Renewable energy in Denmark

In the heating sector the country has long used and continues to develop district heating (DH) networks. Hot water or steam is produced centrally and then distributed through a network of insulated pipes to high population areas. Houses within a district heating area have heat exchangers installed instead of boilers for their heating and hot water requirements. The heat exchanger keeps the two water systems separate and means that heat can be adjusted as with a familiar domestic boiler. One simple but important innovation in the district heating network was the development of internally insulated pipes. The two pipes taking and receiving the return of water are placed inside a much larger pipe and insulating material is set so as to fill the figure eight shaped void between the two smaller and the large pipe. In 2013 district heating supplied over 60% of all households in Denmark with heating and hot water. The development of district heating technology has led Denmark to become a world leader in industrial pump and thermostat designs and its products are used in many industries worldwide.

Cogeneration is also widely used. This is a process that extracts the waste heat produced when generating electricity. Power stations designed to do this are known as Combined Heat and Power (CHP) stations. CHP stations in Denmark are often sized to provide the heat required for the local district heating system. Thus CHP stations produce both electricity for the grid and heat for district heating systems. Heat can be stored in large industrial hot water tanks for several days allowing electricity and heat supply to be provided time independently from each other. By 2013 the use of CHP stations had reduced the overall energy consumption in Denmark by 11%.

Danish electricity generation has become increasingly decentralised with a move away from production in the large central power stations to many smaller locally based and mostly CHP stations. Many of these smaller stations use locally sourced bio energy sources including straw and wood pellets.

Energy consumption and objectives

*Provisional data for 2021, 2022, some data for earlier years may also be provisional.

Renewable-energy consumption increased more than elevenfold from 22 petajoules (6.1 TWh) in 1980 to 257 PJ (71 TWh) in 2018. Whilst renewable-energy consumption was rising between 1990 and 2013, gross energy consumption fell by 7%. Most of the fall can be attributed to a great increase in combined power and heat generation (CHP) and the growth in wind power. This has increased energy conversion efficiency, reducing conversion losses by 28% or 7% relative to gross energy consumption. Put simply smaller and decentralised CHP plants use fuels far more efficiently than older centralised power plants, and wind power has no fossil fuel to waste. Thus the growth of these two sources (10% during the period) has displaced fossil fuels by more than a one-to-one ratio. The use of Biofuels in local CHP plants has further displaced fossil fuel consumption. The figures in the table above show that whilst the reduction in fossil fuel use has been most pronounced in coal use, there has also been a significant reduction in oil and natural gas usage since 2000. Oil has fared better than the other fuels because it still dominates usage in the transport sector and alternative fuels and transport solutions are not yet widely deployed. On 22 March 2012, the then–government of Denmark announced the Energy Agreement, which had the following goals:

Eliminating coal from power production by 2030;
having completely fossil-fuel-free electricity and heating production by 2035;
Providing 100% of Denmark's energy requirements from renewable sources by 2050.

In 2018, an energy agreement was signed by the then–government of Denmark with support from all the parties in the Danish parliament at the time. This agreement had the goal of providing 50% of Denmark's energy from renewable energy in 2030, fully covering the Danish people's electricity consumption.

In 2020, the (as of May 2020) current government of Denmark revealed a plan to build two energy islands, one on Bornholm and one on "an artificial island in the North Sea". When built both would have a capacity of at least 2 gigawatts; the North Sea island could eventually have a capacity of 10 gigawatt.

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Energy consumption by sector

All EU countries as well as Iceland and Norway submitted National Renewable Energy Action Plans (NREAPs) to outline the steps taken, and projected progress by each country between 2010 and 2020 to meet the Renewable Energy Directive. Each plan contains a detailed breakdown of each country's current renewable energy usage and plans for future developments. According to projections by the Danish submission in 2020 the gross final energy consumption in Denmark by sector breaks down as follows:

Almost half of energy consumption (46.6%) is used in the heating and cooling sector. The heating and cooling sector (also known as the thermal sector) includes domestic heating and air conditioning, industrial processes such as furnaces and any use of heat generally. The next largest share is the transport sector at 33.6%, followed by the electricity sector at 19.8%. Total annual energy consumption is projected to be 16.4 megatonnes of oil equivalent (191 TWh) by 2020. Denmark's binding 2020 target under the EU Renewable Energy Directive was a 30% share of renewable energy in gross final energy consumption, up from 17% in 2005. The share of renewable energy in Denmark more than doubled between 2005 and 2020 on the back of continued investment in wind power and bioenergy, reaching 31.7% in 2020 and thereby meeting the target, although large statistical transfers to Belgium, Ireland and the Netherlands in 2020 and 2021 temporarily reduced the renewable energy share recorded within Denmark. Renewable energy use is expected to be 39.8% in the heating and cooling sector, 51.9% in the electricity sector and 10.1% in the transport sector.

The energy measures above are gross final energy consumption. Another broader measure, primary energy consumption also includes energy used in the extraction of fuels (the energy sector) and energy lost in transformation (the transformation sector, i.e. converting heat to electricity in power plants or fuel energy to heat in heating plants) as well as gross final energy consumption for end users. In 2013 Denmark's total final energy consumption was 607 petajoules (169 TWh) whilst its primary energy consumption was 763 petajoules (212 TWh). Most of the approximately 25% difference is accounted for in losses in the transformation sector. These losses are likely to be most prevalent in thermal electricity sectors, thus the use of renewable electricity will reduce CO₂ emissions and fuels lost in the energy and transformation sectors as well as those in final consumption. Denmark is one of the world's most fuel efficient countries and the difference between the two measures is smaller than many other countries.

Electricity sector

Production by source

In 2017 wind was the major source of Denmark's net electricity generation, with 50.2 percent of the total yearly production. Biofuels (wood, straw and biogas) and the biodegradable part of waste provided the second-largest RE source at 18.5% of national generation. Solar power has grown significantly in recent years from a low base and provides a further 2.7% share. Hydroelectricity provided just 0.1% of net national generation, but the country maintains strong links to its neighboring countries large hydroelectric reserves. In 2017 fossil fuels and other non renewable sources accounted for just 28.6% of Denmark's total net generation and continues to decline against a total of 71.4% generated from renewable sources.

Growth from renewables

* excludes internal consumption by plant. ** figures in italics include photovoltaics. *** includes biofuels and biodegrable fraction of waste.

The table above shows the proportion of total Danish electricity generated by renewables rose between 2007 and 2017 from 28.1% to 71.4%. Total renewable electricity generation grew from 10.4 TWh in 2007 to 21.0 TWh by 2017. Between 2007 and 2014 most of the growth in RE electricity generation was the result of growing wind power generation (accounting for +56.9% of total generation growth), thermal generation from RE fuels added an additional 6.5%, Solar power has also made an impact as a new power source of an additional 597 GWh (5.7%) since 2012.

Fossil fuel reduction

Renewable energy generation in Denmark increased from 10.4 TWh to 17.6 TWh between 2007 and 2014. Fossil fuel generation fell from 26.3 TWh in 2007 to 12.4 TWh in 2014. Electricity generated from renewables first exceeded electricity from fossil fuels in 2012 and again in 2014.

Coal power, for example, has fallen from 90% of Danish electricity generation in 1990 to 42% in 2005 and 10% in 2020. Current (2023) plans anticipate a complete phase out of coal from the electricity and heat sectors by 2030.

Forecasts

The International Energy Agency's (IEA) Renewables 2022 forecast indicates that Denmark's renewable electricity capacity could nearly double, reaching 7 gigawatts (GW) by 2027, mainly driven by utility-scale solar photovoltaic (PV) projects financed via merchant revenues and bilateral contracts, alongside onshore wind expansion through repowering facilitated by auctions or corporate Power Purchase Agreements (PPAs). The report highlights the possibility of a 25% increase to nearly 10 GW with additional investment in subsidy-free PV projects and active market participation. Streamlining the permitting process and accelerating project commissioning are expected to contribute an extra 2 GW from solar and wind sources.

Heating and cooling sector

According to the energy Progress Reports submitted by EU member states (as well as Norway and Iceland) to the European Commission, by 2014 renewable energy provided 38.4% of the energy consumed in the heating sector. RE in the heating sector is overwhelmingly provided by biomass, including straw, wood, bio-oil and biodegradable waste producing about 35% of the sector's total consumption. The next largest share was provided by heat pumps at around 2.6% of the total. Solar thermal produced just under a half percentage share whilst geothermal heat produced a trace contribution. Renewable energy in the heating sector consists of sources consumed independently as well as their contribution to district heating networks. In 2008 about 40% of households gross final energy consumption for domestic heating came from district heating and 65% of consumption for the heating of commercial and public sector buildings. By 2013 the figure for households using district heating had grown to 60%.

In 2014 combined heat and power plants produced 68.7% of the heat for district heating networks in Denmark (as well as 61% of electricity power produced by thermal plants). In the same year biomass, waste and biogas provided the fuel for 18.3%, 20.8% and 0.9% of heat produced in CHP plants, in heat only plants the figures were 13.1%, 2% and 0.3% respectively whilst bio oil provided 0.6% of heat. Solar thermal, heat pumps and electric boilers also provided heat only plants with 0.6% and 0.4% of their production.

The 2009 NREAP report identified new and ongoing ways to promote the use of renewable energy in the heating and cooling sector and amongst these included the following. Tax exemption for RE heating and cooling producers. Building regulations and information initiatives were identified to increase energy efficiency across targeted at both the building sector and consumers both public and private. Regulations governing the energy efficient cooling of buildings under local authority control has been in place since 2008. A scrappage scheme for those using oil fired boilers to run central heating was planned for March 2010 to reduce CO₂ output and increase the take up of district heating and RE installations. Building regulations were in force to promote energy savings.

Transport sector

In 2014 renewable energy provided 5.67% of total final energy consumption in the transport sector. The largest source was from biodiesel followed some by bioethanol. Renewable electricity also made a contribution to the sector but this was smaller in 2014 than those from biofuels. In 2008 the government's “Green Transport” proposal announced that the upward trend in CO₂ emissions from transport must be halted. The political agreement “A Green Transport Policy” proposed measures to reduce emissions including the strengthening of public transport and encouraging greater utilisation and efficiency of existing vehicles. Preparations were made for a greener approach to vehicle taxation, including tax exemption for electric vehicles up to 2015. The Ministry for Transport also established the “Centre for Green Transport” to carry out research into energy efficient transport solutions. The EDTTP act was also cited as having established the Energy Technology Development and Demonstration Programme to research into solutions including biofuels and intelligent electricity.

According to the 2009 NREAP report biofuels were expected to provide the main source of RE in the transport sector rising from 1.3 petajoules (0.36 TWh) in 2010 to 10.9 petajoules (3.0 TWh) in 2020. Renewable electricity was expected to make up the minor share rising from 0.5 to 1.2 PJ (0.14 to 0.33 TWh) over the period for use in electric vehicles and trains.

Total electric vehicle sales in Denmark in 2015 were 4,762 units representing 2.29% of total car sales, with the TESLA model S having a surge of sales at 2,736 units in a rush to beat tax exemptions.

The Agreement on Green Road Transport, enacted on 4 December 2020, reflects Denmark's strategy to increase eco-friendly vehicle adoption, with a goal of 775,000 zero and low-emission vehicles by 2030. This policy is expected to reduce carbon emissions by 1 million tonnes by 2025 and 2.1 million tonnes by 2030, aiming to shift a third of the nation's vehicle fleet to greener options. In 2021, Denmark supported enhancements in transport infrastructure, specifically expanding electric vehicle (EV) charging and renewable fuel stations. The 2022 green tax reform is designed to align non-road transport energy taxes with CO₂ emissions, effective from 2025. Furthermore, the Coalition Agreement of 2022 reaffirms Denmark's commitment to green transport, focusing on revised electric vehicle rollout plans, promoting zero-emission vehicle adoption, establishing a fossil-free domestic flight route by 2025, aiming for complete domestic aviation decarbonization by 2030 with the support of a passenger tax, and accelerating the green transition in the heavy-duty transport, maritime transport, and aviation sectors.

Targets and progress

Targets

*Transport consumption as defined in Article 3 (4) (a) of Directive 2009/28/EC, renewable electricity in motor transport counts 2.5 x value.

The table above shows the expected trajectory for shares of renewable energy in the three sectors as well as the overall target trajectory. Overall between 2005 and 2020 renewable energy sources are expected to rise from 16.5% to 30% of total energy use.

Progress

The above table shows the actual overall and by sector renewable energy consumption achieved (PJ) in the years 2013-2016 as outlined in Denmark's NREAP progress report. Overall Denmark is running well ahead of its predicted trajectory, having achieved its 2020 total goal in 2015. For 2016, while heating and cooling and electricity sectors met the expected trajectory targets, the transport sector fell short of its target.