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.
“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.