The Danish Energy Agency has suspended 28 wind turbine projects worth billions of kroner. Other energy projects have also been halted due to fears that the “open door” contracting scheme is in breach of EU law.
All the projects fall under the so-called ‘open door’ scheme. This allows a company to submit an unsolicited project proposal to a municipality, as opposed to the municipality holding a tender for the best company to carry out a particular project.
“The Danish Energy Agency has stopped the processing of offshore wind turbine projects and other renewable energy projects under the open door scheme,” it says on the organization’s website.
“The case has been put on hold pending further clarification of EU legal issues.”
Big blow to green transition
This development could endanger Denmark’s green transition. Some have suggested that the government is gambling with the country’s climate ambitions.
“This is completely unprecedented. The government suddenly slams the door to the green transition with a bang and sends shock waves through the entire green energy sector,” says Kristian Jensen, CEO of Green Power Denmark and former foreign minister, to Baltic Wind.
“The companies have done a huge groundwork and are ready to build more green energy, and then the government pulls the plug on the ‘open door’ scheme at the 11th hour. This is simply not turned on. It is a break with the way we have historically conducted energy policy in Denmark and creates enormous uncertainty about green investments.”
Unsettled questions
So what made the Danish Energy Agency take such a drastic measure?
Ture Falbe-Hansen, the Danish Energy Agency’s Executive Secretariat, told CPH POST that there were 54 open door applications from April 2022 to January 2023. To put this into perspective, the organization received one application in 2020 and none in 2021.
The increase in applications came with a change in the law that came into effect in July 2022.
“The open door applications do not involve competition, as they work on a first-come, first-served basis, which is against EU policy,” said Falbe-Hansen.
“For this reason, the projects had to stop while investigations into the legitimacy of the open door scheme were underway.”
Stopping the projects would be against the EU’s policy of accelerating the transition to green energy.
Proposals for payments to secure contracts
Falbe-Hansen also clarified that “industry players” wanted to pay the state to secure open-door contracts. This began in autumn 2022 and contributed to the projects being suspended.
He did not specify whether this is normal practice under the open door scheme. It is unclear whether the payments, which would have been in the form of “community contributions”, were actually made.
This was followed by unsolicited applications for very large projects under the same scheme – another factor that Falbe-Hansen states as central to the Energy Agency’s decision.
Still not clear
Asked to further clarify his comments, Ture Falbe-Hansen did not respond.
The pressure is mounting on the Danish Energy Agency to provide a reasonable explanation for its decision to suspend the projects.
“We need a quick explanation. The door has been slammed on offshore wind turbine projects, and the industry is in shock,” says Jensen at Green Power Denmark’s website.
Source: The Nordic Page