The European Commission has approved a €400 million (£346m) Danish state aid scheme which is designed to support renewable energy production.
Denmark plans to support renewable energy projects through a tendering process that will start later this year and will last until 2024.
The scheme provides two-way contracts-for-difference – that means when the electricity price is below a reference price established based on an auction, the state pays the renewable electricity producer the difference between the actual electricity price and the reference one.
In contrast, when the electricity price is above the reference price, the electricity producer pays the state the difference between the actual electricity price and the reference one.
The scheme aims to provide producers with long-term price stability and help them invest in clean energy.
Executive Vice-President Margrethe Vestager, in charge of Competition Policy, said: “This Danish scheme will contribute to substantial reductions in greenhouse emissions, supporting the objectives of the Green Deal.
“The wide eligibility criteria and the selection of the beneficiaries through a competitive bidding process will ensure the best value for taxpayers’ money and will minimise possible distortions of competition.”