Electricity prices - Denmark DK2

Denmark’s Electricity Market

Denmark’s Electricity Generation Mix

Denmark’s power system is dominated by renewables. In 2023–24 wind power supplied well over half of Denmark’s electricity – by far the highest share of any country. Solar PV generation has grown rapidly (reaching roughly 10–11% of output in 2024), and bioenergy (biomass and waste) contributes another ~17–19%. Fossil fuels now play only a minor role: coal and gas together are below 10% of generation (≈7% coal, 3% gas in 2024). As a result, Denmark’s “clean” share (wind+solar+bio) exceeded 80% in recent years. Denmark is also a net importer of electricity (on the order of 8–10% of consumption), primarily from Sweden (hydro/nuclear) and Norway (hydro), and exports some power to Germany.

Recent trends reinforce these shares: generation from wind, solar and biomass has been rising while coal and gas output have declined. For example, 2023 saw a historic jump in solar, to about 10% of output (up ~4 percentage points from 2022). Denmark continues to invest heavily in offshore and onshore wind (with targets for multi-gigawatts of new wind by 2030), and solar capacity is also expanding. As a result, wind and solar together now account for a clear majority of Danish generation.

End-User Price Structure

Retail electricity bills in Denmark comprise several components:

• Wholesale energy cost (“spot price”): This is the cost of electricity itself, set by the Nord Pool wholesale market. In 2023, about 48% of a typical household bill was the energy component. (This includes the Nord Pool spot price plus any small supplier margin.) Commercial/industrial customers similarly pay the prevailing market price, often with lower margins.

• Grid (network) fees: About 11% of a household’s bill covers transmission and distribution charges. This includes the national TSO tariff (Energinet) and the local DSO tariffs (including a small fixed subscription fee). These regulated fees pay for the physical grid. (Larger businesses may pay different network tariffs, and some large users are directly connected to the transmission grid and pay measured power charges.)

• Taxes and surcharges (≈41%): A large share of the bill is taxes and levies. For households this includes the electricity consumption tax (elafgift) and value-added tax (25%). In 2025 the electricity tax is about 0.72 DKK/kWh (72 øre/kWh) before VAT (roughly €0.10/kWh). (Note: this tax was temporarily reduced to the EU minimum rate in early 2023, but reinstated to the full rate from July 2023.) In addition, all charges (energy, network, etc.) carry 25% VAT. (Other fees such as the former PSO levy for renewables have been phased out – renewable support is now funded through general taxation.)

• Other levies: Any remaining costs (e.g. special municipal fees) are minor. Industrial and commercial users often benefit from tax reimbursements: most industry customers (especially non-ETS) receive a refund of nearly all the energy tax on process use under Danish tax rules. In practice this means large businesses pay mostly the wholesale+network costs plus only VAT, whereas households carry the full tax burden.

The table below summarizes the approximate breakdown for a typical household (2023 data):

(Numbers vary by actual consumption and area. Businesses typically see a much lower tax/VAT share because of tax exemptions and refunds, so their effective price is closer to the energy+grid costs.)

Dynamic (Hourly) Tariffs and Regulation

Dynamic tariffs (also called time-variable or spot-price contracts) are electricity plans where the per-kWh rate changes with the actual wholesale price (usually on an hourly basis). In practice, the kWh price for each hour is tied to the Nord Pool day-ahead market price for the relevant price zone (DK1 or DK2). Consumers see a different rate each hour (often posted a day ahead), and can save money by shifting consumption into low-price hours (e.g. windy or sunny periods). A typical dynamic tariff adds a small margin or fixed fee to the raw spot price, plus the usual network fees and taxes.

In Denmark, essentially all customers have smart meters (about 99% coverage), so utilities can offer true hourly settlement. Both residential and commercial consumers can opt into dynamic contracts if they wish. For example, with such a contract a household’s hourly kWh price might be €0.20 at 2am (when wholesale is low) but €0.50 at 7pm (peak).

These tariffs are legal and encouraged: under EU law (Electricity Directive 2019/944), suppliers with over 200,000 customers must offer smart-meter households a dynamic (time-of-use or real-time) tariff option. Denmark has transposed this requirement into national law and regulators (the Danish Energy Agency and Utility Regulator) enforce it. In fact, Nordic markets have long been “spot-price driven” – many Danish retailers already sell electricity at or near Nord Pool prices. There are no extra legal barriers: dynamic tariffs are standard market products (often simply called “variable” or “time-of-use” contracts) and must be clearly described in supplier offers. Customers can compare these offers on public tools (e.g. Energinet’s elpris.dk) and switch as desired.

Providers Offering Dynamic Tariffs

Major Danish electricity suppliers now offer spot/variablerate plans. Notable examples include:

• Norlys Group (Denmark’s largest retail group, formed from Norlys/SEAS-NVE/Energi Fyn/NRGi/Eniig etc.). Norlys markets a residential “FlexEl” contract that passes through the hourly Nord Pool price plus a small fee. (Its business customers have analogous offerings.)

• Andel Energi (formerly SEAS-NVE) – offers the “TimeEnergi” plan for households and “TimeEnergi Erhverv” for businesses. Under these contracts the kWh price shifts hour by hour with the spot market. (Andel customers can view live hourly prices by region on the supplier’s website.)

• NRGi – offers “NRGi Time”, a purely variable plan where customers pay the market price each hour (with a 5 øre/kWh trading fee). NRGi reports that about 100% of consumption is settled at spot rates, plus a monthly fee (~29 DKK). (NRGi’s rates for East/West Denmark are updated daily on its site.)

• SEF Energi – the southern Funen utility offers “TimeEl” for households (and similarly MereEndEl for those wanting a green premium). In the TimeEl plan the kWh price varies each hour with the market. SEF also has fixed-price offers for comparison.

• Natur-Energi (Energi Danmark) – a green supplier, which has sold a “spotpris” contract (hourly settlement) often called Markedspris at Nord Pool.

• Go Energi and others – Several local or eco-focused suppliers (e.g. Natur-Energi’s parent OK, co-op GoEnergi, etc.) similarly offer contracts tied to the hourly spot price.

Each of the above products is available in the residential market; many have equivalent versions for small businesses. (Larger industrial customers typically negotiate bespoke contracts or simply receive the hourly system price through market exposure.) Overall, by 2025 most Danish retailers – large and small – have a dynamic (“time variable”) option to meet the EU requirement, alongside their fixed-price offers.

Summary: Denmark’s electricity mix is overwhelmingly green (wind-led) with rising solar/biomass shares. Retail prices remain relatively high due to taxes, but are structured as wholesale+network+tax components (roughly 50/10/40% for households). Time-varying tariffs tied to Nord Pool are now commonplace for both homes and businesses, as mandated by EU law, and are offered by all major Danish suppliers.

Peak and Off-Peak Hours

Denmark DK2 2024 – Average Hourly Wholesale Electricity Price (Nord Pool)