| Press release from the Danish Ministry of Economic and Business Affairs, 29 March 2004 Bendt Bendtsen wraps up far-sighted energy agreements The Minister for Economic and Business Affairs in Denmark, Bendt Bendtsen, has completed a range of far-sighted agreements on future energy policies in the country. Broad agreement has been reached between parties of the ruling coalition in Denmark (V, K, S, DF, SF, RV, KD) on a transfer of ownership of the national electricity grid to government hands. At the same time, the tangled financial and owner relationships among electricity companies in Denmark is being clarified in order to avoid the court suits which otherwise might be expected between the government and private enterprises. This removes stumbling blocks that in the past have hindered electricity companies in their business development. This agreement between the coalition parties is backed up with an agreement also reached today with Elfor (the association of electricity suppliers in Denmark). Further agreement has been reached that the adjustment of capital shares owned by the various electricity providers must not increase the cost of electricity for the end user. The Economy and Business Affairs Minister has also entered an agreement with six of the coalition parties (V, K, S, SF, RV, KD) on the construction of new offshore wind farms, and the replacement of windmills in unfavourable locations with erection of new windmills in other places. This agreement calls for increased research and development and demonstration of advanced energy technologies. The objective is above all to ensure that electricity is sold under market conditions. Minister for Economic and Business Affairs Bendt Bendtsen says: "I am highly gratified that the government coincides with the other involved parties in taking action to bring transparency into the extremely complex system of special regulations that we have had in the electricity market. In other words, we are bringing order to a system that was like a Chinese set of nested dolls and has prevented the orderly organisation of business structures - much to the disadvantage of consumers." "So this is a good day for energy politics in Denmark," Bendt Bendtsen continues. "This is a far-sighted agreement to provide the necessary conditions for an energy market which should function more smoothly in future. The whole electricity grid in Denmark will belong to the government, ensuring that it is open to all users of the network on equal footing. On my part it is also important to point out that this agreement provides a stable framework for investors in the Danish electricity market." "Furthermore, I am very glad that the whole production of energy from windmills and local power-and-heating plants will now be sold under market conditions. This is the basis for construction of two more offshore wind farms in Denmark and for the replacement of about 900 older windmills all over the landscape with approximately 175 newer and more effective mills. This will strengthen growth and employment, not the least in the wind energy industries. It should also bolster Denmark's leading position in environmentally friendly energy technologies," says Bendt Bendtsen. Included in the many elements of this agreement is the transfer of responsibility for Eltra, Elkraft System, and Elkraft Transmission free of charge to the government. A separate agreement has also been concluded with the branch association Elfor. In future, responsibility for the system and overall transmission level for electricity will be in the hands of a state-owned enterprise called EnergiNet Danmark. The objective is to ensure reliable electricity supplies with open and equal access for all users of the network. At the same time, the separation of free and fixed capital is being removed. The same applies to current ownership restrictions that hem investments and structural adjustments. To ensure that the price of electricity will not rise for consumers in the course of normalizing financial relationships, a new and simpler price regulation is being introduced. The user's fixed rate, which has applied up to now, will be cancelled. A user's fixed rate now dictates that approximately 40 % of the consumption of electricity from local power-and-heating plants and windmills is bought at a price fixed by the government. In future, users can buy 100 % of their electricity supply on the open market. This will increase reliability of the electricity supply and create greater competition, to the advantage of consumers. At the same time, support for the local power-and-heating plants will be adjusted to prevent a rise in the price of heating. Later in 2004, the government of Denmark will call for bids on two new offshore wind farms (200 MW each) for a collective investment of about 4.5 billion DKK in the course of five years. Preliminary planning is to situate the windmills at Horns Rev and at Omø Stålgrunde. When finished, the new energy parks will supply energy to 350 000 - 400 000 households, amounting to about 4 % of the electricity consumed in Denmark. |
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