EC Finds Danish Transmission System Operator's Contract with DONG Energy
OREANDA-NEWS. In December 2010, Energinet.dk signed a contract with DONG Energy, a Danish energy company, for ancillary services in the eastern part of Denmark. The contract ran from January 2011 until the end of 2015. It required DONG Energy to supply electricity to the network at short notice to ensure the balance and technical stability of the Danish electricity system.
Following competitor complaints alleging that DONG Energy received State aid through the five-year contract, the Commission opened an in-depth investigation into this contract in 2013, which allowed Denmark, market participants and other interested parties to submit their views on the measure. In particular, the Commission examined whether the contract conferred any selective advantage to DONG Energy for the services provided. If it was not on market terms, the measure would have involved State aid within the meaning of the EU rules. In that case, the Commission would have examined whether it was compatible with common criteria that allow Member States to grant State aid if it furthers certain common interest goals without unduly distorting competition in the Single Market.
The Commission has now concluded that the contract between Energinet.dk and DONG Energy conferred no selective advantage on DONG Energy, taking into account comments received from third parties and further information submitted by Denmark. The Commission further assessed the price paid to DONG Energy and compared it against the price of potential alternative sources, and concluded that Energinet.dk secured a competitive price for the required ancillary services in eastern Denmark.
In 2011 the Commission received complaints alleging that changes to the market for ancillary services in Denmark meant that the State aid to combined heat and power plants previously approved by the Commission in November 2005 overcompensated decentralised combined heat and power plants and that DONG Energy received State aid through the contract for ancillary services. In 2013 the Commission concluded that combined heat and power plants were not overcompensated and that the aid approved in 2005 remained compatible. At the same time, it opened a formal investigation procedure into the above-mentioned contract with DONG Energy for ancillary services.