Tenders (Tender scheme for wind and solar PV)
Updated: 04.01.2019
Author: Karl Wikberg
Denmark promotes wind and solar PV through a premium tariff, which is awarded through tenders. The tenders are held by the Danish Ministry of Energy, Utilities. The support scheme is a cost effective way to support developments of renewable energy in Denmark, the support is financed through state budget and a public service obligation.
Eligible technologies and support requirements
Land-based offshore wind and solar PV are eligible, the support is granted for a maximum of 20 years.
| Wind energy | Offshore wind parks are eligible (§ 23 VE-Lov). Onshore wind turbines are eligible (§ 50c VE-Lov) |
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| Solar energy | Solar PV installations are eligible (§ 50c VE-Lov) |
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Tender characteristics
| Pre-qualification criteria | The Danish Ministry of Energy, Utilities and Climate may specify the pre-qualification criteria for specific tender (§ 23 VE-Lov).
Project developers must obtain the necessary approvals in advance. |
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| Tender constraints | The Danish Ministry of Energy, Utilities and Climate may specify the tender constrains for specific tender (§ 23 VE-Lov). |
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| Pricing rules | The bid system is based on a "pay as bid" principle. The tender period 2018-2019 has a total reserved state budget of DKK 1.015 billion (approx. € 136 million). The bidding cap is set at øre 13 per kWh (approx. €c 2 ) (Political Agreement) |
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| Lead time | The Danish Ministry of Energy, Utilities and Climate may specify the lead time for specific tender (§ 23 VE-Lov).
A two-year realization period for land winds and solar cells is introduced and a four-year implementation period for offshore winds subject to the rules on municipal objections. (Political Agreement) |
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| Frequency of tenders | Two tenders are to be held within the timeframe 2018-2019. (§ 50c VE-Lov) |
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Addressees
The persons entitled to the payment of a bonus are the owners of plants for the generation of electricity from renewable sources (§ 56 par. 2 VE-Lov).
Procedure
Process flow and deadlines | The tenders for wind and solar PV are organised by Danish Ministry of Energy, Utilities and Climate, which specifies conditions or terms of the tenders. Company willing to construct an installation that fulfils the requirements has to make an offering within such tender (§ 22, 23 VE-Lov). |
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Competent authority | The authority responsible for the tendering scheme is Danish Ministry of Energy, Utilities and Climate. (§ 56 par. 1 VE-Lov). |
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Penalties
| Amount of the fee | In case the winner of a bid does not fulfil his obligations as stated in the tender contract, the electricity producer has to cover the consequent loss of the transmission grid operator Energinet.dk (§ 31 VE-Lov). |
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Distribution of costs
| Consumers | The costs other parts of the support system are borne by the consumers (§ 8 par. 2 Act 1009/2018). |
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| State | The support scheme has state financing of DKK 1.015 billion (approx. € 136 million ) in the period 2018-2019 (Political Agreement) |
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| Distribution mechanism | - State budget. part of the support comes from state budget for the period 2018-2019
- Consumers – grid operators. Plant operators sell their electricity to the consumers via a supply company. Every consumer is obliged to pay a surcharge, the so-called Public Service Obligation. The surcharge depends on each consumer's individual level of consumption. The surcharges are determined by Energinet.dk four times a year. According to Energinet.dk, the surcharges are collected by the grid operators.
- Grid operators – Energinet.dk. According to Energinet.dk, the grid operators submit the surcharges collected to Energinet.dk.
- Energinet.dk – plant operators. Energinet.dk pays the bonus to the plant operators.
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Denmark
