Danish authorities are halting the processing of new applications for offshore wind projects to determine if their permit program violates European Union laws on state subsidies, according to Bloomberg.
The Danish Energy Agency is working with its lawyers and the European Commission to ascertain whether the so-called open door program is legal and how it can continue, according to a statement late Monday.
The suspension comes just days before EU leaders are due to meet in Brussels to discuss how best to compete with the US on green technology, and highlights the imperative for the bloc to come forward with a clear regulatory framework to stop similar situations occurring in the future.
There is growing concern that the EU is falling behind its rivals on spurring its clean technology industries. Denmark’s government made no attempt to conceal its exasperation.
“I’m deeply frustrated that, at a time when we need more green energy so much, we’re now in this situation,” Lars Aagaard, Denmark’s minister for climate and energy, said in a separate statement. “This is a serious situation for the green transition and especially for the market players who are ready to invest.”
EU leaders this week will discuss the response to the US Inflation Reduction Act, which has cleared the way for billions of dollars of green subsidies. The bloc fears the incentives could push key industries to invest in the US instead of Europe.
Loosening state aid rules is seen as one option, but EU competition chief Margrethe Vestager — a Dane — has warned that it could unfairly benefit those countries with more fiscal space, like Germany.
The bloc has also emphasized the need to remove red tape for renewable projects as it seeks to rapidly accelerate the energy transition and wean itself off Russian fossil fuels following the war in Ukraine. It passed emergency measures last year to speed up permitting for projects like wind farms, with the commission putting forward an increased 2030 target for renewables at 45%.
Denmark, which plans a fivefold increase to its wind-power capacity by 2030, grants permits for turbine parks under public tenders as well as under the open-door program, where private investors can pitch projects at locations of their choice. The authorities are currently handling 33 applications from investors, according to the Borsen newspaper.