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Denmark settles deal on PSO scheme for green energy

A majority in the Danish Parliament has reached agreement regarding the country's public service obligation (PSO). The tariff will be phased out and integrated into the national budget instead, while the subsidy scheme to support green energy (VE) will be discontinued.

Photo: /ritzau/Jens Dresling/

Thursday night local time, a majority in Denmark's Parliament reached final agreement on green energy funding to abolish the public service obligation (PSO). As expected, the PSO will go from a consumer tariff to a payment over taxes, which according to plan will happen gradually ahead of 2022. The funding will come from measures such as abolishing the current subsidies for renewable energy (called VE in the Danish system), increasing taxes in the lowest tax bracket taxes, and also removing certain tax deductibles related to green energy funding.

Another part of the agreement is that Sweden's Vattenfall will indeed be allowed to construct its very cheap coastal wind turbines near Danish shores. The negotiations were stalled for more than six months, but are now finally concluded because governing party Venstre (The Liberal Party of Denmark) acknowledged that a majority would not vote to cancel the coastal tender, which was passed in a energy policy settlement in 2012. This was otherwise a clear goal for the party.

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