Supporting Renewable Energy Development. A case study of the political process on feed-in schemes in Denmark leading up to the agreement on energy policy in 2012.

Abstract

An increase in renewable energy in a country’s energy mix is one of the measures countries can take in order to mitigate climate change. One way of increasing the renewable energy share in a country’s energy mix is through support schemes. This thesis investigates the political process on support schemes in Denmark from 1999 to 2012. In 1999, Denmark started liberalizing their renewable energy market, and there were a subsequently drop in investments in renewable energy. However, in 2006 the incumbent government made a U-turn on their planned liberalization, and gradually increased the level of the support scheme. The support scheme in Denmark’s case, were feed-in tariffs and feed-in premiums. The U-turn in 2006 paved way for the current energy agreement in Denmark, which were agreed upon in 2012. The research question for this thesis is: how can the Danish energy agreement from 2012 be explained? Applying path-dependency and political field perspectives, this article analyses the political process on feed-in tariff and feed-in premium in Denmark from 1999 to 2012. The results from this thesis suggest that the changes can be explained as political competition, were politicians view the political issue as having high salience and therefore engage in political competition as they believe it will help them get elected or re-elected. In addition, the results suggest that the outcome can be explained by the Fogh Rasmussen having ill-defined preferences and not a clear understanding of the functioning of the feed-in scheme from 1999 to 2001. Nonetheless, after 2006 the Fogh Rasmussen cabinet gained an environmental and energy agenda in line with the opposition, which paved the way for the 2012 energy agreement. In addition, the liberalization from 1999 to 2005 can be explained as a reaction to Denmark spending too much money on climate change policy. Subsequently, the U-turn in 2006 leading up to the 2012 energy agreement can be explained as a reaction to the liberalization and the pressure the government received from the industry and other political actors to reinstate a higher level of feed-in support. On the other hand, the policy outcome of the 2012 energy agreement can be understood as being reinforced since the 1980s, and therefore difficult for the Fogh Rasmussen cabinet to change.