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Energy deal edges ever closer
A deal on the future of the nation's energy came a step closer this week after opposition party Venstre (V) stated that they are finally willing to meet the government to discuss the decisive issue of the plan’s cost.
The government’s initial plan from November had a price tag of 5.6 billion kroner but they have since cut it down to 3.9 billion in order to keep Venstre onboard.
Venstre was still unhappy with the price, however, and demanded that the total cost of the plan, including the cost of a coming NOx air pollution tax, should not exceed 3.6 billion kroner.
This development created an unusual impasse between the government and opposition – Danish governments traditionally try and secure a broad cross-party consensus before trying to pass energy plans.
While Jyllands-Posten newspaper reported that there were indications that V was willing to return to the table, the opposition party declined to comment on this information.
But should V decide to return to the talks, it could be down to the mediation of fellow opposition party Konservative (K). The government’s energy plan has an ambitious view to completely end Denmark’s reliance on fossil fuels and as a result the government wants oil-fired heaters to be completely phased out.
V has been particularly critical of this decision, arguing it will be too expensive for ordinary households to switch over, but K support the plan and have attempted to forge a compromise.
“It’s important that we switch over from oil-fired heaters to sustainable energy,” K energy spokesperson Mike Legarth told Jyllands-Posten. “That’s why new oil-fired heaters should not be installed after 2017, though exemptions should be granted to those with special needs.”
About 200,000 oil-fired heaters cannot be replaced by district heating or natural gas heaters by 2030, the date by which point the government wants them completely phased out. Switching over to the only other alternatives, geothermal heating or wood-chip heaters, will cost each household up to 150,000 kroner, a cost V is not willing to accept.
The compromise suggested by K is to compensate those who will be hit by switch-over costs.
The party has their eye on a 500 million kroner pool of money which will be available in 2013 and 2014, which is currently used to give home owners a tax deduction on home improvements. Next year, the money is being reassigned to subsidise improving energy efficiency in homes and K is demanding the money is targeted towards rural Denmark.
“When the pool of money is reassigned, we are demanding that houses in remote areas, which are poorly isolated and need new radiators, are prioritised,” Legarth said. “A portion of the money should also be earmarked for home owners who are the worst off economically so that they can have financial assistance for swapping out their oil heater. It should be a compensation for future costs.”
Legarth added that he didn’t think it was necessary to compensate those who are better off financially.
“What is important to us is that we use the money to help those who would ordinarily slip through the net because they cannot afford to make the green switch-over. That’s a fair priority.”
The compromise might not be sufficient, however, and V has maintained its opposition to the plan.
“We don’t want to force people to get rid of their oil-fired heaters,” V energy spokesperson Lars Christian Lilleholt told Jyllands-Posten. “We want to make sure that 200,000 oil consumers aren’t forced to spend 150,000 kroner on a geothermal heater which will also make their houses harder to sell.”
Speaking to Politiken newspaper, however, Lilleholt did admit that V was close to returning to the negotiations.
“We have always said that we want a broad agreement on the energy deal, but that the government’s plan was too expensive," he said. "Which is why we are happy that the government has shaved off almost two billion kroner, which means we are close to discussing the content of an energy plan.”