Offshore Wind Worldwide 2022 edition - Flipbook - Page 57
Offshore Wind Worldwide 2022
IV. Offtake issues
A. O
fftake, remuneration,
and tariff scheme
The remuneration schemes for various
energy plants are set out in the Danish
Promotion of Renewable Energy Act. The
Ministry of Climate, Energy and Utilities is
responsible for administering the schemes.
The OWF receives a remuneration based on
a fixed tariff established in the tender
procedure for the electricity produced
corresponding to a certain number of
full-load hours after connection to the grid.
Price supplements are granted as variable
premium covering the difference between
the market and fixed price. The sum shall not
exceed a certain statutory amount. However,
in some cases, developers are granted a
guaranteed bonus.
If the OWF is established through an
open-door procedure, the remuneration is
regulated in the same manner as for onshore
wind farms. OWF’s established under the
open-door procedure and connected to the
grid between 1 January 2014 and 20
February 2018 receive a feed in tariff of DKK
0.25/kWh (approx. EUR 0.033). Since 2018,
subsidies for OWFs established under the
open-door procedure are granted in annual
technology neutral tenders.
Subsidies are paid for no more than 20 years
from the time of the OWTGs grid connection.
In addition to the price settlement, an
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allowance is paid for the so-called balancing
costs.
The developers themselves must sell the
electricity on the market. The offtake
mechanism thus depends on the specific PPA
and there is no generally applicable take or
pay provision. However, reference is made to
section V.D. below concerning entitlement
for compensation in connection with certain
curtailments of production.
A special contract for difference-model
(CfD-model) has been developed for the
subsidiary scheme for the Thor OWF.
According to the CfD-model, the concession
owner will receive a premium during the
years when the offered bid price is higher
than the reference price but will pay the
Danish State during the years when the
reference price is higher than the offered bid
price. The same CfD-model is used in the
technology neutral tender held in 2021,
where open-door OWF projects as well as
onshore wind farms, solar, wave, and
hydropower projects can apply. No bids
were received in the technology neutral
tender round for 2021.
Funds have been reserved for technology
neutral tenders in 2022-2024. However, the
DEA is evaluating the result of the
technology neutral tender in 2021 resulting
in no bids. The evaluation will be part of an
analysis of the need for technology-neutral
tenders after 2021.The tender model for the
additional 2 GW offshore wind capacity to be
tendered towards 2030 will be subject to
further political discussion based on the