Dong to spend $795m converting fossil to heat and power plants

Danish state-controlled utility, Dong Energy A/S, plans to invest about $795m to convert three of its coal- and gas-fired power stations to generate heat and electricity from wood pellets.

Bloomberg reports that the Danish plants will have a capacity of about 1 GW.

“If all goes well then we hope to decide on all the conversions in the first half of 2013 and then the construction phase will last between one to three years so that these three units will be converted by 2015,”Executive VP Thomas Dalsgaard said.

Denmark plans to cut its energy consumption by 12 per cent by 2020 from 2006. It already gets 70 per cent of its renewable-energy use from biomass such as straw, wood and waste.

Lower taxes on biomass than coal and gas power generation encouraged Dong Energy to convert the plants.

The decision on whether to proceed depends on securing environmental permits and long-term agreements with heating customers, Dalsgaard said.

Dong, which owns 17 coal and gas- fired power plants, plans to lower carbon-dioxide emissions in power and heat production per energy unit produced to 15 per cent of 2006 levels by 2040, according to its website.

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