Denmark - Country Commercial Guide
Renewable Energy Products
Last published date: 2022-12-02


Denmark has a long tradition of developing and using renewable energy.  Electricity derived from renewable energy has reached 67 percent of the electricity supply (wind energy contributes 46.8 percent while biomass contributes 11.2 percent). Energy savings are being pursued for environmental as well as commercial purposes, as they contribute to growth and business development while increasing security of energy supply.  The Danish Parliament passed the Climate Act in 2020, which set a target to reduce Denmark’s greenhouse gas emissions by 70 percent in 2030 (from a 1990 baseline) and climate neutrality by 2050.  The reduction targets are legally binding.  

Denmark has sought to increase its energy self-sufficiency since the global energy crisis in 1973.  Initially the focus was on the development of oil and natural gas resources in the North Sea.  The first subsidies for the construction and operation of wind turbines and biomass plants were introduced in the 1970s, all with the purpose of increasing energy self-sufficiency and increasing production of renewable energy.  From 1997 to 2013, Denmark was a net exporter of energy.  The Danish Ministry of Climate, Energy and Utilities expects Denmark to remain a gas exporter through 2050, when a moratorium on oil and gas exploitation will result in production ceasing.  Denmark is currently a net importer of gas due to renovations of the main Tyra field in the North Sea, expected to be completed by winter 2023/2024. 

Best Prospects 

Concerns over global warming and energy security have placed renewable energy and CO2 emissions reduction high on the Danish political agenda.  Denmark maintains that energy technologies should be promoted through a combination of market mechanisms and political regulation.  The Danish government wishes to secure a future energy supply that is safe, reliable, environmentally friendly, and supports growth and competitiveness.   

Denmark has excellent wind resources, thanks to its flat terrain and proximity to the sea.  Climate and hydrology allow high yields of biomass from agriculture even though land itself is a scarce resource due to the country’s small area and relatively high population density.  The long Danish coastline could allow wave energy to become important in the future.  Additionally, use of photovoltaics and solar heating is increasing, though the cost effectiveness of these methods makes them not as attractive as they may be in more southern, sunny countries. 

Denmark’s power system is presently characterized by combined heat and power (CHP) plants, that deliver heat to district heating systems, and a high proportion of the country’s electricity.  In Denmark, 66 percent of households rely on CHP plants for heating through the district heating system.  The CHP plants are fueled by a combination of coal, natural gas, biomass, and municipal waste.  Many plants are ceasing the use of coal, utilizing biomass (wood pellets, wood chips, or straw) instead.  Fuel for road transport is dominated by gasoline and diesel.   

Denmark released its Green Roadmap in 2021 with 24 initiatives for achieving its 2030 climate goals.  As part of this roadmap, Denmark has released a CO2 capture strategy and plans to present policies during 2022 that address aviation and road transportation.   

According to Risø-DTU (Danish Technical University), the Danish National Laboratory for Sustainable Energy, the most important measures for energy efficiency and CO2 reduction are: 

  • Energy savings: Sustained annual energy consumption reductions (1–3 percent).   

  • More efficient conventional vehicles and plug-in hybrid vehicles:  Curbing growth in road vehicle energy consumption is crucial to achieving CO2 emission reduction targets, as the transport sector is currently more than 90 percent reliant on fossil fuels.  Using electricity from renewable sources as the fuel for plug-in hybrid electric vehicles also helps to better integrate renewable energy into the grid.  Plug-in hybrid vehicles will help electric companies handle the variability and limited predictability of wind power in a cost-effective way. 

  • Wind power: Denmark has significant experience with wind power and has major wind resource endowments.  Between 2010 and 2021, wind energy capacity increased by over 60 percent, largely due to the expansion of offshore wind infrastructure.  Most future expansion is also likely to be offshore.  The power transmission grid must be reinforced to meet the needs of future offshore wind power plants.  Planning permission for new overhead lines can be hard to obtain due to opposition from local communities.  Underground and undersea cabling are alternatives. 

  • Carbon Capture Utilization and Storage (CCUS):  In 2021, the Danish government agreed to allocate USD 2.2 billion (DKK 16 billion) for development of carbon capture, utilization, and storage (CCUS) projects.  Denmark aims to capture and store carbon from hard to abate energy and industrial sectors.  There are several projects underway to test injecting captured carbon dioxide (CO2) into depleted offshore oil and gas fields in the North Sea. 

  • Energy Islands: In 2021, the Danish Government decided to plan for two “energy islands.”  The energy islands mark the beginning of a new era for the generation of energy from offshore wind, aimed at creating a green energy supply for Danish and foreign electricity grids.  Operating as green power plants at sea, the islands are expected to play a major role in the phasing-out of fossil fuel energy sources in Denmark and Europe.  The offshore wind turbines around the islands will be able to supply green electricity with a capacity to power at least five million households.  The plan envisions the establishment of an artificial island in the North Sea that will serve as a hub for offshore wind farms supplying 3 GW of energy, with a long-term expansion potential of 10 GW as well as an energy island in the Baltic Sea near Bornholm, where electrotechnical facilities on the island will serve as a hub for offshore wind farms off the coast supplying 2 GW of energy. 

  • Biomass: Biomass is used to heat buildings, to supply process heat for industry, and in CHP plants.  Danish industry has a body of knowledge about the use of straw and wood pellets for CHP, making this technology attractive.  The development of second-generation biofuel technologies could make biofuels a sensible choice for transport in the future. 

  • Flexibility: Handling large amounts of wind power, which fluctuates by nature, requires flexibility in both power consumption and other power generating technologies.  There are various means to manage power systems and ensure flexibility, including heat pumps, flexible pricing mechanisms and appliances, and the increasing use of electricity for transport. 

  • Infrastructure planning: Decisions such as where to build new transmission lines, where to upgrade existing lines, whether to use overhead or underground cables, and where to locate new wind farms can also help to support greater use of intermittent power sources such as wind.   

  • Energy markets: Energy markets are important for optimization of fuel and infrastructure use and to drive new investment to internalize externality costs connected with energy conversion.  To take advantage of potential demand flexibility, future markets will need to be able to distribute price signals to end-users. 

Best Prospects for U.S. companies 

The Danish private sector and consumers are consistently on the lookout for new innovative products that can reduce costs and carbon emissions.   


Danish Energy Agency (Energistyrelsen):  

Risø-DTU National Laboratory for Sustainable Energy - 

Green Power Denmark - 

Offshore -