Foto: Thomas Rousing/Scanpix Denmark

How the energy crisis affects Denmark

Denmark and Europe are facing a serious energy crisis. Danes are encouraged to save energy.

Russia's decision not to reopen Nord Stream 1 has made the entire supply situation more uncertain. It will affect the heating, lighting and consumption of energy in Denmark. The public sector is now taking measures to save energy, but all Danes are encouraged to save energy.

What will happen to energy prices?

Energy prices in Europe are already high. Among other things, because the energy markets react to the current situation and expectations for the future. However, it is likely that the supply situation will further affect energy prices in Europe, both in the area of electricity and gas. At the same time, we can see that the price of oil is also high.

Read more about the high energy prices at SparEnergi.dk (information in Danish)

What can I do?

The Danish Energy Agency encourages everyone to save energy. In Denmark, we are well prepared, but it is crucial for the energy supply that we all save on energy before and during the coming heating season:

  • Turn down the heat
  • Limit the use of hot water
  • Save electricity - switch off unnecessary lighting and appliances when not in use
  • Use electricity when it is cheapest

Saving energy and using it at hours with low prices is good for both the climate and the wallet. You will find good advice on how to do it at SparEnergi.dk. At SparEnergi.dk you will also find more information on how you can apply for financial support for the electricity and heating bill as well as for energy renovation of your home.

How to safely heat the home

We need to save energy, but when the temperature drops, we also need to warm up our homes. If you use new heating sources, you can follow these advice from the National Emergency Management Agency and ensure safe heating of your home.

Read the good advice and see tips for different heat sources here (in Danish):

Sikker opvarmning af din bolig (brs.dk)

Save energy in the workplace

We spend around one third of of the day at work. By changing habits, you can lower consumption and contribute to your workplace becoming part of the solution to the difficult energy situation we are currently experiencing.

Remember to turn off lights, screens, computers and other electronics when you leave a room or go home.

Find more good advice at Sparenergi.dk (information in Danish):

Save oil

You can save petrol and diesel by driving a little differently. If you slow down a little, ensure correct air pressure in the tires and e.g. drive without air conditioning you can save fuel.

What are the state, municipalities and regions doing to save energy?

The government, the National Association of Municipalities (Kommunernes Landsforening) and Danish Regions (Danske regioner) all agree that energy must be saved in all public buildings.

On 8 September 2022, they therefore started work on measures to reduce the consumption of energy.

Energy measures in the public sector:

  • Lowering the temperature to 19 degrees for offices and the like
  • Switching off lighting on public buildings
  • To shorten the heating season by 14 days at each end
  • Employee information based on campaign material by The Danish Energy Agency with good saving advice for the workplace such as eg. turning off the lights and the screen when leaving meeting rooms.

What is the state doing to relieve Danish consumers during this period of significant price increases?

The government and parties in the parliament have continuously adopted a number of initiatives to help households and businesses through the crisis. The agreement on winter aid on 23 September 2022 at the latest. Below you can get an overview of some of the most central initiatives:

From 1 October 2022, the general electricity tax was reduced by 4 øre per kWh.

In the first half of 2023, the general electricity tax of 69.7 øre per KWh will be temporarily reduced to the EU's minimum rate of 0.8 øre per kWh.

In addition, the possibility of easing the electricity tax for heat pumps and returning some of the extraordinary earnings from higher electricity prices to the users is being investigated.

Temporary increase of the child and youth benefit by DKK 660 per child. The amount will be paid in January 2023.

In order to shield customers from even higher prices, the possibility of temporary and voluntary postponement is being introduced for the part of household and business expenses for electricity, gas and district heating that exceed the prices per 4th quarter 2021. Read more at Danish Energy Agency (in Danish): Nu træder indefrysningsordningen i kraft (ens.dk) 

For district heating, this applies to the part that exceeds the district heating price in January 2022 for the ten most expensive district heating companies.

This means that part of the electricity, gas and heating bill can be postponed and paid later.

Financial support for a number of disadvantaged citizens who are affected by rising energy prices. This applies, among other things, to pensioners who receive a pension check.

The maximum employment deduction for the income year 2022 and 2023 has been increased, so that the deduction can amount to a maximum of DKK 43,500 for the income year 2022 and DKK 44,300 for 2023. Read more here [link] (information in Danish).

DKK 6,000 targeted at economically disadvantaged households affected by high price increases was paid out in August as a heating check.

Better supply of wood pellets: A number of initiatives have been launched to support security of supply with regard to wood pellets, including crisis response cooperation, which must follow the supply situation closely

The scrapping scheme for wood pellet stoves: The scrapping scheme, where you can get subsidies for scrapping oil and gas stoves, will be adjusted from 1 December 2022, so that households with wood pellet stoves can also benefit from the funds. The scheme is increased by DKK 10 million in 2022 and provides support for switching to heat pumps on subscription.

Increased funding for establishing district heating: In order to advance and strengthen the roll-out of district heating, the pool for the roll-out of district heating is increased by DKK 150 million in 2022 and DKK 100 million in 2023.

Increase in subsidies for decoupling gas heating: An additional DKK 35 million is set aside with the agreement for subsidies for decoupling the gas network in 2023.

The government enters into a broad agreement on winter aid to mitigate the rising energy bills (information in Danish)

Bill on compensation for rising energy prices has now been adopted (bm.dk) (information In Danish)

Another billion kroner for increased heating aid (kefm.dk) (information in Danish)

Will we see power outages this winter?

Denmark’s electricity supply remains stable.

However, the European electricity market is facing challenges due to the war in Ukraine, the hot and dry summer and technical issues at foreign power plants.

We are facing a period of potentially huge pressure on our electricity supply, especially if we have a very cold and windless winter. This will increase the risk of power outages this and next winter.

However, at this time, the Danish Energy Agency (Energistyrelsen) does not expect that there will be any need to introduce controlled power outages in the coming winter.

If we reach a point where there is not enough power and all other tools have been tried, power may be turned off in specific areas, also called radials, for a maximum of two hours. These sorts of controlled local outages are known as “brownouts”, as opposed to blackouts, where the electricity system breaks down and a larger area goes black.

On the Danish Energy Agency website, you can read more about what the authorities are doing to avoid power outages. You will also find good advice as to how you can prepare yourself for such a situation.

FAQ about the energy situation (ens.dk in Danish)

Denmark's energy supply

GAS

Gas is no longer coming to Europe from Nord Stream 1. With Gazprom's closure of Nord Stream 1, gas deliveries from Russia via Germany have stopped indefinitely.

However, we are well prepared, and we still have a gas market with gas flowing across borders. Our security of supply is better than in several other countries. Barely 30 per cent of the domestic gas consumption today is covered by our biogas production, and some gas still comes in from the Syd Arne field. At the same time, over several years we have restructured our industry, heating and electricity production.

Non-protected gas customers are the larger companies with an annual gas consumption of at least 2.3 million Nm3 gas per year. In the event of a gas supply crisis, where there is a shortage of gas, these companies may be told to reduce gas consumption because gas must be prioritized.

In the event of an acute shortage of gas, the authorities can initiate various emergency measures to meet the EU's requirements to ensure the supply of households and other protected customers for a minimum of 30 days during a period of abnormally cold weather.

ELECTRICITY

Denmark's security of electricity supply is very high. On average, consumers have power in the socket 99.99% of the time on an annual basis. But we prepare for all scenarios.

The situation on the European electricity market is challenged by very high electricity prices due to the war in Ukraine, very hot and dry weather and low water levels in the Norwegian hydropower plants due to a lack of rainfall and technical challenges at foreign power plants. Although it also puts Denmark's security of supply under pressure, we do not expect, as it appears now, to get into a situation where controlled power outages will be necessary.

There is an increased risk of a lack of power, but the Danish Energy Agency does not immediately expect us to end up in a situation where it will be necessary to cut the power. Cutting off power to electricity customers is the absolute last tool used.

If, in the worst case scenario, Denmark finds itself in a situation with a lack of electricity, it may ultimately be necessary to shut off the electricity for shorter periods. In such a situation, there will be a controlled interruption, for example a few hours at a time in selected areas. Today, electricity consumers in Denmark experience an average of 20 minutes of interruption annually.

We encourage you to save on electricity, so that consumption in all Danish households and businesses can be covered with the supplies and stocks that are available

OIL

Denmark's situation is robust because we ourselves produce part of our oil and have access to imports from the world market. But we are of course following the situation closely and have plans ready should problems arise.

We do not immediately expect to have problems securing oil, petrol and diesel, as it can be bought on the world market. But this could mean that prices will go up.

Read more about the Danish oil emergency at the Energy Agency (information in Danish)

WOOD

The Danish energy producers purchase wood biomass from a wide range of countries all over the world and biomass can be relatively easily transported and stored. However, the price can be affected. There is greater uncertainty about the indirect effects, specifically the impact on the import of wood biomass from the Baltics, which constitutes almost a third of Denmark's total consumption of wood pellets and wood chips for electricity and district heating.

The wood biomass largely consists of residues from the wood industry, which previously received a lot of wood from Russia.

COAL

In Denmark, coal is predominantly imported from Russia, but there are a number of other possible suppliers globally. According to the energy statistics, coal consumption in 2020 was less than 10 per cent of gross energy consumption and all major consumers are phasing out coal. In 2020, coal accounted for 10.7 per cent of electricity production and 5.7 per cent of district heating production (fjernvarme).

In Denmark, coal is predominantly imported from Russia, but there are a number of other possible suppliers globally.

Russian coal constitutes a significant part of the world market, and therefore a boycott of Russian coal is expected to affect the market price.

Facts: EU crisis response

There are common rules for EU member states on how to deal with a gas crisis. Each country must prepare an emergency plan. There are three national crisis levels: Early Warning, Alert and Emergency:

  • Early Warning shall be declared when concrete, serious and reliable information is available that an incident may occur which is likely to result in a significantly lower gas supply and is likely to lead to the alarm or emergency level being triggered;
  • Alert is declared when gas supply is disrupted or an unusually high gas demand occurs, resulting in a significantly lowered gas supply, but the market is still able to deal with this disruption or demand without applying non-market-based measures
  • Emergency is declared when there is an unusually high demand for gas, a significant disruption to gas supply or other significant lowering of gas supply occurs and all relevant market-based measures have been implemented, but the gas supply is insufficient to meet the remaining gas demand, so introducing non-market-based measures will also be necessary.

As a new measure, an EU alert can be declared, which applies to all EU countries. If an EU alert is declared, all member states must reduce the demand for natural gas by at least 15% compared to previous years' consumption in order to ensure security of supply.