Denmark has been at the forefront of energy transition for quite some time. In 2023, the country moved forward its carbon neutrality target by five years to 2045 and set a new target of a 110 per cent reduction in greenhouse gas emissions by 2050 compared to 1990 levels. The Danish Parliament has also decided to phase out oil and gas extraction in the North Sea by 2050.
The Danish green transition involves significant electrification across sectors. Denmark’s electricity consumption is expected to double by 2030 and increase fivefold by 2050. This will be met by massive growth in both onshore and offshore renewable energy sources (RES). Denmark aims for a fourfold increase in its annual onshore RES production by 2030 from 12 TWh to 50 TWh. This will be achieved through major energy parks on land, to be developed under the climate agreement on more green energy from solar and wind on land (December 2023). Moreover, the offshore wind (OSW) capacity, which currently stands at 2.7 GW, is expected to increase four times by 2030 (around 12 GW) and 14 times by 2050 (about 37 GW).
To accelerate the energy transition, the government instituted the Nationale Energikrisestab (NEKST) or the national energy crisis team tasked with three work tracks – goodbye to gas in Danish homes, more sun and wind on land, and faster expansion of the electricity grid. While the NEKST working groups on the first two tracks have delivered their recommendations, the final report on the last track is expected at the end of 2024. The key focus areas of this group include streamlining and shortening processes for grid expansion, strengthening collaboration among stakeholders and recommending network offloading actions to promote alternatives to grid expansion such as colocation of new RES capacity with load. The aim is to reduce the need for expansion as the accelerated pace will not be able to match expected demand and supply growth and excessive expansion can be economically ineffective.
Another key focus area for the energy transition is leveraging synergies across sectors. The climate agreement on green electricity and heat for 2022 has set a 2030 deadline for achieving 100 per cent green gas (upgraded biogas and e-methane) supply. It is estimated that biogas production will exceed Danish gas consumption by 2030, allowing surplus biogas and e-methane to be exported. To achieve a green economy, Denmark plans direct and indirect electrification via Power-to-X (PtX), which produces fuels that can replace fossil products across sectors. PtX can contribute to an integrated and flexible energy system and complement existing supply sectors such as electricity, gas and district heating. The demand for green power is also driven by the government’s efforts to promote green hydrogen to achieve 4-6 GW of electrolysis capacity by 2030.
As the country makes big strides towards energy transition, its transmission infrastructure urgently needs upgrades and augmentation. The significant RES expansion means that energy quantities will at times far exceed domestic consumption. This aligns with the political objective of making Denmark a net exporter of green energy, which requires a stronger grid and interconnection infrastructure. Part of this will be realised through hybrid projects and energy islands in the Baltic and North Seas.
To deliver the requisite electricity grid structure by 2050, in June 2024, Danish transmission system operator (TSO) Energinet published its Langsigtet Udviklingsplan 2024 (LUP24) or Long-term Development Plan 2024, the second of its kind. The LUP 2024, which will be updated every two years, estimates that Energinet must build approximately 2,700 km of additional electricity grid by 2030, and another 3,000-4,000 km by 2050. Meanwhile, it must take down 1,000-2,000 km of overhead lines (OHL). By 2030, the transmission network would grow to 8,745 km (from 6,045 km at present) and the number of substations to 257 (from 197). Energinet has planned significant investments of DKK36 billion over the next four years up to 2027, which translates to DKK9 billion annually. In comparison, Energinet invested DKK5.3 billion in 2023.
Future network plans
The LUP24 lays special emphasis on 400 kV connections while the process of undergrounding ageing 150 kV and 132 kV OHLs continues. In the short term, additional 400 kV circuits can be added by increasing the capacity of existing masts – moving from single to double systems when the current 400 kV connections need to be replaced due to age and wear. However, the growth in demand will also require new 400 kV connections, which will primarily be OHLs. The LUP24 estimates the need for 600 km of new 400 kV connections, 425 km of reinvestments and 250 km already in the establishment phase – all aggregating to 1,275 km.
Region-wise developments
In West Jutland, several 400 kV reinvestments have been proposed to match the accelerated pace of green energy growth in recent years. Along the West Coast, a significant OSW expansion is expected in the North Sea, along with new solar and wind facilities on land. Additionally, several new large electricity consumers are expected. While new capacity is expected to be distributed widely across the coast, a certain predominance is expected in areas around Idomlund and Stovstrup. The exact timing of various grid expansions depends on the pace of OSW expansion and PtX and hydrogen infrastructure development.
In North Jutland, the transmission network between Central Jutland and Vendsyssel needs to be expanded to accommodate the significant development of solar capacity. The need for 400 kV Ferslev–Trige and Ferslev–Tjele connections is maturing as Energinet prepares the business case for these projects prior to investment decisions. In addition, 400 kV connections to Hjørring and Klim Fjordholme have been proposed to support potential OSW and solar installations in these areas. The grid expansion in south Vester Hassing is expected in the short-term, while that in north Vester Hassing is expected in the longer term, provided OSW is established in the area.
In East Jutland, the upgradation of the 400/150 kV Kassø–Landerupgaard–Malling–Trige connection is necessary to accommodate new RES plants as well as the Kattegat II offshore wind farm (OWF), and enable the transmission of RES surplus across the country. Energinet expects government approval for the project later in 2024, aiming for it to be operational by 2029.
South Jutland and Fyn are witnessing a number of solar installations, leading to grid extensions. In Zealand and Lolland-Falster, Energinet has initiated the “Green electricity to Zealand, Lolland and Falster” project, which comprises 220 kV and 400 kV connections from Ringsbjerg/Ørslevvester (near Ringsted) to Lolland and Falster via Vordingborg. The project is necessary to accommodate the large RES plants that are under development in the region. Under the project, in North Zealand and Midtsjælland, a 400 kV connection is expected between Hovegård and Ørslevvester after 2030. The connection will help transport RES surplus to Copenhagen or to Sweden or Germany via international connections. In early 2024, Energinet received approval for a 400 kV extension between Bjæverskov, Ringsbjerg and Solhøj, reinforcing the same section.
Offshore wind
In April 2024, the Danish Energy Agency (DEA) released the country’s largest tender till date for OWFs located in the North Sea I, Kattegat and Kriegers Flak II areas, following the political agreement on tender frameworks in 2023. The tender offers a minimum of 6 GW of new capacity spread over six sites, with a minimum of 3 GW across three wind farms in the North Sea I, 1 GW in Kattegat, 0.8-1.2 GW in Hesselø and 1 GW in Kriegers Flak II (Baltic Sea). The tender gives an overplanting option allowing for 10 GW or more of new capacity to be added, with power designated for Danish consumption, exports and green hydrogen production. Combined with the upcoming Bornholm tender (3.8 GW), this could deliver up to 14 GW of OSW capacity by 2030.
The LUP24 has provisions for connections for the above OWFs by 2029. In addition, for the grid connection of the 1 GW Thor OWF in the North Sea, Energinet is building two new 220 kV substations in Volder Mark and Idomlund as well as a 30 km, 220 kV cable connection to connect the Idomlund substation to the existing 400 kV network. This is expected to be completed by 2028.
Energy islands and hybrid projects
To integrate huge amounts of OSW into the energy system, Denmark plans to develop the first-of-its-kind hybrid energy islands: the 3 GW Bornholm Energy Island (BEI) or Energiø Bornholm in the Baltic Sea by 2030 and an artificial island in the North Sea (3 GW Phase I by 2033 extended to up to 10 GW by 2040). These were approved by the Danish Parliament in the 2020s. Denmark has planned hybrid projects with the energy islands to evacuate OSW electricity to the mainland and enable power exchange with neighbouring countries.
In May 2024, the DEA published a plan called “Program Energiø Borholm”, which sets the framework for project which consists of an OWF south of Bornholm with 3.8 GW capacity (allowing for 800 MW of overplanting) and high voltage installations on Bornholm and Zealand. The DEA is currently preparing the upcoming OSW Bornholm tender for 2024. The proposed hybrid connection of the island is also advancing. In June 2023, Germany and Denmark signed a legally binding cooperation agreement focusing on connecting BEI to the mainland, with mainland Denmark receiving 1.2 GW and Germany to receive 2 GW of power transmitted via a 492-km-long, 525 kV high voltage direct current (HVDC) subsea cable to the German TSO 50Hertz Transmission’s grid in Lubmin county. A new substation will be built at Bornholm to connect the interconnector.
50Hertz already confirmed the cable contract for its portion (164 km) as part of a bulk cable contract signed with Danish NKT in September 2023. In December 2023, Energinet and 50Hertz commenced the tendering process for BEI by splitting it into multiple contracts to enable vendors interested in bidding on the HVDC stations and cables to bid on contracts within their core business, while other parts of the project will be tendered separately. The HDVC equipment will be tendered as one joint contract. The TSOs have designed the procurement of HVDC breakers – a future key technology for the energy island – as an option that can either be built as part of the initial construction or as a separate tender at a later phase. The transmission project is proposed to be delivered in Denmark by 2029.
The North Sea Energy Island, expected to be located around 100 km off the coast of Jutland in the North Sea, with grid connections on the west coast of Jutland and Belgium, was initially proposed as an artificial energy island. However, in June 2023, the Danish Ministry of Climate, Energy and Utilities postponed the tender for the artificial island through a public-private partnership after DEA estimates indicated that the state costs associated with the proposed development will exceed DKK50 billion, making it too expensive and risky. Energinet has been investigating whether the project should be established on a foundation made up of several large platforms instead of an artificial island. The Danish government is also negotiating with Belgium for co-financing the energy island. For transmission, Energinet and Belgian TSO Elia entered into a cooperation agreement in 2021 for the Triton link, planning to connect the Danish North Sea Energy Island with another artificial island being built by the Belgian TSO Elia, the Belgian Princess Elisabeth Island (PEI), in the North Sea. The LUP24’s expected year of commissioning is 2034.
Energinet is also part of the North Sea Wind Power Hub (NSWPH) along with its consortium partners German-Dutch TSO TenneT and Dutch gas network operator Gasunie. The consortium intends to build an energy island together on the Dogger Bank in the North Sea, expected to be operational by 2035. This hub, supported by the European Union’s (EU) Connecting Europe Facility, could eventually be connected to the UK, Belgium and Norway. Although first mooted in 2016 based on a hub and spoke principle, this project is still in the early stages of development. To realise all hybrid projects, several EU-level and inter-governmental decisions need to be taken with respect to the regulatory regime for interconnectors, funding and cost recovery for cross-border cooperative projects and the phasing-out of offshore grid build-out.
Challenges and the way forward
A key challenge Energinet is facing is that the power grid in many parts of Denmark has already reached its upper limit. Until the high voltage substations and connections are expanded, there is no room for more wind and solar power. Given that expanding the grid often takes longer than establishing new RES plants, the government is trying to accelerate grid expansion through various methods including the NEKST working group report recommendations expected later this year.
Another major challenge is the rising material prices and long delivery times caused by the dramatic increase in the global demand for cables, converters, transformers and other components. To secure market capacity, in May 2024, Energinet signed a DKK10.5 billion framework agreement with Siemens Energy for the supply of transformers and switchgear for high voltage substations in Jutland and Funen. The investment in the first four years of the agreement is estimated to be worth up to DKK6 million to accelerate the energy transition. The agreement focuses on the western part of Denmark, where approximately 50 new/reinforced 150 kV high voltage substations are planned to be built/expanded over the next eight years. Energinet is adjusting its procurement strategy to procure earlier, build inventory for most critical components, procure more standard items and procure globally beyond European suppliers.
Energinet is making serious efforts to accelerate grid expansion necessary to meet the demand from new RES capacity and rapidly increasing electricity consumption. When Energinet presents the next version of the LUP in 2026, greater market clarity and grid development is expected. The next few years up to 2030 will be crucial as they will define the pathway towards long-term energy transition.
