Denmark presents plan to allow delayed payment of large energy bills

Denmark’s government on Wednesday said it wants to introduce an arrangement which will allow people who receive high energy bills to partially freeze payment until a later date.

Denmark presents plan to allow delayed payment of large energy bills
Prime Minister Mette Frederiksen said on Wednesday the government plans to allow high energy bills over the next year to be paid in installments. Photo: Mads Claus Rasmussen/Ritzau Scanpix

Under the scheme, payment deadlines on energy bills could be frozen allowing them to be paid off in instalments.

The plan was presented by Prime Minister Mette Frederiksen at a briefing on Wednesday afternoon.

“This means that if the price of electricity, gas or district heating exceeds the price from last autumn, 2021, then you will be able to postpone payment of the excess amount to a later date, spread over several years,” she said.

The government would require backing from other parties to be able to vote the proposal through parliament by the winter.

High energy prices are expected to affect a large proportion of the Danish population in coming months, particularly those whose homes are heated by individual gas heaters.

Some households have already seen their energy costs double since last year.

READ ALSO: How much will Danish energy bills go up this winter?

“Very many Danish families will experience energy costs going up by many thousands of kroner per month,” Frederiksen said.

The model proposed by the government is voluntary, meaning bill payers would choose whether to freeze payments. The government would foot the bill with energy companies in the intervening period. Customers would need to contact energy companies to set up the repayment plan, news wire Ritzau writes.

The scheme would be in effect for an initial one-year period, but repayment would be permitted over several years.

“This is something we want agreed quickly with parliament,” Finance Minister Nicolai Wammen said.

“I expect we can have the first meetings by tomorrow evening. This needs everyone to roll their sleeves up and for us to find a solution together,” he said.

Two key parliamentary allies of the government, the Social Liberals (Radikale Venstre) and Socialist People’s Party (SF), gave tentative backing to the plan on Wednesday but called for further-reaching measures.

Social Liberal deputy leader Martin Lidegaard said his party would “review this proposal thoroughly and see if there’s anything in it that needs to be adjusted”.

“We think it initially looks sensible,” he also said, but added that “what I can say with certainty is that it can’t stand alone”.

The finance spokesperson with SF, Lisbeth Bech Nielsen said her party wanted “a direct helping hand for those who are impacted by these rising prices”.

“For some people it will create a huge amount of insecurity to be looking at a debt that will be accrued, because you are given a form of loan,” she said.

“We think that some people will simply need to be given financial help as well,” she said.

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Danish energy companies ordered to return 1.2 billion kroner

Energy companies must turn over 1.2 billion kroner of the last year’s windfall to the Danish treasury, according to the country’s tax minister.

Danish energy companies ordered to return 1.2 billion kroner

The money comprises part of the additional turnover raised by energy companies as a result of increased prices related to the energy crisis in 2022.

At least 1.2 billion of the extraordinary profit must be returned to the Danish state, tax minister Jeppe Bruus told business news outlet Finans. 

“Overall in 2023 there will be proceeds of 1.2 billion kroner. We want to return that money to consumers through the forthcoming negotiations on inflation relief,” Bruus said.

The minister meanwhile recognised that the 1.2 billion kroner sum is a fraction of what was expected to be recovered, which had been estimated at more than 10 billion. 

The tax ministry says it expects 800 million kroner from fossil fuel companies and 400 million kroner from electricity companies to be returned to the state through different regulations applied to either sector.

READ ALSO: Danish regulator says  electricity companies earn ‘excessive’ profits

In September, the European Commission said plans to cap to energy company profits as well as levy collections from fossil energy companies would raise 140 billion euros.

The policy was a key element of the Commission’s measures to relieve high energy prices for consumers.

The revenue will be used to assist consumers and small businesses that are struggling to pay bills.

READ ALSO: How much will energy cost in 2023 in Denmark compared to 2022?