Danish government considers tax restructuring for better competitiveness of geothermal

By District Energy posted 05-27-2020 14:34




The Danish government is looking at abolishing a co-generation requirement for heat and power production and green tax restructuring that could help geothermal become more competitive in the future of district heating in Denmark.

As part of preliminary plans for how Denmark should reduce CO2 emissions by 70 per cent by 2030 compared to the level in 1990, the government proposes a number of  bold efforts. Among them two energy islands with offshore wind, that could see wind power and effective connection to grids supplying power to Poland and the Netherlands.

The plans go beyond the key elements of the energy islands, transportation and fuels, Green industry transformation and
collaboration with business, Efficient use of energy and renovations, green waste and recycling, and mentions “Green heat for the Danes”.

“The government wants a green heating sector. Therefore, the oil and gas must be removed and replaced with green district heating or electric heat pumps. The government wants to lower taxes on green power for heating and raising them on black heat.

At the same time, we provide support for heat pumps, remove consumer bonds to natural gas and promote the use of green surplus heat
from e.g. data centers. In addition, the government will make it easier to establish new green and cheap heat production by abolishing obsolete
requirement that district heating systems must in some places able to produce both electricity and heat.”, so the report outlining the plans.

Specifically in the context of the Danish district heating sector, geothermal is mentioned in the government’s plans.

“Today, the district heating sector has a binding place on their production there makes them not always able to invest in green solutions. The government will repeal this one so-called natural gas fuel bond in order to support the phasing out of fossil fuels in the heating sector.

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