Policies in Denmark

Denmark expects to achieve a renewable share of total energy consumption of 74 per cent by 2030.  The share of renewable energy use in electricity production (RES-E) was 79 per cent in 2023. It is expected to exceed 100 per cent in 2028. In the heating and cooling sector, the share of renewable energy (RES-H&C) is expected to reach 81 per cent in 2030. Share of innovative renewable energy sources, such as geothermal, large heat pumps for production of district heating, PtX, exploratory wind turbines, renewable generation associated with energy islands, storage capacity for stocks linked to wind turbines and photovoltaic parks, seasonal storage for solar thermal, and pyrolysis gas, is expected to be 24 per cent in 2030, exceeding the 5 per cent target (NECP Denmark, 2024). 

This section covers the permitting and authorization process for offshore wind, onshore wind, ground-mounted solar PV, and rooftop solar PV. These technologies have been chosen as the most relevant in the Danish NECP. Offshore wind is expected to increase from 24 per cent in 2022 to 65 per cent in 2030 (NECP Denmark, 2023). It has been decided to establish two so-called “energy islands” with a total capacity of 5 GW by 2030, which will further increase the share of renewable energy from offshore wind turbines (NECP Denmark, 2019; Climate Agreement, 2020). Solar is expected to account for 46 per cent of the renewable energy share in the electricity sector in 2040 – an increase from 6 per cent in 2022(NECP Denmark 2023). The expansion towards 2030 is generally expected to be mostly covered by utility-size ground-mounted plants, but as especially the larger rooftop solar PV installations placed on commercial and industrial buildings also offer significant growth opportunities, both forms are covered (NECP Denmark, 2019).

With the 2022 Climate Agreement on Green Power and Heat, an agreement was reached to launch a service check and analysis work to remove regulatory barriers and shorten authorization processes for the development of offshore wind. Additionally, a number of initiatives for faster planning processes in municipalities connected to onshore wind were launched. Multiple actions for simplifying permit-granting process for both onnshore and offshore installations have been taken as well as establishin one-stop shops-Danish Energy Agency (NECP Denmark, 2024). 

1. Site selection 2. Electricity Production License 3. Application preparation process (wind energy offshore only) 4. Administrative authorization 5. Grid connection

• DEA
• DEPA
• Minister for Climate, Energy and Utilities
• Municipal councils
• DTCHA
• DCA
• Conservation Board of Appeals
• DMA
• DCD
• DSOs
• TSO

District heating is very widespread in Denmark. In 2030, district heating is expected to cover 53 per cent of the heating demand. This is predominantly due to the mandatory expansion of the district heating system and orders from the central government to the municipal authorities to expand the district heating network wherever possible. There are 350 district heating companies with 50.000 km of pipelines. The average efficiency of DH in Denmark is very high due to combined heat and power and integration of renewable energy sources. 

District cooling is still limited, but is slowly growing in bigger cities. It is mostly used in hospitals, data centres, and commercial buildings. 

Municipal authorities are responsible for the planning of the heat grid and must consider social and environmental factors when adding new heat suppliers to the grid. This also entails that the municipal authorities are responsible for the planning and construction of new heat suppliers (e.g., waste burning facilities or industries with waste heat) (§6 Law on heat supply). Furthermore, the Ministry of Climate, Energy and Utilities has issued an executive order that municipal authorities must produce a report on the environmental impact of the construction of new heat supplying plants (§6 Executive Order on approval of projects for heat supply). The Ministry also specified that plans for heat generation from coal or oils used for food cannot be approved (§10 Executive Order on approval of projects for heat supply).

Priority to renewable energy §1(1) of the law on heat supply states that the purpose of the law is to promote environmentally friendly sources of heat production.

Municipal authorities are responsible for planning the expansion of the heat grid in the municipality.

DMoCEU

Grid ownership
Energinet, an independent public enterprise owned by the Danish state under the Ministry of Climate and Energy, owns the high-voltage backbone electricity grid.
The utilities and distribution companies own the low-voltage distribution grid.

Island interconnection
Yes

Island TSOs and DSOs

All Danish islands remain connected to the grid, and there are no specific rules for islands. However, commercial direct lines for high-voltage producers and consumers have been given new authorisations to bypass collective grids in some cases.

The DSOs relevant to islands are: 

• Cerius
• FLOW
• Læso
• N1
• NOE
• Radius
• Ravdex
• Veksel
• Vores Elnet
• NRGi (Samsø)

Development of electricity grids for RES integration
Through a new producer charge, as of January 1st 2023, renewable electricity production plants contribute to the development of the electricity grid. The producer charge focuses on new transmission fees and contributions to grid development, ensuring a robust infrastructure for renewable energy integration.

Specifications for islands, isolated grids, microgrids, local grids, etc.
The political majority agrees to an exception to the general rule that electricity must be transported and distributed through the collective electricity grid. The exception concerns the authorisation for constructing commercially owned direct lines for electricity consumers and producers of a 10 kV voltage level and above.

Connection procedure 

Connecting to the Danish grid is non-discriminatory from a RES viewpoint. Energy suppliers must comply with Commission Regulation (EU) 2016/631, as well as requirements set out by the Ministry of Climate, Energy and Utilities and the Danish transmission grid operator (Energinet).

Rules concerning the connection of a new producer to the grid

There are specific standards defined in the Electricity Supply Act that need to be met to connect to the grid, such as providing electricity with a certain voltage and frequency.

Rules for connecting RES and storage to the grid

RES plants need to meet certain standards, just like any other energy production plant, to be connected to the grid. The DSO can set additional technical requirements.

Access to electricity from renewable energy sources to the grid is mainly governed by the general legislation on energy and shall be granted according to the principle of non-discrimination. Electricity from renewable sources is subject to special provisions only with regard to the use of the grid, in which renewable energy shall be given priority. If having more than 1 MW of storage, a producer can offer balancing of the grid and get paid for it.

A new producer charge for renewable energy production plants was introduced on January 1st 2023. One part of the charge is a station fee for production plants that are connected to the transmission network and a transformer fee for production plants that are connected to the distribution level. Another part of the charge is the standard grid connection fee, through which producers will be contributing to the necessary grid development.

The Electricity Supply Act does not provide any details on the connection to the Danish grid, but leaves this to the Ministry of Climate, Energy and Utilities to specify. In general, the process to gain access to the Danish TSO energy grid consists of four steps: 

• Preparation;
• Current setting permit (EON);
• Temporary operation permit (ION); and
• Final operation permit (FON). 

Furthermore, the plant must comply with the Commission Regulation (EU) 2016/631. Preparation in the preparation stage, plant developers must provide documentation to their grid operator on the proposed plant to connect to the Danish grid. Then, a decision is taken by the grid operator and Energinet on whether the plant will be connected to the distribution grid or the transmission grid. A second part concerns the concretisation of the project between the plan owner and Energinet, which can take up to 3.5 years. In this part, the plant owner and Energinet discuss any changes that need to be made to the plan or to the grid (e.g., expanding the capacity of the grid in the area of the proposed plant). Finally, the plant owner and Energinet conclude a contract for the building of the plant. Current setting permits. Once the plant is constructed, the plan owner must apply for a current setting permit (EON). Temporary operation permit. The plant owner must provide documentation that the plant complies with EU rules on power generators and a plan for the testing phase of the power plant. The temporary operation permit (ION) may be issued for a period of a maximum of 2 years. The plant owner conducts the necessary tests, and Energinet reviews the results to ensure compliance with standards. Final operation permit If the testing phase results in a pass, Energinet will issue a final operation permit (FON). For connection to DSOs, the procedure varies depending on the DSO. However, in general, the procedure requires pre-approval from the DSO and a building permit from the municipality, then a positive reply from the DSO. Once the installation is complete according to the specifications given in the pre-approval form, the installer requests the final approval from the DSO. Approval process The approval process for connection to a DSO requires that the RES installation owner contacts a certified installer who fills out the pre-approval form from the DSO, as well as the RES specification and data form from Dansk Energi (lobby organisation for Danish energy companies). Installation and connection to the grid. The installer constructs the RES installation and notifies the DSO of the construction, who will install a meter at the RES installation and connect it to the grid. After which, the RES installation will be in operation.

Specifications for islands, isolated grids, microgrids, local grids, etc.

There are no specifications.

Exceptions

There are no measures on energy sharing or energy communities in Denmark, as legislation does not currently support the sharing of electricity between individuals. However, a scheme which supports local citizen initiatives to secure loan guarantees for feasibility studies of RES plants does exist in Denmark [2]. Though this does not extend to sharing energy or creating energy communities, as the support no longer applies past the planning stages. On the other hand, a measure on net-metering allows for prosumers to pay a reduced charge on electricity produced from their own solar panels or wind generators, as long as the electricity is consumed within the hour. The Ministry of Climate, Energy and Supply can create special regulations for prosumers and energy communities regarding participation in the electricity market, consumption, production, storage, and rules on balancing responsibilities based on the EU’s Electricity Market Directive.

Possibilities to differentiate RES in scale and technology

In recent years, a shift has been made from technology-specific support to a higher degree of technology neutrality and a more market-based approach, through, e.g., multi-technology tenders. Support for certain technologies (e.g. biomass) has also been phased out recently.

In 2023, a new producer charge was introduced. This charge requires renewable energy producers to contribute to grid development through station and transformer fees. 

Connection Fees and Producer Charges:

The new producer charge introduced in 2023 is still active, where renewable energy producers contribute to grid development through station and transformer fees. This charge is critical for scaling up the grid to meet increasing renewable energy integration.

Rights and obligations of customers and prosumers
Consumers can freely choose their electricity provider and have the right to access their consumption information without being charged for it. They have to pay TSO’s and DSO’s services. The Ministry of Climate, Energy and Supply can create special regulations for prosumers and energy communities regarding participation in the electricity market, consumption, production storage, and rules on balancing responsibilities.
Prosumers can store energy behind the meter and distribute it throughout the day, but they have to pay a net tariff even if they do not provide electricity to the grid.

Rights and obligations of plant operators
When necessary, Energinet may determine new conditions for changing the production to maintain efficient use of the grid, security of electricity supply, and quality of supply. Plant operator has to notify the authorities one year in advance if a production unit is closing down.
There are no special rules for RES.

Task of the TSO/DSO
The TSO is responsible for the operation of the electricity system and for maintaining security of supply. It ensures that enough electricity production capacity is present in accordance to the European Commission’s regulation on establishing guidelines for the operation of electricity transmission systems. The DSOs should provide data to the TSO for the purpose of gathering error and interruption statistics. DSOs have to ensure sufficient and efficient transport of electricity, maintain, connect suppliers and buyers to the collective electricity supply network, provide necessary transport capacity and measure the electricity in the grid.

What is the role of the National Regulatory Agency (NRA)?
NRA administers energy and supply, ensuring consumer protection and security of supply. They are promoting the use of green energy and the digitalised supply sector with a robust, flexible and coherent energy system. Ensure efficient utilisation of energy infrastructure.

Priority for RES and curtailment 

Priority to renewable energy Electricity suppliers who produce electricity from renewable sources with a capacity of less than 400 kW are given priority to supply to the grid. (§27c Electricity Supply Act)

In case a reduction of electricity production is required, first priority is given to renewable energy suppliers (so as much as possible reducing the production from conventional energy sources). If that is not sufficient, the Danish grid operator (Energinet) can also order renewable energy suppliers to reduce their output to ensure the stability of the grid. (§27c (1) Electricity Supply Act)

Grid use/management on islands

The above-mentioned rules do not differ on islands.

Exceptions
A direct line is an electricity connection between an electricity producer and an electricity consumer. There’s agreement among the political majority to enable the construction of commercially owned direct lines for electricity consumers and producers of a 10 kV voltage level and above. The construction and operation must be within the applicable planning, environmental and technical requirements for constructing an electricity grid. The authorisation for constructing direct lines must be an exception to the general rule that electricity must be transported and distributed through the collective electricity grid.
If a prosumer does not have a connection to the existing grid, they are allowed to make their own energy line, but the production, distribution and consumption have to be on the same parcel instead of selling it to the grid [1, paragraph 5].

RES Integration on Islands:

Although all islands are grid-connected, there are no special provisions for isolated grids or microgrids on Danish islands. However, new regulations permit energy communities and self-consumption models, allowing prosumers to store and manage their own energy, particularly through net-metering.

Procedure 

Grid operators are required to inter alia maintain, rebuild and expand the supply network in the supply area as necessary, and provide the necessary transmission capacity and access for the transport of electricity in the electricity grid. (§20(1) Electricity Supply Act). If the Danish transmission grid operator (Energinet) finds that a private grid operator has failed to live up to its obligations, it may carry out the necessary works to increase the capacity as needed. Energinet may also forcibly enter the premises of the grid operator to carry out these works. (§20(3-5) Electricity Supply Act).

Tasks of the DSO/TSO

DSO must remodel and expand the grid as needed. If ordered by the ministry, TSO can carry out construction work on the electricity supply network.

Obligations and rights of plant operators

Live up to the standards in the Electricity Supply Act.

Obligations and rights of customers

Paying a fee per kWh for the maintenance of the infrastructure.

Role of the NRA

Developing a strong and intelligent way of solving current and future risks and developments.

Technology-Neutral RES Support:

In line with the 2024 revision of the Renewable Energy Act, Denmark’s focus on technology-neutral tenders continues. Specific support schemes like those for biomass have been reduced, and newer market-based approaches are favoured to encourage the competitive development of RES.

• DMoCEU
• DGO

Number of DSOs: 40 Number of legally unbundled DSOs: 10 The figure represents the number of DSOs that are not part of a company with power retailing activities. All DSOs are functionally unbundled. Source: 2020 DSO facts and figures Eurelectric; Distribution System Operator Observatory 2020

Smart meter penetration rate 

99.1% Source: 2020 DSO facts and figures Eurelectric

Policies 

Every house should have smart a meter so the consumption is visually accessible to the consumers to save energy through behaviour change. Currently, there is a discussion about collecting prosumers in a bundles of 1-1,2 MW to use them as buffers in future. 

Specific rules for islands, isolated grids, microgrids, local grids, etc.

There are no specific rules.

Total number of active electricity nationwide suppliers: 28 Switching rates for electricity household customers in 2018: 5.1% Source: Monitoring Report on the Performance of European Retail Markets in 2018. CEER Report

How does the tariff methodology account for the deployment of RES? 

It is influenced by the capacity of the grid. Tariff goes up if the development is too fast

How does the tariff methodology adapt to islands, microgrids, local grids, etc.? 

Same as on the mainland

Are any policies being produced to account for such developments? 

Development of energy community framework for self consumption of electricity (currently in development).

Are there existing caps for RES installed capacity in the network?

What are the curtailment rules for RES generation? 
Live up to electricity supply act standards (Do not differ from other sources)

Who is responsible for voltage balancing, frequency reserve, unit dispatching, electrical system management?
Provider of electricity responsible for it and the Ministry of Environment, Energy and Supply has an overall responsibility for the security of electricity supply. Energinet is appointed by the ministry to maintain the level of security supply and monitor its development

Who has access to metering data? 
DSOs are supplying the data to TSO if needed. Consumers have access to their own data through smart meters. 
 

The relevant legislation in Denmark in the energy sector is: 

• Danish Electricity Supply Act (Elforsyningsloven)
• Act on the Danish Supply Authority
• Danish Electricity Supply Act 

Danish Electricity Supply Act (Elforsyningsloven): Updated in 2024

The 2024 version focuses on reinforcing electricity supply security, including producer responsibilities for contributing to grid expansion. This update includes stricter guidelines on how grid operators manage capacities and new policies for monitoring electricity supply. These regulations are relevant for maintaining the grid’s integrity while integrating renewable energy sources.

Law on the Promotion of Renewables: Revision as of June 2024 

The law promotes technology-neutral support for renewable energy, reducing specific subsidies like those for biomass. The framework aims for more competitive, market-based renewable energy production, encouraging multi-technology tenders and phasing out technology-specific support.

Regulations for Grid Connection: Updated in 2023 

The regulations outline the technical requirements for connecting to the grid. This includes new tariffs introduced for producers contributing to grid expansion, reflecting the growing demand for renewable energy. The regulations apply equally to all energy production plants, including renewables.

Amendments to Electricity, Natural Gas, Heat Supply, Renewable Energy Promotion, and Electricity Tax Acts:

The latest amendments in 2023 remain key for Denmark’s push to align its laws with European energy regulations, improve cross-border cooperation in energy markets, and reinforce supply security measures.

Climate Agreement - Denmark Can Do More II:

The 2022 Climate Agreement continues to guide Denmark’s energy strategy, aiming to multiply offshore wind and solar power production. It remains a pivotal part of Denmark’s long-term energy vision through 2030, with ambitions to achieve 100% renewable energy by 2028.

Denmark has for many years supported electricity production from renewable energy sources through various support schemes. In recent years, a shift has been made from technology specific support to a higher degree of technology neutrality and a more marked based approach through e.g., multi-technology tenders. Support for certain technologies has also been phased out recently. This includes biomass, where a premium tariff scheme was phased out in 2019 (but remains for depreciated installations) and biogas, where a scheme including direct grants for end-users was phased out in 2020. Concerning biogas, it was however later decided to introduce a new subsidy tender for biogas and other green gasses in the period 2024-2030. This has not yet been adopted (NECP Denmark, 2019; Climate Agreement 2020).
In the 2018 Energy Agreement the Danish Parliament agreed to aim for a renewable share of total energy consumption of approximately 55% in 2030. This is expected to result in a renewable share in electricity above 100% of consumption by 2030 (NECP Denmark, 2019).

• Loan (loan guarantees for local projects) - guarantees for loans for local owner associations and initiative groups wishing to establish certain RES installations
• Premium tariff (test wind turbines and depreciated biomass installations) – support through a premium tariff for test wind turbines within and outside national test centres and for depreciated biomass installations. A premium tariff scheme for biomass in general was phased out in 2019.
• Tenders (offshore wind farms) - site- and size-specific tenders for offshore wind farms decided in broad political agreements.
• Tenders (technology neutral) – tenders covering offshore wind established following an unsolicited application procedure, onshore wind, solar PV, wave power and hydroelectric power.
• Net-Metering – exemption from certain public tariffs and electricity tax on the electricity produced and consumed within one hour.

DEA

In Denmark, heat production from renewable energy sources is generally supported by the absence of energy tax and CO2 tax which is levied on fossil fuels.
Further, several subsidy schemes support the deployment of heat pumps both for district heating production and for individual heating. Besides the three schemes covered below that directly support deployment of heat pumps, the so-called scrapping scheme and decoupling scheme, that support scrapping of oil- and gas-burners and decoupling from the gas grid respectively, also promote heat pumps and other renewable technologies by subsidising termination of the use of fossil alternatives.
Support for other specific technologies until recently included a scheme with direct grants for end-users of biogas including for heat production. This was phased out in 2020, but it was later decided to introduce a new subsidy tender for biogas and other green gasses in the period 2024-2030. This has not yet been adopted (NECP Denmark, 2019; Climate Agreement 2020).
Denmark expects the renewables share in the heating and cooling sector to increase from 53.5 % in 2020 to 59.9 % in 2030. This share is expected to be achieved mainly through the use of biomass and heat pumps (NECP Denmark, 2019).

• Subsidy (heat pumps) – three different schemes support the deployment of heat pumps both for district heating production and for individual heating
• Tax regulation mechanism (absence of energy tax and CO2 tax) – The energy tax does not cover biomass for heat production and the CO2 tax only applies to fossil fuels

• DEA
• DTA

In Denmark, the support schemes for RES-T focuses on reducing taxes for zero and low emissions transport as well as mandating that biofuel is mixed in with conventional fuels.
Denmark has set a general goal of a reduction of greenhouse gas emissions of 70% by 2030. For the RES-T sector, Denmark expects to phase out new purchases of fossil fuel-based cars by 2030. It is expected that by 2030, 19% of the energy consumption in the transport sector will be from renewable sources. (NECP Denmark, 2019)

• Biofuel quota – For petrol and diesel fuels, at least 7.6% of the volume must be biofuels and the total greenhouse gas output for fuels must be reduced by 6% (compared to 2010 levels).
• Electricity tax reduction for charging EVs – The electricity tax is reduced for charging EVs at corporate premises.
• Reformed vehicle registration tax – The registration tax for new vehicles is reduced, but a second charge is applied to petrol or diesel-driven vehicles and to plug-in hybrid vehicles at a reduced rate. Until 2030, the tax reduction is gradually tapered off.

• DTA
• DEA
• DRA