26. april 2006
On 26 April 2006 an agreement between the the Danish energy company Elsam A/S and the Association of Danish Producers of Straw was presented to the Danish Competition Council. The agreement outlines the procedures for Elsam’s purchases of straw for production of heat and power. The agreement is a response to misgivings by the Danish Competition Authority about the previous system design for purchases of straw for energy production.
The Danish Competition Council has not approved the agreement. The agreement, however, does imply a number of elements which the Council finds competition-promoting on the market for straw used for energy production.
The state-owned energy group DONG will soon take complete control of Elsam and the other Danish electricity generation incumbent operator, Energi E2 A/S. DONG has informed the Danish Competition Authority that it will strive to achieve a similar agreement for Energi E2’s purchases of straw. Accordingly, the new and improved procedures for purchases of straw for energy production will apply to both Elsam and Energi E2.
Some of the main principles of the agreement are:
- In the future, Elsam will purchase straw through a public procurement procedure.
- Tenders are not to be opened until the time limits for the receipt of tenders have expired, and all tenders are to be opened by Elsam together with an impartial supervisor.
- Elsam retains its right to reject all tenders and, subsequently, Elsam can call for new tenders no earlier than three months after the rejection. Should Elsam award only a part of the tenders, the awarded contracts must comprise a substantial part of the straw needed by Elsam.
- The producers cannot carry out a preceding regulation by their tenders.
For additional information, please contact head of division, Jacob Schaumburg-Müller (+45 7226 8145) or head of section, Ulrik Laudrup (+45 7226 8137).