Denmark opens renewables tender. Wind and wave eligible for support

The Danish Energy Agency has opened a technology-neutral tender for 2021, where solar cell systems, wind turbines, wave energy plants and hydropower plants can all compete for support.

The agency’s third technology-neutral tender, where the total potential support will amount to DKK 1.2 billion (€161.4 million), is open for bids for solar, both onshore and offshore wind turbines, as well as wave energy and hydropower until 22 October 2021.

As agreed by the climate agreement for energy and industry from June 2020, the support model has been changed from being a supplement to the market price to contract for difference (CfD) support model, where the state assumes a larger share of the long-term risk associated with the development of renewable energy.

As different technologies compete for support in the technology-neutral offer, it is not known in advance how the support will be distributed between solar, wind, wave power and hydropower, the Danish Energy Agency noted.

Using a CfD support model, the renewable energy producers can in a forthcoming tender achieve a fixed settlement price of up to 25øre/kWh for 20 years.

The renewable energy applicants can also choose to bid in the tender with part of a renewable energy system, the agency said.

With this flexibility, both support and electricity price hedging are expected to be better adapted to the needs of the individual project.

The last technology-neutral tender was held in 2019, where solar cells and wind turbines competed for the lowest support price, which resulted in a weighted average of the winning price supplements of 1.54øre/kWh.

It was 32% lower than the year before and 16 times lower than the price supplement in the previously applicable support scheme, which expired in February 2018.

This is the only technology neutral tender that will be held this year, combining the allocated funds for 2020 and 2021, with a capacity cap set for 428MW of new installations.