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ENERGY

Why are electricity prices increasing in Denmark?

A combination of factors are causing energy prices to increase markedly across Europe. Denmark is no exception to the trend.

A newly-installed electricity meter in Copenhagen. Denmark has not avoided the trend of rising energy costs currently seen in much of Europe.
A newly-installed electricity meter in Copenhagen. Denmark has not avoided the trend of rising energy costs currently seen in much of Europe. File photo: Kristian Djurhuus/Ritzau Scanpix

Electricity prices hit their lowest levels for years last spring, at the beginning of the coronavirus crisis, exacerbating the sense that prices are on the up now.

Dramatic hike in natural gas prices

According to Dansk Energi, an interest organisation for the energy sector in Denmark, the biggest cause of expensive electricity bills is a six-fold increase in natural fossil gas in the last six years.

Prices on the international energy market follow that of the most expensive energy producer – so if, for example, an expensive gas-powered energy plant is needed to ensure enough supply, that will set the market price.

European countries normally try to favour natural gas reserves global prices heat up and consumption peaks during winter. But stores are already low due to unusually demand during the summer.

Meanwhile, Russia has reduced some of its gas supply to Europe, impacting prices on the continent.

This means that people in Denmark who use gas heating systems are likely to be hit by price hikes more than those with electricity-powered pumps, because gas prices have risen twice as much as electricity prices. The electric pumps are also more efficient than the gas-powered heating systems.

Economic upswing after Covid-19 restrictions eased 

The coronavirus crisis is not yet over, but it can certainly seem that way in Denmark, which is enjoying a post-restrictions economic boom resulting in low unemployment, a labour shortage and strong currency.

Denmark is not alone in seeing an economic surge after the low ebb in 2020 caused by the pandemic. According to the EU Commission, global GDP is now expected to rise by 5.9 percent from 2020-2021, an increase on an earlier projection of 4.7 percent.

The economic booms in various countries mean an increase in energy use, and thereby higher demand and higher costs, because markets are behind on supply of coal, oil and gas.

Higher CO2 costs in the EU

The cost for businesses with high CO2 emissions has increased significantly since 2017, when the EU ratified its Market Stability Reserve. In short, this meant that the cost of quotas which must be purchased by companies to offset large CO2 emissions – including electricity producers – has shot up from 8 euros per tonne to 60 euros per ton, according to Dansk Energi.

Wind and rain 

Reservoirs in parts of Scandinavia which are used to produce electricity are lower than usual. For example, Norway’s reservoirs were 15 percent less full than usual in September, according to Energi Norge. As such, less energy is produced by hydroplants.

Meanwhile, the wind has been blowing a bit less than expected in northern Europe in the autumn. That means there is less cheap electricity available from wind turbine farms.

When energy is not available from green sources, it must be procured elsewhere – such as from fossil fuel plants, where costs are currently higher than normal as outlined above.

What can I do to limit the damage on my own bills? 

Website Elpris.dk enables consumers in Denmark to compare the price of electricity from different suppliers. Prices from the various suppliers can be searched on the website, as can information on, for example, whether the energy you buy comes from sustainable sources.

The resource website is aimed at consumers and companies with consumption of up to 100,000 kroner annually.

Consumers can also try to cut down on their use of electricity, of course, with techniques such as using timers on appliances, closing doors to unused rooms, and switching off appliances at sockets when not at home. It’s arguable that this could also apply when prices are low.

Is there any good news?

Forward markets – set prices paid for future delivery of electricity – are set to fall after the coming winter and continue to drop next year, Dansk Energi writes in its analysis of the situation.

The interest organisation for the energy sector also writes that an improvement in sustainable energy production in coming years could see electricity become both cheaper and greener.

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MONEY

Four websites and apps for buying and selling second hand in Denmark

What's the best place to pick up vintage clothes, a coffee table or a bicycle at a bargain second-hand price online in Denmark? Here are four options.

Four websites and apps for buying and selling second hand in Denmark

With no Danish edition of eBay, there’s not a single platform which dominates the market when it comes to finding second-hand items or selling on things to a new home.

The four apps and websites listed below can all be used to buy second-hand items and list your own for sale. Some might be more suited for specific purposes or types of item than others.

Reshopper

If you’re looking for a baby jogger, jumpsuit (flyvedragt) or Peppa Pig toys, this is probably your best option. The Reshopper app includes listings by a good number of private sellers and can be sorted by location, meaning it’s often possible to find what you need locally. Some sellers offer postage and in some cases you might need to collect the item in person. If you’re lucky, the seller can drop off the item.

Prices are reasonable – I would say they are more than competitive compared to increasingly expensive charity and second-hand shops, particularly in the Copenhagen area.

Sellers can choose whether to offer shipping and have payment processed through the app, in other cases payment is arranged between the buyer and seller. A messaging function allows arrangements to be made.

There are “Mom” and “Home” sections on the app, but it’s for baby and kids’ wares that Reshopper really comes into its own.

I managed to pick up a baby jogger for 450 kroner from a private seller on the app a couple of years ago. I’ve used it frequently since and it has certainly proved worth the money, only needing a couple of new inner tubes during that time.

In addition to downloading the app, I’d recommend following Reshopper on Instagram. They have recently started opening pop-up stores where you can find great deals on clothing, toys and equipment for kids. This is not restricted to used items – you might find new products that have been discarded because they are from previous seasons or have been returned to manufacturers.

Den Blå Avis (DBA)

The legacy option for buying second-hand, DBA started life as a classified ads paper many years ago and can now be browsed as an app or website.

You can find anything on DBA, from sofas to PC components to cars. I bought my car through an ad on the site and, like my baby jogger, I’m happy to say it’s been one of my better purchases and is still going strong two years down the line.

DBA is probably the closest equivalent Denmark has to eBay but should be used with caution because it doesn’t offer the same level of protection to buyers. Many sales still involve transferring money directly to sellers (often using the MobilePay payment app) and trusting them to ship the item. This might go well most of the time but there are scammers out there.

One way to protect yourself is to make sure you only buy from sellers who have verified themselves using Denmark’s MitID digital ID system, a function DBA introduced in recent years.

Unlike eBay, you don’t enter auctions for items on DBA but you can send messages to sellers whose items interest you.

Facebook Marketplace

If you’re on Facebook, you’ve probably come across the Marketplace platform. Now popular in many countries including Denmark, Marketplace has challenged and arguably overtaken DBA as the spot most people sell their unwanted items.

Because it’s populated with sellers keen to shift their goods – and possibly less concerned about the price they receive for them – it can be a good place to pick up a bargain. This is something which is harder to come by than it used to be in physical second-hand stores.

Marketplace can be found on the Facebook app or via this link.

Trendsales

As the name suggests, Trendsales is a clothing-focused platform and is in fact the largest Danish marketplace for used clothing as well as lifestyle items.

You’ll find all sorts of clothing there – it’s not limited to designer or fashion items, so you should be able to pick up a comfortable hoodie from H&M or look for a vintage t-shirt and be in luck.

The interface is easy on the eye and user-friendly, and the prices often surprisingly reasonable. Sellers can choose delivery options and may or may not accept in-person collection.

READ ALSO: How to save money as a student in Denmark

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