Denmark
The world's highest wind share, run across two synchronous systems that meet only through a 600 MW cable. Denmark is two power markets wearing one flag.
Overview
Denmark runs the windiest power system in the world and it runs it twice. West of the Great Belt the grid is synchronous with continental Europe; east of it, with the Nordics. One country, two synchronous areas, two prices.
Wind supplied roughly 60% of Danish electricity in the year to mid-2026, with bioenergy near 19% and solar 14%, on Low Carbon Power figures. Fossil plant covers what is left — under 7% — and most of it now exists to be there on the days the wind is not. Consumption was 40.3 TWh in 2025 against 32.8 TWh of domestic generation, the gap closed by 7.5 TWh of net imports through one of the densest interconnection networks in Europe (Electricity Maps, Grid Review 2025).
Gas is a smaller business but a strategically loud one. The Tyra hub in the North Sea was shut in September 2019 for a full rebuild and did not restart until 22 March 2024, at a plateau of 5.7 million cubic metres a day (TotalEnergies). For those four and a half years Denmark, historically an exporter, bought its gas from Germany and Norway. In 2024 it swung back, ending the year a net exporter of 456 million cubic metres.
Sitting across both commodities is Energinet, the state-owned transmission system operator for electricity and gas alike — an arrangement that is rarer than it sounds and that shortens the distance between a gas balancing decision and a power system one. Power trades on Nord Pool in the DK1 and DK2 bidding zones. Gas trades at the ETF virtual point, which averaged 36.09 EUR/MWh in 2024.
It is the stress test everyone else is heading towards. Very high wind penetration, a small thermal fleet, and enough cable capacity that domestic scarcity usually becomes somebody else's price problem within the hour.
Market structure
Two bidding zones, one TSO, one exchange — and a regulator that reports on both fuels in the same document.
Who does what
| Function | Body | Role |
|---|---|---|
| Power exchange | Nord Pool | Day-ahead auction and intraday for DK1 and DK2 |
| Transmission — power and gas | Energinet | State-owned TSO for both systems |
| Regulation | Forsyningstilsynet | Tariffs, network access, market monitoring |
| Policy | Danish Energy Agency (ENS) | Tenders, licensing, energy statistics |
| Gas trading point | ETF | Virtual hub; primary exchange trading via Gaspoint Nordic |
DK1 and DK2
The split is electrical, not administrative. DK1 — Jutland and Funen — is part of the Continental European synchronous area and shares a border with Germany. DK2 — Zealand, including Copenhagen — is synchronous with the Nordic system and connects to Sweden. The two cannot be joined with an ordinary AC line, so they are joined by the Great Belt link, a 600 MW HVDC connection commissioned in 2010 (Great Belt power link).
Six hundred megawatts is not much. When wind blows hard in Jutland and Norwegian hydro is full, the Great Belt saturates and the two Danish zones price independently — sometimes by a wide margin, and occasionally in opposite directions, DK1 negative while DK2 sits at continental levels. Averaged over 2024 the two look almost identical: 70.6 EUR/MWh in DK1 against 70.9 EUR/MWh in DK2 (Forsyningstilsynet, national report 2024). Hourly, they are frequently nothing alike.
Retail and supply
Retail has been fully open since 2003, with a datahub run by Energinet handling metering and supplier switching. Distribution remains monopoly and revenue-capped. The commercially interesting layer is upstream: with 7,506 MW of wind capacity — 4,860 MW onshore, 2,646 MW offshore (Forsyningstilsynet, national report 2024) — against a peak demand of a few gigawatts, the merchant question in Denmark is rarely about volume and almost always about when and where.
Infrastructure — power and gas
Cables in every direction, a gas transmission grid that mostly serves someone else's market, and one very large offshore project still being built.
Power interconnection
| Link | To | Capacity | Zone |
|---|---|---|---|
| Skagerrak 1–4 | Norway | 1,700 MW | DK1 |
| Viking Link | Great Britain | 1,400 MW | DK1 |
| COBRAcable | Netherlands | 700 MW | DK1 |
| Kontek | Germany | 600 MW | DK2 |
| Great Belt | DK1 ↔ DK2 | 600 MW | internal |
Capacities per Skagerrak, Energinet on Viking Link, COBRAcable and Kontek. On top of these sit AC connections to Germany from Jutland and to Sweden from Zealand, plus Konti-Skan to Sweden's west coast.
Viking Link is the newest and the one that changed the shape of DK1. At 765 km it was the longest land and subsea interconnector in the world when it entered commercial operation at the end of December 2023, running from Revsing in southern Jutland to Bicker Fen in Lincolnshire. It gave Danish wind a second high-price sink at times when Germany was also long.
Under construction
The Bornholm Energy Island is the large one: 3 GW of offshore wind in the Baltic, landing on Bornholm and cabled onward to both the Danish and German grids. Denmark and Germany concluded the bilateral cost-sharing agreement on 26 January 2026, backed by more than EUR 645 million of Connecting Europe Facility support (European Commission).
Gas
Danish gas transmission connects the North Sea fields at Nybro to Germany, and — since 2022 — carries Norwegian gas across Denmark to Poland through Baltic Pipe, 10 bcm a year westbound to Poland with 3 bcm of reverse capacity into Denmark (Baltic Pipe). A single storage facility at Lille Torup and the Stenlille site provide seasonal flexibility. Domestic production is modest by European standards, and an unusually large slice of it is not fossil at all: biomethane made up 672 million cubic metres, 28.2% of Danish gas production, in 2024 (Forsyningstilsynet, national report 2024).
Demand and supply
Demand is growing again after a decade of flatness, supply is overwhelmingly weather-driven, and the balance is struck on cables rather than on plant.
Demand
Danish electricity consumption reached 40.3 TWh in 2025, up 5.2% on 2024, while domestic generation fell 5.0% to 32.8 TWh in a poor wind year (Electricity Maps, Grid Review 2025). Data centres, heat pumps and electrified transport are doing the work; so, increasingly, is electrolysis. Gas consumption went the other way, easing 1.5% to 1.80 billion cubic metres in 2024 as district heating continued to swap gas for biomass, waste and heat pumps.
Supply
Shares for the twelve months to mid-2026. Source: Low Carbon Power. Percentages are of generation, not of consumption — Denmark was a net importer of 7.5 TWh in 2025 (Electricity Maps, Grid Review 2025).
The composition matters less than its variance. A 60% wind share is an annual average built out of hours at 130% of demand and hours near zero. Bioenergy — straw, wood chip and waste in combined heat and power plants — is the flexible middle, though it is dispatched partly on heat demand rather than power price, which blunts it. Solar has grown fast enough to add a second, summer-shaped shoulder to the problem.
Gas balance
Total Danish gas production, including biomethane, was 2.38 billion cubic metres in 2024 against 1.80 billion of consumption, putting the country back in net export at 456 million cubic metres. That reversal is Tyra's doing, and it is worth keeping the sequence straight: exporter until 2019, importer through the rebuild, exporter again from 2024.
Denmark's transit role is larger than its own consumption. Baltic Pipe alone can carry 10 bcm a year across the country — more than five times what Danish customers burn.
Price setting mechanism
A marginal-cost auction cleared across most of Europe at once, in which the marginal unit in Denmark is very often not Danish.
The auction
Generators and suppliers bid into Nord Pool's day-ahead auction, which clears through the Single Day-Ahead Coupling algorithm alongside the rest of the coupled European market. Since 1 October 2025 the market time unit has been 15 minutes rather than an hour, implemented across all bidding zones and borders at once (Nord Pool). Each zone gets its own price; where the cable between two zones is not full, the prices converge.
That last point is the whole story of Danish price formation. Denmark has very little price-setting plant of its own. In most hours the marginal unit is German lignite or gas, Norwegian hydro water value, or — through Viking Link — a British CCGT. DK1 tends to follow Germany, DK2 tends to follow the Nordics, and the Great Belt decides how much they are allowed to disagree.
What wind does to the duration curve
At 60% wind share the price duration curve is not a smooth arc. It is a long flat middle punctuated at both ends: a tail of hours near or below zero when it blows and demand is soft, and a short, steep tail of scarcity hours in still, cold weather when everything must come from imports or from thermal plant that ran a handful of days that year.
Denmark recorded 650 hours of negative prices in 2024 — 375 in DK1 and 275 in DK2, a 27% increase on the year before (Forsyningstilsynet, national report 2024). Negative prices are not an anomaly here; they are a structural feature of a system with must-run heat-driven CHP, subsidised wind and finite export capacity. The annual averages, 70.6 EUR/MWh in DK1 and 70.9 in DK2, tell you almost nothing about that distribution.
Gas
Gas prices at the ETF virtual point track TTF closely, as they must for a system connected to Germany and supplied largely from the North Sea and Norway. ETF averaged 36.09 EUR/MWh in 2024, down 15.9% year on year. Where Danish gas does its own thing is on the transit spreads — the Baltic Pipe entry-exit stack — rather than on the commodity.
Regulatory regime
Forsyningstilsynet regulates the networks and monitors the markets; policy sits with the Ministry of Climate, Energy and Utilities and its agency; and above both sits EU electricity and gas law, which Denmark applies without the opt-outs it has elsewhere.
| Body | Remit |
|---|---|
| Forsyningstilsynet (Danish Utility Regulator) | Independent NRA for electricity, gas, district heating and waste |
| Danish Energy Agency (Energistyrelsen) | Offshore tenders, subsidy schemes, licensing, official statistics |
| Energinet | System operation, balancing, the datahub, network development plans |
| ACER and the EU framework | Cross-border rules, network codes, REMIT surveillance |
What the regulator actually does
Forsyningstilsynet sets the revenue caps that distribution companies operate under, approves Energinet's tariff methodology, handles third-party access disputes and publishes the annual national report from which most of the figures on this page are drawn (Forsyningstilsynet, national report 2024). Its 2026–2028 work plan adds hydrogen and supply preparedness as explicit areas — a signal about where the network regulation is heading.
The carbon tax
Denmark's green tax reform layers a national CO2 tax on top of the EU emissions trading system. Fully phased in by 2030, the rate is DKK 750 per tonne for emitters outside the ETS and DKK 375 per tonne for those inside it (Invest in Denmark). The design is deliberate: the ETS price does part of the work, and the national tax tops it up to a level the government considers consistent with Denmark's 2030 emissions reduction target.
For industrial operators the practical effect is that a Danish site pays a carbon cost its German or Dutch competitor does not, which pushes fuel switching, electrification and process heat decisions forward by years. For the power market the effect is indirect — Danish thermal generation is small — but it sharpens the economics of the biomass CHP fleet and of the electrolysers being built to absorb cheap wind hours.
Offshore tendering
The subsidy model has moved from contracts for difference towards zero-subsidy and negative-bid auctions, which stalled on 5 December 2024, when a 3 GW North Sea tender covering the A1, A2 and A3 sites closed without a single bid (Offshore). Government has since revisited the terms. Anyone modelling Danish offshore build-out should treat auction design, not resource, as the binding constraint.
Key links
Primary sources for this market. Figures on this page are drawn from these and from published market data.