Denmark

Overall assessment

Updated December 2022

Denmark has transposed the EU legal framework through revising two legal acts and several Executive Orders. A new revision of the Energy Supply Act followed by three new Executive Orders will be presented in Parliament in early 2023. These Orders have covered some of the basic rights of RECs and CECs to participate across the energy market, particularly through the establishment of electricity sharing initiatives. However, they still largely overlook measures that need to be addressed in their enabling framework. The supplementary, pending revision primarily supports the monopoly rights of the common grid and at the same time restricts the rights of RECs and CECs. A grant scheme, run through the Danish Energy Agency, has just been approved in order to support community projects and information initiatives around energy. However, requirements for project developers to open up new wind projects to local citizen ownership were recently abolished. As such, there is no operable support scheme that takes RECs into account.

Overall, Denmark has a legacy framework that has allowed energy communities to engage in activities such as production, district heating, and even as a DSO through consumer ownership models. Regulations to enable energy sharing are just emerging and are far from perfect, while the government has taken little efforts to adapted its legal and regulatory framework to enable energy communities to further develop, and to access support schemes.

Detailed assessment

Assessment of obstacles and potential for development of ECs

Not addressed in the transposition.

Removal of unjustified regulatory & administrative barriers

Except for the electricity that is shared, REC and CEC must comply with all obligations the existing grid suppliers have, restricting the size and efficiency of renewable energy installations that can be established by RECs and CECs. The Ministry may also lay down rules exempting CEC from certain rules and obligations associated with electricity supply obligations and aggregation to its participants and capital owners, but they have not yet done so.

Furthermore, production and supply – not just distribution – are required to be unbundled from each other. This could prevent energy communities, at least in the electricity sector, from being able to fully exercise their rights.

DSO duties around cooperation with ECs and facilitation of energy sharing

In an Executive Order, it is stated that DSOs are obliged to cooperate with RECs and CECs in cases where their activity can reduce the load on the grid. In practice, it has been very difficult to make DSOs comply with this regulation, leading to several cases where RECs and CECs have given up due to administrative barriers.

Electricity sharing in REC and CEC takes place under an agreement on the supply of electricity with an electricity trading company, which handles offsetting and distribution based on their needs. This supply contract includes both the shared energy consumed and the additional electricity needed to cover the demand. Should the EC decides to fulfill itself the requirement for an agreement, it must comply with all the obligations for the performance of electricity trade business.

Fair, proportionate, and transparent registration & licensing procedures

Not addressed in the transposition.

Incentives connected to network tariffs based on a CBA

All applicable grid tariffs and taxes in connection with electricity sharing still apply to the REC and CEC, and there is no relevant grid tariff available.

If an energy community’s use of the grid increases savings for the collective electricity supply, tariffs can be drawn up based on the assessment of the benefits for the collective community’s use of the network. The method for preparing such tariffs is approved by the Danish Supply Authority.

Non-discriminatory treatment as market participant

Legislation simply states that CECs and RECs must be treated in a non-discriminatory and proportionate manner with regard to their activities, rights and obligations as electricity consumers, producers, electricity trading companies and aggregator companies.

Accessibility to low-income & vulnerable households

Legislation transposing energy communities into Danish law does not say anything explicitly about low-income and vulnerable households. Nevertheless, pre-existing legislation on Tenants Democracy has been used as a basis for community projects, particularly around district heating and solar thermal.

Tools to access finance

An Executive Order, passed in Autumn 2022, provides for the Danish Energy Agency to issue grants for projects related to securing renewable energy projects by local communities. It is possible to apply for funding to:

  • Disseminate information; and
  • Plan, establish and organize projects around production, supply, storage, flexibility and energy efficiency.

The objective of the grant programme is also to support projects that show how energy communities can be included in projects that can relieve the electricity grid, as well as community climate, environmental and social benefits, cooperation between energy communities and other actors, aggregation of energy communities

Tools to access information

Not addressed in the transposition.

Regulatory capacity building for public authorities

Not addressed in the transposition.

NECP reporting on enabling frameworks

Not addressed in the transposition. Member States are required via the Governance Regulation (2018/1999) to report on their enabling frameworks for RECs by 15 March 2023.

Support Scheme adapted for RECs

Not addressed in the transposition. In the meantime, the government abolished rules that require new onshore wind projects to open up ownership to local citizens.