Environmental Engineering Reference
In-Depth Information
incentive of €0.036/kWh for up to 25,000 full-load hours. Projects initiated
between January 2000 and December 2002 would receive a FIT of €0.044/
kWh plus a reduced production incentive of €0.013/kWh (for up to 25,000
full-load hours). Projects initiated after January 2003 would not receive
any subsidies and instead receive market price for electricity generated plus
€0.013—€0.036 per kWh under the green certiicate scheme.
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In order to ensure optimal market conditions for supporting carbon
trading, the government also introduced an energy act amendment which
deregulated electricity generation and forced the breakup of vertically inte-
grated utility activities. he amended act further stipulated that manage-
ment of the high-voltage section of the power grid was to be transferred to
a state owned company.
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he announcement of these intended changes had predictable conse-
quences in regard to market activity. Wind power developers responded by
fast-tracking projects to take advantage of the higher front-end incentives,
and in conjunction with the new incentives for turbine replacement, this
catalyzed the installation of a record 637 MW of wind power (including 40
MW of ofshore wind power) in 2000, bringing total installed capacity up to
2390 MW (see Table 4.4).
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Ironically, amidst this lurry of activity it became
apparent near the end of 1999 that stakeholders were ill-prepared to launch
the green certiicate scheme as planned in January 2000. herefore, a deci-
sion was made to postpone the launch until January 2002.
As often happens in markets where expiring subsidies are greater than
incoming subsidies, the development rush of 2000 produced relatively laccid
market conditions in 2001, only 107 MW of capacity was added. However, in
2001, the Danish government also announced a commitment under the 2001
European RES-electricity directive to achieve a 29% share of renewable energy
contribution to gross electricity consumption by 2010.
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his announcement
infused renewable energy developers with a degree of conidence that if the
new green certiicate program fell short of catalyzing the capacity develop-
ment necessary to meet the 2010 target, there would be further government
intervention. When the launch of the green certiicate program was post-
poned once again to 2003 (in September 2001),
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the wind power develop-
ment market once again began to heat up as developers fast-tracked more
projects in order to take advantage of existing subsidies.
Unfortunately, in November 2001, optimism that the government would
eventually sort out its policy quandary was attenuated by the election of
a right-wing Liberal Party—the Conservative People's Party coalition, led
by Prime Minister Anders Forgh Rasmussen. he Rasmussen adminis-
tration supported a political platform that decried excessive government
wind subsidies.
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In 2002, market fears were conirmed as the Rasmussen
