European Energy has launched a white paper revealing a range of challenges for renewable energy in Denmark.
Green electricity is subject to higher taxes in Denmark than fossil fuels such as gasoline, diesel, and natural gas. This creates a bottleneck for the green transition, the white paper said.
European Energy highlighted soaring grid connection costs as a key challenge. It said the introduction of producer fees on January 1, 2023, had made grid connections significantly more expensive.
For some projects, grid connection costs account for up to 60% of the total establishment costs of a renewable energy park, it said.
Another barrier is negative electricity prices and low electrification rates. In 2024, Denmark experienced a record number of hours with negative electricity prices. This is partly due to higher taxes on green electricity compared to fossil fuels.
As a result, electrification in Denmark remains low, far from the goal of self-sufficiency in green energy, the white paper said.
Uncompetitive energy prices were also cited as a challenge for the renewables industry.
According to the Draghi Report, electricity prices in Europe are 2.5 times higher than in the US and China. While energy policy in these countries is closely linked to industrial policy, Danish energy policy appears to be more focused on tax policy.
Chief executive officer of European Energy Knud Erik Andersen said: “Denmark should aim to run on 100% green electricity as soon as possible, but currently only 15-20% of our society is electrified.
“We must also strive for a leading position-not just in Europe, but globally-in developing and deploying renewable energy projects.
“The most important action right now is to address the consumer side by reducing electricity taxes.
“Today, it doesn’t make sense for ordinary Danes to switch from gas boilers to heat pumps. It’s baffling that we are effectively hindering the green transition of our society in this way.”
The updated white paper presents 10 recommendations to restart the development of onshore wind and solar energy in Denmark.
These include proposals for reforms aimed at reducing costs and promoting electrification.