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This paper surveys the development of the policies supporting the introduction of wind electricity in Denmark in the last 15 years, with special attention to the new policy introduced after a 2-year long debate. The aim of this paper is to explore the roles of financial support, policy certainty and planning constraints in the diffusion of wind electricity in Denmark and the reasons prompting the change of the system in the current decade. It is discovered that political uncertainty has badly affected the effectiveness of the feed-in law in the years immediately after its introduction. With regard to the new system, it is concluded that the change has been prompted by generous conditions under the feed-in law and by the desire to facilitate the modernisation of old turbines. It is also concluded that incentive-based systems can be more effective than tradable quotas in promoting the modernisation of renewable plants. This finding is relevant to the development of energy policy in countries such as Germany and Spain, where the average age of wind turbines is much younger than those existing in Denmark.

This comment aims at critically analyzing some of the economic efficiency issues that are raised in the paper by Muñoz et al. [2007. Harmonization of renewable electricity feed-in laws in the European Union. Energy Policy 35, 3104-3114] on the harmonization of feed-in law schemes for renewable electricity in the European Union. We comment on the choice between green certificate systems and feed-in laws, but pay particular attention to the implementation and design of a harmonized feed-in law scheme. In the comment we argue first that the approach suggested by Muñoz et al. tends to downplay many of the practical difficulties in assessing the real costs facing investors in renewable electricity, not the least since the presence of regulatory uncertainty about the marginal costs of renewable electricity may be essential for the choice between different support systems. Concerning the benefit side of renewable electricity promotion, the Muñoz et al. (2007) paper builds on an interpretation of the EU Renewables Directive that provides plenty of room for national priorities and that therefore essentially implies that harmonized support premiums per se are of little value. We argue instead that a harmonized system should primarily address the international spillover effects from renewable electricity promotion, not the least those related to improved security of supply in Europe. There exists then a strong case for disregarding the specific national benefits of renewable electricity production in the design of harmonized support systems, and for instead considering international-perhaps at the start bilateral-policy support coordination based on entirely uniform support levels.