Due to a recent agreement between the government and the Danish People's Party, solar and wind power projects will compete for state subsidies for the first time. Under the new subsidy model, the solar power, land windmill or near-shore windmill projects which deliver the highest amount of megawatts for the lowest price will receive subsidies until the budget is allocated. Subsidies will be awarded as a fixed additional charge to the electricity cost.
The government-established Energy Commission recently filed its recommendations for the future energy policy. The commission's report forms part of the policy preparation for the next stage of Denmark's green transition. The central message of the recommendations is that to reach the goal of a low-emissions society by 2050, an ambitious and long-term energy policy must be established by 2020.
In several energy supply industry sectors, profits are allowed only as a reasonable return on invested capital subject to regulatory control. This applies, for example, to the electricity distribution, gas distribution and heating supply sectors. The Danish Energy Regulatory Authority is in the process of establishing new methods and principles for determining a reasonable return on invested capital across the different sectors.
The government recently came to an agreement with a majority of Parliament concerning the financial regulation of electricity distribution companies. The agreement is the first step towards the government's new energy supply strategy. However, its details remain vague, including with regards to general and individual optimisation requirements.
McKinsey & Company recently delivered a report analysing the optimisation potential in the energy supply sector as part of the government's anticipated energy supply strategy. The report covers district heating, waste incineration, electricity distribution, gas distribution and water supply, and concludes that there is potential for optimisation of between Dkr5.9 billion and Dkr7 billion annually across these sectors.