The history of Danish support for wind power
Production of electricity using wind turbines has been supported since 1976. Initially in the form of
financial support for building wind turbines, from 1983 as tax deduction for electricity produced on
wind turbines and from 1991 as price premium or feed in tariffs for electricity delivered to the grid.
Financial support
From 1976 to 1989 the Danish state granted investment support for building wind turbines.
Originally the support was 40% of investment cost, but the support level was reduced gradually
until the support scheme was cancelled in 1989.
Only few wind turbines were built in this period.
After August 1989 there has not been financial support for building wind turbines in Denmark.
Support based on production
From 1984 to 2001 the Danish support for production from wind turbines was based on an
electricity price. In this period the electricity price paid to producers of wind power was 85% of the
local retail price of electricity excluding taxes.
In 1991 a price premium of 3.6 c€/kWh was introduced, which was in place until 2001. In this
period the deployment of wind turbines increased dramatically.
In 1999 the Danish electricity market was liberalized, and from 2001 wind power has been
supported after new principles. Support for renewable electricity is now paid by all electricity
consumers as a public service obligation. Existing turbines are covered by a special feed in tariff
which results in approximately the same income for producers as under the previous support
structure.
Existing wind turbines bought before the end of 1999
Production from wind turbines bought before the end of 1999 is sold in the market by the TSO
(transmission system operator) and the producer receives a fixed feed in tariff of 8 c€/kWh for a
number of full load hours (25.000 full load hours for turbines below 200 kW, 15.000 full load hours
for turbines below 600 kW and 10.000 full load hours for turbines larger than 600 kW). After the
full load hours are used, the feed in tariff is 5.8 c€/kWh until the turbine is 10 years old. After this,
the producer must sell the power in the market and receives a price premium of maximum 1.3
c€/kWh until the turbine is 20 years old. The sum of market price and price premium is limited to
maximum 4.8 c€/kWh. An additional price premium of 0.3 c€/kWh is paid to cover balancing costs
in the electricity market.
2000 - 2002
Production from wind turbines connected to the grid from 2000 to 2002 is sold in the market by the
TSO and the producer receives a fixed feed in tariff of 5.8 c€/kWh for 22.000 full load hours on
land or 10 years at sea. After the first period, the producer must sell the power in the market and
receives a price premium of maximum 1.3 c€/kWh until the turbine is 20 years old. The sum of
market price and price premium is limited to maximum 4.8 c€/kWh. An additional price premium
of 0.3 c€/kWh is paid to cover balancing costs in the electricity market.
2003 – 2004
For wind turbines connected to the grid in 2003 or 2004, the producer must sell the power in the
market and receives a price premium of maximum 1.3 c€/kWh until the turbine is 20 years old. The
sum of market price and price premium is limited to maximum 4.8 c€/kWh. An additional price
premium of 0.3 c€/kWh is paid to cover balancing costs in the electricity market.
2005 – 20th February 2008
For wind turbines connected to the grid from 2005 to 20th February 2008, the producer must sell the
power in the market and receives a fixed price premium of 1.3 c€/kWh until the turbine is 20 years
old. An additional price premium of 0.3 c€/kWh is paid to cover balancing costs in the electricity
market.
21st February 2008 –
For wind turbines connected to the grid after 21st February 2008, the producer must sell the power
in the market and receives a fixed price premium of 3.4 c€/kWh for the first 25.000 full load hours.
An additional price premium of 0.3 c€/kWh is paid to cover balancing costs in the electricity
market.
This support applies both to wind turbines on land, and wind turbines at sea which are not covered
by tenders.
Additional support for replacing old turbines with new
New wind turbines which replace small turbines receive extra 1.1 c€/kWh for the first 12.000 full
load hours. This additional support aims at replacing old turbines which often occupy the best
locations. Between 1999 and 2003 the support under this scheme was 1.6 c€/kWh for the first
12.000 full load hours.