Europe > Northern Europe > Denmark > Denmark Energy Profile

Denmark: Denmark Energy Profile

2015/03/09

 biking in denmark

Denmark, officially the Kingdom of Denmark, is a Scandinavian sovereign national in Northern Europe, with Greenland and the Faroe Islands as additional overseas constituent nations, forming integral parts of the Danish Realm. Continental Denmark is the southernmost of the Nordic nations, located southwest of Sweden and south of Norway and bordered to the south by Germany. Denmark consists of a large peninsula, Jutland, and a lot of islands, most notably Zealand, Funen, Lolland, Falster and Bornholm, inclunding hundreds of minor islands often referred to as the Danish Archipelago. The Kingdom of Denmark is a constitutional monarchy organised in the form of a parliamentary democracy, with its seat of government in the capital city of Copenhagen. Denmark is unitary, with powers to manage internal affairs being devolved from the central government to Greenland and the Faroe Islands; this polity is referred to as the Danish Realm. Continental Denmark is the hegemonial area, where judicial, executive, and legislative power reside.

The Faroe Islands are defined to be a community of people within the kingdom, and the Greenlandic people are defined as a separate people with the right to self-determination. One of the results of this arrangement is that Denmark became a member of the European Union in 1973, but both Greenland and the Faroe Islands have opted to remain outside the EU. Originally the home of the Vikings, Norse seafaring explorers who invaded and settled in a lot of parts of Europe and Russia, Denmark emerged as a unified kingdom in the Middle Ages. Denmark's later history has particularly been influenced by its geographical location between the North and Baltic seas. This meant that it was between Sweden and Germany and thus at the center of the mutual struggle for control of the Baltic Sea; before the digging of the Kiel Canal, water passage to the Baltic Sea was possible only through the three channels known as the Danish straits.

Denmark was long in disputes with Sweden over control of Skånelandene and Norway, and in disputes with the Hanseatic League over the duchies of Schleswig and Holstein (a German fief). From presently on Denmark lost the conflicts and ended up ceding initial Skånelandene to Sweden and later Schleswig-Holstein to the German Empire. Denmark obtained Greenland and the Faroe Islands in 1814 next the dissolution of a personal union with Norway, although the Danish monarchy, which had ruled over both Norway and Denmark, had been in possession of the colonies since the fourteenth century.

A founding member of the United Nations, NATO and the OECD, Denmark is as well a member of the Organization for Security and Co-operation in Europe. With a highly developed mixed market economy and a large welfare national, Denmark ranks as having the world's highest level of gain equality, and has one of the world's highest per capita gain. It has frequently ranked as the happiest and least corrupt country in the world. In 2011, Denmark was listed 16th on the Human Development Index (8th on the inequality-adjusted HDI), 3rd on the Democracy Index and 2nd on the Corruption Perceptions Index. The national language, Danish, is closely related to Swedish and Norwegian, with which it shares strong cultural and historical ties. Denmark, along with Sweden and Norway, is part of the cultural region known as Scandinavia and is as well a member of the Nordic Council.

Energy sources



Over the completed decade, Denmark has developed an enviable record of growing the share of renewable energy in its total primary energy supply (TPES). Since 2000, it increased at an average rate of 6.6% per year reaching 19.4% of TPES in 2009. Estimates indicate that production of renewable energy increased by a further 13% in 2010.

Electricity imports were 11.7 TWh and exports were 10.38 TWh, resulting in net exports in 2011 of -1.32 TWh. In 2011 there was a large import from Norway and Sweden and export to Germany.

Extend network

The supply system is historically robust, with only few system failures. Nevertheless, the European objectives on renewable energy could pose a challenge to the supply system. ENTSO-E has predicted power balance problems for Denmark in winters starting from 2016. The Great Belt interconnection between Eastern and Western Denmark has operated from August 2010. Despite intensive usage, existing price differences between Danish regions may make further expansion of capacity necessary.

Renewable energy



Wind Energy

Denmark is one of the majority aggressive nations in the world for wind power and has a relatively long history using it. Since 1988 Denmark has built nearly 3,400 MW of wind capacity. Currently, wind power provides about 20% of Denmark’s electricity through additional than 5,200 wind turbines, and this is an increase from 2% in 1990. The vast majority of this wind turbine-generated electricity is onshore, but as available land is becoming scarce, an increasing number of wind turbines are found in offshore wind farms.



Denmark’s goal is to meet 50% of its electricity needs with wind energy by 2025, inclunding a near doubling of their wind power capacity to 6,000 MW. They are as well investing in the infrastructure to support electric cars, so that wind power will be powering some of their transportation needs.



Biomass consumption (wood and straw) in the Danish electricity sector is divided between both power stations and local CHP plants. Around two?thirds of the straw and wood is consumed by power stations, while one?third is fired at the 15 or so small local biomass plants. Some 147 local CHP plants – with a combined capacity of 80 MW – use biogas as a fuel. In 2010, power generation from biofuels totalled 3,068 GWh. It has remained relatively stable from one year to the next, but biofuels?based power generating capacity has been increasing in Denmark in recent years.



Hydro


Hydropower makes a very small contribution to renewable electricity supply. Denmark has 38 small?scale hydroelectric power plants, which in 2009 generated a total of 19,795 MWh. The major plant, Tangeværket at Gudenåen, has an installed capacity of 3.9 MW.

Energy efficiency

Electricity

In 2010, at the generation level, the market was dominated by two large players, Dong Energy and Vattenfall, who together accounted for almost two thirds of the total capacity. The remaining third was provided by a large number of smaller companies, inclunding cooperatives and municipal companies. Market integration with neighbouring markets is adequate. In the Nordic nations, roughly 75% of energy is traded on the power exchange, Nord Pool Spot (NPS). Volume coupling is used by the EMCC on the borders with Germany. In November 2010 this coupling was extended to the Central Western Europe region, and about 60% of Europe’s electricity is connected via this new coupling. Danish electricity is traded on the Nord Pool power exchange. The country is divided into two market areas, East and West. The average wholesale price in 2011 for baseload power was EUR 49.4/MWh for the East (a decrease of 13.5% compared to 2010) and EUR 48.0/MWh for the West (an increase of 3.3%).




There are a total of 55 suppliers of electricity to households in Denmark. Each of the 33 supply obligation companies has been granted a concession for a specific geographic region where they supply households and small businesses that have not concluded an individual arrangement. Between 90 and 95% of the Danish households and small businesses are supply obligation customers.

Competition



Many new players have entered the electricity market since the liberalisation. The majority significant step towards the free electricity market was taken in 1999 with an EU directive on full liberalisation of electricity markets. This led to the unbundling of the transmission grid from electricity generation. The grid is presently independent, and all electricity market players have equal opportunity to use it.

Energy Strategy 2050: From Coal, Oil, and Gas to Green Energy

The hallmark of Denmark’s energy policy is independence from fossil fuels. In fact, the Danish Government’s February 2011 Energy Plan, called “Energy Strategy 2050: From Coal, Oil, and Gas to Green Energy”, states this in general goal in its title. The plan states its major goal is independence from coal, oil, and gas by 2050, which in turn will result in Denmark maintaining a fasten stable supply of affordable energy and helping to limit world climate change. In addition, achieving this goal will provide economic opportunities for Danish green energy technologies within its own borders inclunding in the world market, and will minimize Denmark competing for a shrinking supply of fossil fuel supplies, a lot of of which are in unstable nations.




National Renewable Energy Action Plan

In 2020, the Danish Renewable Energy Action Plan expects almost 52% of total electricity consumption to be met by renewables. Almost 60% of this will be wind, with biomass, essentially, making up the rest.




The Agreement lists a large number of actions to be taken during the period 2012 – 2020. These actions will result in additional than 35% renewable energy in final energy consumption in 2020. As the Agreement does not go beyond 2020, it does not lay out in detail the path from 2020 to 2050, which will lead to 100% renewable energy in 2050. The Agreement includes 62 actions covering the following areas: energy efficiency, renewable energy for electricity production, district heating, combined heat and power production, use of renewable energy in households and industries, smart grids, biogas production, use of electricity and renewable energy for transport, research, development and demonstration and finally financing of the Agreement.

Energy debates

Nordic Energy Research

Nordic Energy Research is the platform for joint Nordic Energy Research and policy development under the auspices of Nordic Council of Ministers. It promotes cooperation in research and policy between Denmark, Finland, Iceland, Norway and Sweden.

Role of government



Danish Energy Agency (DEA)

The Danish Energy Agency (DEA) was established in 1976, and is an agency under the Ministry of Climate, Energy and Building. It is responsible for all tasks related to the production, transmission and utilisation of energy, and its impact on climate change. Its principal function is to ensure the legal and political framework for reliable, affordable and clean supply of energy in Denmark.

Government agencies



Commission on Climate Change Policy

The independent Danish Commission on Climate Change Policy was established by government in 2007 and was charged with the task of identifying the long?term climate and energy policies needed to achieve independence from fossil fuels. The Climate Commission’s proceedings were attended by the Ministry of Climate, Energy and Building, the Ministry of Economic and Business Affairs, the Ministry of the Environment and the Ministry of Finance. The Commission published its findings in September 2010 and ceased activities in November 2011.

Energy procedure



The Danish transmission system operator Energinet.dk is responsible for planning the Danish electricity network. The TSO published network expansion projects as part of the yearly system plans. Scenarios used in the grid planning process are developed initial by the TSO, with collaboration from external experts in the field. Market simulation and internal grid modelling is again done by Energinet.dk, informing the production of an expansion plan. This plan is again submitted to the Ministry of Climate, Energy and Buildings (MoCEB) for review, with a mandated 6-week lag period before project implementation can begin following plan submission.

The Danish Energy Regulatory Authority (DERA) regulates the Danish markets for electricity, natural gas and district heating.

Degree of independence



The secretariat consists of three individual energy divisions (natural gas, electricity, and heating). The secretariat of DERA is managed by Director General Finn Dehlbæk.

Regulatory framework

 

 

  • A Feed-in Tariff (FIT) for electricity from biogas or gasification from biomass (min. 94% of biogas) - 0.745 DKK/kWh (approx. 10 cEUR/kWh) for 20 years.
  •  

     

  • A Feed-in Premium (FIP) paid on the top of the electricity market price for electricity from biogas and other fuels (max. 94% biogas) - 0.405 DKK/kWh (approx. 5.5 cEUR/kWh) for 20 years.
  •  

     

     

  • 50% of manure has to be utilised via anaerobic digestion by 2020
  •  

     

  • Each municipality is obliged to point out localities approved for the construction of biogas plants
  •  

     

  • Financial support to plants: 20% of governmental subsidy and 60% loan from municipality for investment
  •  

     

  • Equal opportunities for biogas as natural gas supplier.
  •  

     

     

  • Basic – flat rate paid for each kWh or GJ of energy produced from biogas, respectively to utilisation
  •  

     

  • New - will be decreasing with the rise of natural gas price, paid on the top of the basic tariff. The reference price was set at approx. 53.2 DKK/GJ on the NordPool gas market.
  •  

     

  • Temporary - will be reduced by 2 DKK annually through the years from 2016 to 2020.
  •  

    In the electricity market, the regulation focuses on the network companies. However, DERA as well sets the allowed price for electricity companies with an obligation to supply (i.e. the companies that supply customers who have not chosen their own supplier in the free market).



    In the district heating market, both production and network companies are monopolies and regulated as non-profit undertakings. DERA monitors their prices and delivery terms, and DERA takes regulatory action if the prices and terms of the network companies are not in line with the non-profit regime – or if they are unfair in any other way.

    Energy regulation role

    The in general conditions for the integration of electricity from renewable energy sources in Denmark are considered to be good. No severe barriers have been detected.