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Why energy should still be conserved in Denmark despite lower prices 

Energy authorities in Denmark have advised consumers to continue with electricity saving measures despite a current fall in prices.

Why energy should still be conserved in Denmark despite lower prices 
Electricity saving measures are still relevant in Denmark despite a drop in price which is likely to be temporary, authorities say. Photo: Ida Marie Odgaard/Ritzau Scanpix

The price of a kilowatt of energy in Denmark dropped from an average of 3.5 kroner in August to 1 krone in October, according to figures reported by broadcaster DR.

An unusually mild autumn has kept demand low, while favourable winds have bolstered wind energy production.

That has allowed many people to hold off from using heating in their homes well beyond the usual start date for the heating season of October 1st.

While some housing companies have now encouraged residents to switch on their heating, measures for limiting electricity consumption should still be followed where possible, experts told DR.

READ MORE: When should I turn on my heating in Denmark this winter

“Unfortunately, we probably cannot expect electricity prices to continue to fall,” Kristian Rune Poulsen of interest organisation Green Power Denmark told DR.

“It is probably a temporary situation that we have a significant surplus of gas and thus relatively low electricity prices,” he said.

The deputy director of the Danish Energy Agency (Energistyrelsen) said it’s important to continue being judicious with electricity use because the lower price is likely to be a temporary reprieve. 

“Yes, things look better now with prices than they did one month ago, but that doesn’t mean we can lean back and believe the crisis is over with,” deputy director Stine Leth Rasmussen told DR.

Measures adopted by people in Denmark to reduce electricity costs include using appliances at off-peak times and monitoring prices using apps.

READ ALSO:

The price of electricity is low in part because the demand for gas is currently low with stocks full – itself partly a result of energy-saving measures. Additionally, favourable wind conditions have given strong electricity production from Danish turbines, meaning gas is less used to produce electricity.

It should be noted that not everyone will benefit from short-term lower electricity prices. People with fixed-rate electricity plans are unlikely to see a change to the rate they pay in the immediate future.

As winter sets in, consumption of gas will increase, reducing the stocks Denmark has at its storage facilities, Rasmussen said.

“We still expect there will be scarcity and high prices on gas in the long term in Europe. We are looking towards a scarce supply situation next year when gas stocks are to be filled prior to the heating season. So the crisis is not over,” she said.

As such, continuing energy saving measures can still take the edge off high energy bills and will also help to conserve supplies in Denmark and Europe, she said.

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ENERGY

Danish consumers urged to keep conserving energy to avoid high costs

Although the price of electricity has recently fallen back from recent recent sky-high levels, it’s important that Danish consumers don’t return their usage habits to normal, energy experts say.

Danish consumers urged to keep conserving energy to avoid high costs

Energy prices in Denmark are currently lower than they were in the late summer and early autumn, but experts say that turning heating up to full blast – and generally scrapping measures to reduce consumption – will still result in costly bills.

While prices were high, many people in Denmark adapted their consumption habits in an effort to preserve stores and avoid high costs.

Public buildings and many businesses meanwhile implemented lower temperatures on thermostats, and power-hungry activities such as outdoor ice rinks or Christmas lighting were cancelled or cut back.

READ MORE: 

With the weather now colder, energy prices are currently low.

That is partly because Denmark’s gas reserves that serve as an emergency backup are full, while issues at European power plants that exacerbated the crisis have been largely resolved. 

The cold weather and lower prices may tempt many to return to former habits and turn heating up as usual. But this could still see energy bills eventually hit record levels, experts have warned.

“We will have to think about what we use our electricity and gas for and make savings where we can,” Jim Vilsson, senior economist at state-owned energy company Energinet told broadcaster TV2.

“Otherwise, we could end up in a situation where we again risk being short of energy,” he said.

Data from Nordic energy stock market Nord Pool, reported by TV2, show the unit price of electricity hitting 4.36 kroner per kilowatt hour (not including fees and taxes) in late August.

The price was 0.9 kroner per kilowatt hour as of November 20th.

Gas prices similarly peaked in late August and before falling, but are higher than they were in November 2021.

READ ALSO: At what time of the day is electricity cheapest in Denmark?

“Supply wise we are well stocked at the moment. We have got the European gas strores filled well up and they are actually completely full in Denmark,” Vilsson told TV2.

Gas stocks remained full further into the late autumn than usual, according to raw material analyst Ole Sloth Hansen of Saxo Bank.

“We have only just seen gas stocks be reduced and this was three weeks later than normal. So we have lots of gas, but we’re not home and dry yet,” Hansen told TV2.

Consumers in Denmark have meanwhile reduced their consumption by an average of around 10 percent.

“The market is a little better than it was before. But I’m putting extra emphasis on ‘little’, because it’s based on a situation where we expect a relatively normal or mild winter,” Vilsson said.

Increased consumption could help to push current lower prices back up as well as deplete stocks, he warned.

“We have been able to keep prices down because we have stood together and been good at saving. If we go back to normal, we could be in a situation again where we will lack gas, coal or electricity,” he said.

READ ALSO: How do I check my Danish electricity plan and decide whether to change?

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