Tariff support for Danish renewable projects is to drop substantially in the second quarter of the year, according to the Danish Energy Agency. The tariff, known as the public service obligation (PSO), for the three months to June is set at 2.1 ore per kilowatt-hour, down from 6.2 ore/kWh in the first quarter of 2019, DEA said. In the second quarter of 2018, the PSO was even higher at 14.7 ore/kWh. The latest tariff level is based on a on a forward price of Dkr328 a megawatt-hour in eastern Denmark and Dkr320/MWh in western Denmark – lower than the previous quarter but higher compared with the same period a year ago. Higher electricity prices are impacting the PSO level because project operators need less financial support. Wind and biomass production is typically lower in the second quarter and this also has a downward impact on the level of the tariff.
High electricity prices and lower wind and biomass production will have a substantial impact on tariffs in the previous quarter, the Danish Energy Agency (DEA) said. The public service obligation (PSO) will be set at 2.1 ore/kWh, down from 6.2 ore/kWh on Q2 2019, and far below the 2018 Q2 figure of 14.7 ore/kWh. The DEA said the PSO level was based on forward prices of DKK328 per megawatt-hour in eastern Denmark and DKK320/MWh in the west of the country.