Article

Prospect of saving billions in green taxes has wind industry seeing red

The Danish Minister of climate and energy, Lars Christian Lilleholt, is talking about creating peace on the energy agreement from 2012, but he's also discussing saving 5 billion Danish kroner in green taxes by dropping wind farms already agreed upon. The savings delighted the Energy minister but the wind industry is seeing red.

WIND: The Danish Minister of climate and energy, Lars Christian Lilleholt, is talking about creating peace on the energy agreement from 2012, but he's also discussing saving 5 billion Danish kroner in green taxes by dropping wind farms already agreed upon. The savings delighted the Energy minister but the wind industry is seeing red.

"The Minister's actions in this case are unprecedented," said Jan Hylleberg, CEO in the Danish Wind turbine (wt) Association.

The reason for the Minister's message is that the cost borne by businesses and private households for the green conversion has simply become too high.

In 2015 alone, the green transition cost companies and electricity customers 8.4 billion. D-kr.

The Minister's announcement infuriated the wind turbine industry and according to the industry experts, Lars Christian Lilleholt is likely to go one step further to rein in escalating electricity bills with thinly veiled threats to drop an agreement to build coastal offshore wind farms totaling 350 megawatts (MW) by 2020.

The agreement on the coastal offshore wind farms is part of the 2012 energy agreement, which Venstre (Denmark’s Liberal Party) willingly put its signature to despite the prospect of billions being added to the bills of electricity customers with the aim of establishing 500 MW coastal wind farms.

Plans scaled down

Since then the off-shore coastal plans have shrunk. It happened in July 2014 when the then SR ( soc dem - radical) government with votes from the "blue" (right wing) side, launched a "growth plan" to curb the escalating green fees. The result was that the coastal off-shore plan was reduced to 400 MW, of which 50 MW was earmarked for special "test turbines". In one stroke the wind industry watched the plans for coastal wind farms lowered by 30 per cent. It is this, among other actions, say observers, that one must assess the future of the wind industry.

The events surrounding the Growth Agreement clearly suggest that today's threats may well be tomorrow's realities within the political energy landscape where agreements are not bullet proof.

The future of the Danish Wind Turbine Industry is further threatened by the Climate and Energy Minister promises of 'green realism". And it is certainly here, that Lars Christian Lilleholt seriously smells blood.

By dropping the coastal offshore wind farms, the Minister can save companies and residential electricity customers close to 5 billion Dkr. from 2019 - 2031 according to calculations from the Danish Energy Authority (DEA).

So far the ball is in the Energy Minister's hands.

 Although the Social democrats and the Radicals (a center-right party) were first to fight the growing PSO bill, the Minister's open attack on the coastal off shore wind farms adds to the risks.

The main question is whether the Minister has the courage to kick the ball directly into the goal by terminating the four year energy agreement. Businesses and private power customers will have to pay 38.8 billion Dkr. for the green transition in the period from 2016-2020. 

If you ask the Liberal think tank Cepos, it is urgent for the government to launched the promised "Green Realism" energy policy.

A look at the Liberal Party's previous course relative to the controversial energy agreement reveals however, that the climate and Energy Minister hardly dares to take the first step, say some.

One reason is that LA, K, DF and Liberal parties in February 2014 demanded the then SR-Government renegotiate the energy agreement, and that renegotiation never came. However, without The Conservatives, Danish People's Party or the Liberal Party demands to terminate the energy agreement will not happen.

Encounter with energy price

Since the the Liberal Party last summer took office, many anticipated a showdown over the green energy policy.

After promises of 'green realism',  the Liberal Party refused to touch the 2012 energy agreement because the SR-growth agreement in 2014 had already secured reduced costs for business. And in a July 2015 letter by Lars Christian Lilleholt to the editor of the Jyllands-Posten paper, Lilleholt  wrote: "It is a misconception if you think I, as the new minister, will throw myself into a battle to break the energy agreement, an agreement that has a broad parliamentary majority behind it and one that ensures clarity and stability of the Danish energy policy until 2020."

Green expenses increased

Despite the growth plan's promise to discount costs to business, corporate Green expenses in 2015 and 2016 increased 63 per cent.

At the same time, the 'clarity and stability' assumed under the energy agreement was called into question by Denmark's Wind turbine industry. Only a few weeks ago, wind people and potential wind investors got their morning coffee stuck in their throat. It happened when Lars Christian Lilleholt, out of the blue, postponed provisions of a coastal wind farm at Sejerøbugt until September.

The Energy Agreement from 2012 calls for 350 MW coastal wind farms to be placed in operation by 2020. 

Translation to English using Google Translate.

 


Source: http://jyllands-posten.dk/

APR 26 2016
http://www.windaction.org/posts/44925-prospect-of-saving-billions-in-green-taxes-has-wind-industry-seeing-red
back to top