Denmark presents plan to allow delayed payment of large energy bills

Denmark’s government on Wednesday said it wants to introduce an arrangement which will allow people who receive high energy bills to partially freeze payment until a later date.

Denmark presents plan to allow delayed payment of large energy bills
Prime Minister Mette Frederiksen said on Wednesday the government plans to allow high energy bills over the next year to be paid in installments. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Under the scheme, payment deadlines on energy bills could be frozen allowing them to be paid off in instalments.

The plan was presented by Prime Minister Mette Frederiksen at a briefing on Wednesday afternoon.

“This means that if the price of electricity, gas or district heating exceeds the price from last autumn, 2021, then you will be able to postpone payment of the excess amount to a later date, spread over several years,” she said.

The government would require backing from other parties to be able to vote the proposal through parliament by the winter.

High energy prices are expected to affect a large proportion of the Danish population in coming months, particularly those whose homes are heated by individual gas heaters.

Some households have already seen their energy costs double since last year.

READ ALSO: How much will Danish energy bills go up this winter?

“Very many Danish families will experience energy costs going up by many thousands of kroner per month,” Frederiksen said.

The model proposed by the government is voluntary, meaning bill payers would choose whether to freeze payments. The government would foot the bill with energy companies in the intervening period. Customers would need to contact energy companies to set up the repayment plan, news wire Ritzau writes.

The scheme would be in effect for an initial one-year period, but repayment would be permitted over several years.

“This is something we want agreed quickly with parliament,” Finance Minister Nicolai Wammen said.

“I expect we can have the first meetings by tomorrow evening. This needs everyone to roll their sleeves up and for us to find a solution together,” he said.

Two key parliamentary allies of the government, the Social Liberals (Radikale Venstre) and Socialist People’s Party (SF), gave tentative backing to the plan on Wednesday but called for further-reaching measures.

Social Liberal deputy leader Martin Lidegaard said his party would “review this proposal thoroughly and see if there’s anything in it that needs to be adjusted”.

“We think it initially looks sensible,” he also said, but added that “what I can say with certainty is that it can’t stand alone”.

The finance spokesperson with SF, Lisbeth Bech Nielsen said her party wanted “a direct helping hand for those who are impacted by these rising prices”.

“For some people it will create a huge amount of insecurity to be looking at a debt that will be accrued, because you are given a form of loan,” she said.

“We think that some people will simply need to be given financial help as well,” she said.

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Denmark delays closure of three power plants

Three Danish power plants scheduled to be shut down by next year will remain in operation until the summer of 2024.

Denmark delays closure of three power plants

The three power plants – two of which are in Jutland with one in Zealand – will not be decommissioned as planned, the Ministry of Climate, Environment and Critical Supplies said in a statement.

“We are unfortunately in a situation where a cold winter can affect Danish electricity security. We will do everything we can to avoid Danes having no electricity in their sockets and to make ourselves independent of Putin’s gas, and we are therefore delaying the closure of three power plants,” environment, energy and critical supplies minister Dan Jørgensen said in the statement.

The primary role of the retained power plants will be to provide a supplement to existing power sources in Denmark, including wind power, over the coming two winters to avoid the need for power cuts if the system come under strain, according to the ministry.

A cold winter or low level could result in intermittent strain on the system, the ministry has assessed.

READ ALSO: Could Denmark suffer electricity blackouts this winter?

The three power stations to be given the temporary reprieve are Kyndbyværket, located on Zealand, and Esbjergværket and Studstrupværket in Jutland.

The three power stations will remain open until summer 2024.

Parliament is in support of the decision, the ministry said in the statement.

According to the ministry, a section of the Studstrupværket plant stopped operating in April this year but has the capacity to produce 360 megawatts, while the Kyndbyværket’s block 21 stopped operating in 2020. It can produce 260 megawatts.

At Esbjergværket, a part of the station termed block 3, scheduled to be shut off next April, will now continue to operate for at least another year.

All three power plants are operated by Ørsted, Denmark’s largest power company.

In a statement, Ørsted said it would “comply with the authorities’ order and will now prepare and maintain facilities and obtain staff to operate them”.

“It is still our view that we as a society should phase out the use of gas, oil and coal as soon as possible but we are in the middle of a European energy crisis and we will naturally help to secure energy supplies as well as we can,” Ørsted CEO Mads Nipper said according to broadcaster DR.

According to both the energy ministry and the Danish Energy Agency (Energistyrelsen), the delayed closure of the plants does not affect Denmark’s 2025 and 2030 climate targets.

“This is due precaution. It’s important to stress that the decision does not affect being able to fulfil our ambitious climate goals because it the measure in question is a temporary one,” Jørgensen said.

Delaying the plant closures “does not change the long-term plans for green conversion in the electricity sector and CO2 reduction,” Energy Agency vice director Martin Hansen told DR.