electricity prices, which is due, among other things, to higher taxes on green electricity compared to fossil fuels. This hinders the electrification of Danish society and keeps Denmark far from the goal of self-sufficiency in green energy.
Uncompetitive energy prices: According to the Draghi report, electricity prices in Europe are 2.5 times higher than in the USA and China. While energy policy in these countries is closely linked to industrial policy, energy policy in Denmark seems to be dominated by tax policy considerations.
- Denmark should have the ambition to run on 100 percent green electricity as soon as possible, but today only 15-20 percent of our society is electrified. And then we should strive for a leading position – not only in Europe, but globally – within the development and construction of green energy projects, says CEO of European Energy Knud Erik Andersen and elaborates:
- The most important thing right now is to look at the consumer side – and here we should lower electricity taxes. Today it does not make sense for ordinary Danes to switch from, for example, a gas boiler to a heat pump. It is strange that we are preventing a green transition of society in this way.
Ten recommendations for action
The updated white paper presents 10 concrete recommendations to restart the development of onshore wind and solar energy in Denmark. These include:
1. Introduce a cap on developers' costs for the collective electricity supply network.
2. Suspend Energinet's producer payments until compliance with EU law is clarified.
3. Create stability in regulation by avoiding frequent changes in political measures.
4. Strengthen dialogue in local areas and advance decision-making processes through better involvement.
5. Give diligent municipalities peace of mind by adding more resources to case processing.
6. Remove barriers to electrification by reducing taxes on green electricity.
7. Promote investments in renewable energy through financial incentives.
8. Improve the grid infrastructure to ensure efficient handling of green power.
9. Support technological innovation in renewable energy.
10. Ensure fair competition by adjusting taxes and subsidies.
With these recommendations, European Energy aims to create a foundation for Denmark to regain its position as a green frontrunner in Europe and strengthen the green transition across sectors. The white paper can be read here.
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