A coalition of 26 Danish municipalities, representing 60% of Denmark’s green energy production, is advocating for a development contribution to be allocated to municipalities that provide land for renewable energy projects. This initiative aims to foster local support for the expansion of renewable energy, which is currently hindered by a lack of incentives and local resistance. The proposal draws inspiration from successful models implemented in neighboring Nordic countries like Norway, Finland, and Sweden.

The coalition proposes a development contribution of four øre per kWh of green electricity produced, which could be reserved for municipalities through the electricity tax. This would generate over DKK 500 million annually for municipalities that have embraced renewable energy expansion, based on 2024 production levels.

The group argues that existing compensation mechanisms, such as the Green Pool and RE bonus scheme, are insufficient and too restrictive. While the government has allocated DKK 200 million to municipalities that provide land for new plants, the coalition believes that new, dedicated funding is necessary.

The Nordic countries offer successful examples of incentivizing local support for green energy production. In Norway, a production tax of 2.3 øre per kWh goes directly to municipalities, enabling investments in local services. Finland allows municipalities to retain 100% of property taxes from wind turbines, funding essential services like schools. Sweden has allocated over DKK 720 million to municipalities involved in renewable energy projects and is considering further incentive models.

The current pace of renewable energy expansion in Denmark is deemed too slow to meet the government’s ambitious goals. In 2023, only one commercial land-based wind turbine was erected, followed by 12 in 2024. The government aims to quadruple renewable energy production on land by 2030 and achieve self-sufficiency in green electricity by 2050.

The coalition emphasizes that while a minority of municipalities contribute significantly to green energy production, they do not receive adequate local benefits. They argue that a development contribution would create a direct incentive to accelerate renewable energy expansion on land and foster balanced development throughout the country. This would allow frontrunner municipalities to further develop their strengths in this area, similar to the opportunities available to larger cities.