Electricity Saving Fund

Panel: Panel 2: Incentives and instruments to achive greater

Authors:
Annette Gydesen, Danish Energy Agency
Hans Göran Wilke, Danish Energy Agency
Holger Christensen, Danish Energy Agency

Abstract

Establishment of a Electricity Saving Fund financed by a per kilowatt-hour fee. The purpose is to support electricity savings in the households and public sector.

Several analyses have shown that investments in electricity savings are more advantageous than investments in electricity production from an economical, as well as environmental, point of view.

Furthermore analyses have shown that from a socio-economic point of view one of the most advantageous initiatives to reduce electricity consumption and CO2 emission in Denmark is conversion of electrical heating to district heating or natural gas heating.

In order to strengthen the electricity conservation effort the Danish Government passed a bill concerning establishment of an Electricity Saving Fund in December 1996.

The purpose of the fund is to support socio-economic electricity conservation initiatives in households and in the public sector. Primarily, the goal is to support substitution of electrical heating by district heating or natural gas. A minor part of the financial resources will be used for other purposes, especially regarding, development, market introduction and dissemination of efficient appliances.

The resources for the Fund will be furnished through introduction of a per kilowatt-hour fee of DKK 0.006 (ECU 0.0008), which will be levied on electricity consumption in dwellings and in the public sector and be paid by the consumers.

Under the scheme, tenders for various types of electricity conservation projects will be invited from, for instance, utility companies, district heating and natural gas companies, suppliers and manufacturers of electrical equipment who can bid for projects or submit proposals of their own.

The Fund is managed by an independent board that comprises representatives of consumers, interest groups and utilities as well as experts in energy savings and economics.