As part of the rural development plan presented by the government on Thursday, a proposal is included to give municipalities a financial carrot if they set aside space for renewable energy (RE) projects. Specifically, 200 million DKK will be distributed annually over the next ten years to the municipalities that contribute the most to the expansion of renewable energy on land. This will be money that the municipalities themselves can dispose of.
Both the Danish Rural Development Council and Green Power Denmark have been positive about the proposal for a RE bonus for municipalities. However, the Danish Association of Local Authorities (KL) is far from agreeing with these tones. KL chairman Martin Damm goes so far as to call the proposal "a swindle" that could mean a slowdown in the deployment of RE.
The criticism from KL is based, among other things, on the fact that the money for the bonus scheme is to be taken from the municipalities' block grants. This means that the money that some municipalities are to receive as a bonus is taken from other municipalities, which then have to cut welfare. In addition, the government is planning for the bonus scheme to only come into effect from 2026. This will de facto mean that all installation of renewable energy will stop now, is the concern from KL.
- The government is presenting a new incentive structure that risks having the opposite effect: An immediate stop, says Martin Damm and continues:
- The problem with the bonus scheme is that you will wait for it to come into effect in 2026 to get a bonus for the local community. Everything will come to a standstill. It also sends the wrong signal to the municipalities and citizens who have taken great social responsibility and have already established renewable energy quickly. They will not get a bonus. On the contrary, they will actually end up paying the municipalities that have been waiting.
KL will also enter into dialogue with the government about getting a different financing model than the current one.
- It's a waste. We need to have a talk with the government so that we can get a model that actually has the intended effect – namely more renewable energy, says KL's chairman.
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