Denmark - Country Commercial Guide
Renewable Energy Products
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  • Denmark has a long tradition of developing and using renewable energy.  Electricity derived from renewable energy has reached 67 percent of the electricity supply (of which 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.  Denmark set a target to reduce greenhouse gas emissions by 70 percent in 2030 (from a 1990 baseline) and climate neutrality by 2050 through the passage of the Climate Act by the Danish Parliament in 2020.  The reduction targets are legally binding. 

  • Denmark sought to increase its energy self-sufficiency following 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 in 2024.

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  • 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 energy resources, due 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 significant 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.  Denmark’s power plants are gradually 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 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). 


    • 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 contributes to better integrating renewable energy into the grid.  


    • Wind power: Denmark has significant experience with wind power and has major wind resource endowments.  Between 2010 and 2022, 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 and Storage (CCS): The Danish government has set a target of capturing 10 million tons of CO2 per year by 2030.  In August 2023, the Danish government announced a plan for CCS public tenders, with a total economic size of the tenders to be approximately DKK 26.8 billion (USD 4 billion), distributed over two bidding rounds, with approximately DKK 10.5 billion and approximately DKK 16.3 billion allocated over a 15-year period.  It is expected that the first of the two CCS tenders will be launched in June 2024, and the second a year later.  Denmark plans to build a network of pipelines and storage facilities to transport and store carbon dioxide and will invest in research and development of CCS technology to make it more affordable and efficient.


    • Energy Islands: In 2021, the Danish government announced a goal of developing two “energy islands.”  The energy islands are 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 would be able to supply green electricity with a capacity to power at least five million households.  The plan originally envisioned the establishment of an artificial island in the North Sea that would 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 would serve as a hub for offshore wind farms off the coast supplying 2 GW of energy.  On June 26, 2023, the Danish government publicized it isdelaying the decision to proceed with the Energy Island North Sea project to analyze whether a platform-based model instead of an artificial island would be a more economically and technically sustainable alternative.  


    • 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.  Biomass accounts for more than 12 percent of the country’s total energy consumption and the biomass market in Denmark is expected to continue to grow in the coming years.  The Danish government has set a target of increasing the share of biomass in the country’s energy mix to 20 percent by 2030.


    • Flexibility: Managing significant amounts of wind power, which fluctuates by nature, requires flexibility in both power consumption and other power generating technologies.  Denmark will continue to require various means to regulate 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 will be needed to support greater use of intermittent power sources such as wind. 


    • Energy markets: Energy markets are important for optimization of fuel and infrastructure use as well as to drive new investment to internalize 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.


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