The Danish Energy Agency has submitted a plan for joint wind and solar auctions. The idea was originally suggested by the government, and aims for a fair competition between both technologies as well as for a smooth procurement process for renewables.

The Danish Energy Agency wants to ensure a smooth renewable energy procurement process as well as a fair competition between solar and wind. Thus it has released a plan for joint wind and solar auctions. Its first draft is currently up for public consultation, comments and improvement suggestions may be submitted by 15 December 2017.

Goal of fair competition for both technologies

Peter Ahm, CEO of PA Energy and Danish representative of the International Energy Agency’s (IEA’s) PV Power Systems Programme, specified the motivation behind this new plan: “The basic idea,” he said, “is to create an identical level playing field for RE generating technologies, but the minting out of this in terms of the necessary regulatory framework is still not clear and not easy. Workshops and hearings are being used to try to find harmonization common ground, and transitory regulations are being developed to facilitate changes.“

“Whether a liberalized auction scheme like this will be beneficial or not is still uncertain and will probably remain so for years,“ he continued. „Personally, I believe some guidance on choice of generating technologies or the future technology mix is unavoidable, in order to meet expectations as to security of supply, cost and impact on civil society. ”

Idea initially raised by government

It was the Danish government who first proposed the launch of such a programme this summer. The idea was later backed by the Danish People’s Party, which is currently the largest party of the country. It would be the first auctions of this kind in Denmark.

190 MW of new energy generation capacity expected

The first auction period is likely to be in 2018 and 2019. Although the government allocated a budget of 1 billion DKK (about 160 million USD), this is expected to create only 190 MW of renewable energy power generation capacity. Nonetheless, the Danish Energy Agency pointed out that a larger capacity might be achieved if bids turn out to be lower.

On top of the market energy prices, projects selected in the auctions will receive an additional fixed tariff.

Danish Programme might set new tone

Just like many other European countries, the Danish government will end its current renewable subsidies entirely by 2030. Hence the new programme is rather significant and might set a new tone. The Danish Industry Association for Solar Energy expects that it will help push currently installed PV capacity as well as increase its competitiveness.

The Association has confidence in the future. “We are not afraid of the competition,” Flemming Kristensen, its chairman, said two months ago. “But we think it should not be either solar or wind, but both solar and wind.”