Denmark is at the forefront of the energy transition. In 2023, the country advanced 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 government 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 result in 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 the development of major energy parks as part of the climate agreement to increase green energy from solar and wind on land (December 2023). Moreover, offshore wind (OSW) capacity, which currently stands at 2.7 GW, is expected to increase four times by 2030 to around 12 GW and 14 times by 2050 (approximately 37 GW).
To accelerate the energy transition, the Danish government instituted the Nationale Energikrisestab (NEKST), the national energy crisis team tasked with three work tracks – phase out gas in Danish homes, increase sun and wind energy on land, and accelerate the expansion of the electricity grid. The NEKST working group has already submitted its recommendations for the first two tracks, while the final report on the last track is expected by 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 the co-location of new RES capacity with load. The aim is to reduce the need for expansion as the accelerated pace will not keep up with the expected growth in demand and supply, and excessive expansion may not be economically viable.
Another key focus area for the energy transition is leveraging synergies across sectors. The 2022 climate agreement on green electricity and heat set a deadline for achieving 100 per cent green gas (upgraded biogas and e-methane) supply by 2030. It is estimated that biogas production will exceed gas consumption by 2030 in Denmark, allowing surplus biogas and e-methane to be exported. To achieve a green economy, the country 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 significant strides towards the energy transition, its transmission infrastructure urgently needs upgrades and augmentation. The significant RES expansion means that energy quantities will sometimes 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, the Danish transmission system operator (TSO) Energinet published its Langsigtet Udviklingsplan 2024 (LUP24) or Long-term Development Plan 2024, the second of its kind. LUP24, which will be updated every two years, estimates that Energinet must build approximately 2,700 km of additional electricity grid by 2030, and an additional 3,000-4,000 km by 2050. Meanwhile, it must remove 1,000-2,000 km of overhead lines (OHLs). By 2030, the transmission network is expected to 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 DKK 36 billion over the next four years up to 2027, which translates to DKK 9 billion annually. Meanwhile, Energinet invested DKK 5.3 billion as of 2023.
Future network plans
LUP24 lays special emphasis on 400 kV connections, while the undergrounding of 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 replacement due to age and wear. However, the growth in demand will also require new 400 kV connections, which will primarily be OHLs. LUP24 estimates the need for 600 km of new 400 kV connections and 425 km of reinvestments, while 250 km is 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 notable concentration is expected in areas around Idomlund and Stovstrup. The timing of various grid expansions depends on the pace of OSW expansion as well as PtX and hydrogen infrastructure development.
In North Jutland, the transmission network between Central Jutland and Vendsyssel needs to be expanded to accommodate the development of significant 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. Grid expansion in South Vester Hassing is expected in the short term, while expansion 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 surplus renewable energy 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 surplus renewable energy to Copenhagen, 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 to 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 offers an overplanting option allowing for 10 GW or more of new capacity to be added, with power designated for Danish consumption, export 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.
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 significant amounts of OSW into the energy system, the Danish Parliament approved plans in 2020 to develop 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). 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 the “Program Energiø Borholm” plan, which outlines the framework for a project consisting of an OWF south of Bornholm with a capacity of 3.8 GW (including 800 MW for 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 for the island is also advancing. In June 2023, Germany and Denmark signed a legally binding cooperation agreement to connect BEI to the mainland. According to the agreement, mainland Denmark will receive 1.2 GW, and Germany will 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 expected to be completed 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 DKK 50 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, which will connect the Danish North Sea Energy Island with Belgium’s Princess Elisabeth Island, an artificial island being built by Elia in the North Sea. LUP24 expects the commissioning year for this project to be 2034.
Energinet is also part of the North Sea Wind Power Hub, along with its consortium partners German-Dutch TSO TenneT and Dutch gas network operator Gasunie. The consortium plans to collaborate on building an energy island 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 initially proposed 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 intergovernmental decisions need to be made regarding the regulatory regime for interconnectors, funding and cost recovery for cross-border cooperative projects, and the phasing out of offshore grid development.
Challenges and the way forward
A key challenge Energinet faces is that the power grid in many parts of Denmark has already reached its upper limit. Until 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 working to accelerate grid expansion through various methods, including the NEKST working group’s report recommendations expected later this year.
Another major challenge is the rising material costs 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 DKK 10.5 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 DKK 6 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 by procuring earlier, building inventory for critical components, sourcing more standard items and expanding procurement to global suppliers beyond Europe.
Energinet is making significant efforts to accelerate grid expansion to meet the demand from new RES capacity and the rapid increase in electricity consumption. When it releases the next version of the LUP in 2026, greater market clarity and grid development are expected. The years leading up to 2030 will be crucial in shaping the path towards long-term energy transition.
