The Virtual Power Plant Capacity is offered at four auctions each year. The first auction will take place in the fourth quarter of 2005.

These pages will provide general information on the auction design, eligibility criteria and credit rules.

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Eligable bidders
All participants in the VPP auctions must be approved by the Danish Competition Authority prior to each auction.

I. The Prospective Bidder shall be a legal entity falling into at least one of the following five categories:
•    i. generator of electricity
•    ii. electricity distribution company
•    iii. end consumer of electricity iv.
•    iv. energy trader .
•    v. transmission system operator ("TSO")

II. The Prospective Bidder fulfils all requirements imposed by the DK1 TSO for physical delivery of electricity on the DK1 transmission grid. This criterion may be fulfilled through a duly signed Balance Obligation Agreement between the Prospective Bidder and the DK1 TSO or through an agreement with an Appointed Third Party who has entered into a Balance Obligation Agreement with the DK1 TSO.

Auction Design
Each Product will be auctioned in a parallel Anglo-Dutch Hybrid auction. The Anglo-Dutch Hybrid Auction Design has been chosen because it is well known in the market, also for the auctioning of Virtual Power. Furthermore, the Anglo-Dutch Hybrid Auction design enables DONG Energy Power to fulfil its commitment to the sale of VPP Capacity.

Specific information on the auction process and the Anglo-Dutch Hybrid auction design is available in the Confidential Section of this website.

Credit Rules
Bidders must comply with different credit rules in the various stages of the DONG Energy Power Virtual Power Plant Auctions.

The Bid Security: A party who is eligible to participate in the VPP Auctions may request to qualify for the VPP auctions. The Bid security is a guarantee to ensure adherence to the Auction Rules and it must be in place prior to the VPP Auctions.

The Option Security: Owners of VPPs will be obliged to provide DONG Energy Power with an Option Security. The Option Security is a security against non-payment of the total option price, in the form of a bank guarantee.

The Energy Price Security: When the daily nominations are deemed to be final, the VPP owner is obliged to pay the agreed Energy Price times the number of MWh nominated at the day of delivery. In order to secure payment of this obligation, owners of VPPs will be obliged to provide DONG Energy Power with an Energy Security in the form of a Bank guarantee.

Specific information on the credit rules is available in the Confidential Section of this website.