Direct Electricity Supply Lines To Be Allowed In Denmark

• Published date: 06 September 2023
• Law Firm: Kromann Reumert
• Author: Christopher Dalgas, Peter Hobit Juel and Yassin Abouardini

As part of the efforts to make the Danish energy regulatory framework accommodating for Power-to-X projects, a draft bill has been presented to the Danish Parliament, proposing to allow the establishment of direct electricity supply lines, thereby reversing the current administrative practice of the Danish Energy Agency ("DEA"). This newsletter takes you through the proposed new rules.

Background

The Danish electricity grid is based on a collective approach where both production facilities and offtakers have been connected to either the collective distribution or transmission grids. The approach has proved successful in expanding and enhancing the Danish electricity grid in areas where the transmission system operator or the distribution system operators ("DSO") may not necessarily have an economic incentive to do so.

The collective approach has entailed that the DEA, with only a few exceptions, has so far not permitted the establishment of direct electricity supply lines from the site of the electricity producing facility, e.g. an onshore wind farm, to the site of consumption, e.g. a factory or data centre requiring large amounts of electricity to operate, thus bypassing the collective grid. Instead, production facilities are currently required to connect to the grid and feed in their entire production, which can then be offtaken at the site of consumption by the end-customer. Only if the DSO has declined to connect the offtaker to the grid can direct electricity...