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Gas Pipeline Faces New Political Headwinds

High connection prices challenge local companies' green transition. Minister will not answer questions

FemernBusiness has previously revealed that the connection price has multiplied since the first agreements were signed.
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When the Danish Parliament decided in 2021 to build a gas pipeline to Lolland-Falster, it was sold as a victory for the green transition and energy supply in the area. The gas pipeline was supposed to ensure, among other things, that Nordic Sugar's sugar factories could phase out coal and instead use more climate-friendly energy forms. At the same time, more local companies were supposed to have the opportunity to connect - but it has turned out to be much more difficult than expected.

The reality has changed dramatically since the decision. Evida, the state's gas distributor, has significantly increased the connection prices.

FemernBusiness previously revealed that the connection price has been multiplied since the first agreements were signed. This has left Nordic Sugar as the only customer. Companies like Maribo Asphalt Factory and Metalcolour had otherwise entered into agreements and planned to switch to gas, but the high prices forced them to withdraw. According to local companies, the price has become so high that they cannot make the finances work if they chose to connect.

- It is a problem that it is not attractive for local businesses to connect to the gas pipeline, says Søren Egge Rasmussen, energy spokesperson for the Red-Green Alliance Enhedslisten.

He has followed the issue since the political decision to establish the gas pipeline and has never been a fan of the solution. But now it is there, and it gives industrial companies the opportunity to get a fairly large share of biogas as an energy source. Natural gas is not particularly good for CO2 emissions, but the natural gas network, of which the gas pipeline to Lolland-Falster is a part, is well filled with biogas (just under 40 percent). Therefore, it makes good sense for companies to be connected.

- It is important that we as legislators make it advantageous to connect to greener energy. And it does not seem to have happened here, says Søren Egge Rasmussen.

The growing dissatisfaction with the gas project has now reached Energy and Climate Minister Lars Aagaard (M), who has been asked several questions in the Folketing about the matter.

Most recently, it is Søren Egge Rasmussen from the Red-Green Alliance: 'Does the minister believe it was a good decision to build a gas pipeline to Lolland, in light of the fact that the establishment became much more expensive than expected, and that the connection prices now make it almost impossible for anyone other than the sugar factory to use the gas pipeline?'

A question Lars Aagaard answered by regretting that the gas pipeline had become more expensive, but he did not mention the connection price with a word.

It is important that we as legislators make it advantageous to connect to greener energy. And it does not seem to have happened here.

Energy spokesperson Søren Egge Rasmussen (Ø)

Lars Aagaard will also not answer questions from FemernBusiness about the matter. On four political questions regarding the matter, he refers to Evida, which as the state's gas distributor is responsible for the economic conditions.

Stops Green Transition

Henrik Høegh (V), former Minister of Food and Deputy Mayor of Lolland Municipality, directs sharp criticism at Evida. As a former chairman of the industry organization Dansk Biogas, he has been a strong advocate for the gas pipeline.

He believes that Evida's financial priorities undermine the purpose of the gas pipeline:

- I am dissatisfied that a company like Evida is putting a stop to the green transition. It seems as if they now need to consolidate financially, and they just pass that bill on. It hinders companies that otherwise want to contribute to a greener future, says Henrik Høegh.

Evida: The World Has Changed

Evida states that they ensure a stable and secure gas system and support the green transition by connecting biogas plants and companies to the gas infrastructure.

And that the price for a connection depends on how many customers are connected, similar to district heating projects. Evida has made it clear that the costs are uncertain due to technical factors such as routing, distances, environmental conditions, and the placement of regulation stations.

The connection prices, which are regulated by the Utility Regulator, were harmonized in 2023, Evida reports. Customers now pay directly for their connection costs, whereas previously a portion of the payment could be spread over several years. Evida's earnings are not affected by the new model, according to the gas distributor.

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