This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

•    Denmark has a long tradition of using renewable energy and has sought to increase its energy self-sufficiency since the global energy crisis in 1973.  The first steps towards this new policy were investments in energy savings and the conversion of Danish power plants from oil to coal.  Later, focus was on the development of oil and natural gas resources in the North Sea.  The first subsidies for the construction and operation of wind turbines and biomass plants were introduced in 1981 and a string of energy agreements followed in the following decades, all with the purpose of increasing energy self-sufficiency and increasing production of renewable energy.  Finally, in 1998, Denmark reached its goal and became a net exporter of energy. However, it has gone back to being a net importer since 2013.

•    Denmark has the lowest energy intensity ratio in the EU. From 1990-2016, Denmark’s GDP grew 51%. In the same time, gross energy consumption showed a net decrease of 5%.  This led to a drop in energy intensity of 37%, or 1.4% per year.  Over the same period, CO2 emissions intensity showed a net decrease of 60%, due mostly to switching from coal to natural gas, increased use of renewable energy, and district heating.  In 2014 alone, CO2 emissions fell by 7.7%.  Denmark’s gross inland consumption of energy is less than 1.1%. 

•    Energy savings are being pursued for environmental as well as commercial purposes, as they contribute to growth and business development while increasing security of supply.  The Danish government has put forward an ambitious plan that 100% of Denmark's electricity and heat will come from renewable energy by 2035 and that, by 2050, the entire energy supply -- electricity, heat, industry and transportation -- will come from renewable energy sources.  39% of the current electricity generated in Denmark comes from renewable energy sources.    

Best Propsects/Services

•    Concerns over global warming and energy security have placed renewable energy and CO2 emissions reduction high on the Danish political agenda.  Denmark maintains that energy technologies should be promoted through a combination of market mechanisms and political regulation.  The government wishes to secure a future energy supply that is safe and reliable, environmentally friendly, and supports growth and competitiveness.  

•    Denmark has excellent wind resources, thanks to its flat terrain and proximity to the sea.  Climate and hydrology allow high yields of biomass from agriculture even though land itself is a scarce resource due to the country’s small size and relatively high population density.  The long Danish coastline could allow wave energy to become important in the future.  Photovoltaics and solar heating could also contribute in the future, though their cost effectiveness is not as attractive as in sunnier countries to the south.

•    Denmark’s power system is presently characterized by combined heat and power (CHP) plants, that deliver heat to district heating systems, and a high proportion of wind power.  The CHP plants are a combination of a few large plants fueled mainly by coal and natural gas, and a large number of distributed CHP plants using natural gas, biomass and municipal waste.  Fuel for road transport is dominated by gasoline and diesel.  

•    In early 2012 the Danish government presented its Energy Strategy 2050, which outlines how Denmark should become independent of coal, oil, and gas by 2050 and significantly reduce emissions of greenhouse gases. The strategy includes a strong expansion of renewable energy from wind, biomass, and biogas. If adopted, it will lift the share of renewables to one third of the total energy consumption over the next ten years. The long-term vision is a total phase-out of fossil fuels in Denmark.  

•    According to Risø-DTU, the National Laboratory for Sustainable Energy, the most important measures for achieving these results are:

•    Energy savings: Yearly energy consumption reductions on the order of 1–3%.  

•    More efficient conventional vehicles and plug-in hybrid vehicles: Curbing growth in the road vehicle energy consumption is crucial to achieving CO2 emission reduction targets, as the transport sector at present is nearly 100% reliant on fossil fuels.  Using renewably-generated electricity as the fuel for plug-in hybrid electric vehicles also helps to better integrate renewable energy into the grid.  Plug-in hybrid vehicles will also help electric companies handle the variability and limited predictability of wind power in a cost-effective way.

•    Wind power: Denmark already has significant experience with wind power, as well as good wind resources, so increasing the share of wind power is an obvious move.  Most future expansion is likely to be offshore.  The power transmission grid must be reinforced to meet the needs of future offshore wind power plants.  Planning permission for new overhead lines is hard to obtain, due to opposition from local communities.  Underground and undersea cabling are alternatives.

•    Biomass: Used to heat buildings, to supply process heat for industry, and in CHP plants.  Denmark already has a large body of knowledge about the use of straw and wood pellets for CHP, making this technology attractive.  The development of second-generation biofuel technologies could make biofuels a sensible choice for transport in the future.

•    Flexibility: Handling large amounts of wind power, which fluctuates by nature, requires flexibility in both power consumption and other generating technologies.  There are many ways to do this, including heat pumps, flexible pricing mechanisms and appliances, and the use of electricity for transport.

•    Infrastructure planning: Decisions such as where to build new transmission lines, where to upgrade existing lines, whether to use overhead or underground cables, and where to locate new wind farms can also help to support greater use of intermittent power sources such as wind.  

•    Energy markets: Important in optimizing the use of fuels and infrastructure, and to drive new investment to internalize costs connected with energy conversion and use that are currently treated as externalities.  To take advantage of potential demand flexibility, future markets will need to be able to distribute price signals to end-users.

Best Prospects for U.S. companies

•    Denmark is very advanced when it comes to utilizing energy saving products, but companies and private consumers are always on the lookout for new innovative products that can help cut costs and reduce emissions.  

Resources

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.