Denmark’s power utility said on Monday it has a long term power deal with Germany that could see it supply power to Germany for another 10 years.

Power generation company Helvac is the largest power provider in Denmark and its chief executive, Lars Nyland, told parliament that the long-time arrangement with the German utility, which was agreed after the country was declared bankrupt, had “the potential to create an even stronger relationship”.

He added that Helvaca would not only be able to deliver the electricity that Germany needs, but also provide for future projects in Europe.

But the German government, which has criticised Helvacan for overstating its renewable energy capacity and has called for it to be sold off, has warned that the deal would have to be renegotiated. 

It said that it would be in the interests of all concerned that Helvaac should be sold. 

The Danish utility said it would begin work in 2020 on a contract that would see Helvaclas power generated from renewable sources, including from wind and solar, but that it was “still in the process of assessing its renewable portfolio” and that the final decision was still in the hands of the German state.

Nyland said the power would be delivered from Helvacs “bulk capacity”, meaning that it will be able generate the electricity needed for the entire country, but it would still have to come from renewable resources.

“We think it’s fair that we can produce power from the same sources as Germany,” he said.

“The whole point is to get a good deal for the German public, but we also want to ensure that we don’t harm our relationship with the other countries, the German and Danish partners.”

The long-awaited deal would see the Danish utility buy a 20 per cent stake in Helvaac from German utility RWE. 

“We will get a significant investment from Germany in terms of power generation and we will be part of a huge German-led project to get our electricity to market from renewable energy,” Nyland said.

“I believe this long-standing relationship is an excellent one.”

The deal has been controversial in Denmark, with a group of opposition parties and environmentalists demanding that Helvanac should go. 

Nylands comments came amid criticism that Helvidac had been short-listed for the contract for the power in 2020.

Critics say that the government’s decision to award the contract to Helvap is part of an effort to protect the energy sector.

The government has defended its decision to select Helvaci, saying it was not about money but rather about “protecting the interests” of the Danish people.

“The state has an interest in ensuring that Helavaca can fulfil its role in the power supply,” said Helvác’s deputy president, Lars Fiedler.

“In this regard, Helvavac is part and parcel of the state’s energy portfolio.

It is part the power grid.

It’s part of the transmission network.”

But Helvacid, which also supplies electricity to the capital, Copenhagen, and is also part of Helvas renewable energy portfolio, says the deal has not gone far enough.

“There are a lot of things that we are trying to do, including the purchase of Helvaaclas shares,” Nylands told parliament.

“But we want to make sure that we protect the interests, that Helvas are able to fulfill their role in providing power to the Danish population.”