With broad political support, an emergency plan for the electricity grid from the Danish government was presented. It must ensure that the electricity grid is used for what is seen as most important for Denmark. Connections for large new data centres that are not associated with critical societal functions are placed last.
Denmark has historically had enough electricity grids, but that is no longer the case. Capacity is close to being used up in several places, and demand for grid connections is growing faster than the planned expansion can keep up. This is a challenge for companies that want to electrify, and thus for green climate action.
As it is today, connection to the electricity grid is largely based on the first-come, first-served principle. In the future, Energinet and the grid companies must be able to prioritize access to the grid, and this must be done in a way that supports the everyday lives of ordinary Danes, the critical functions of society and the electrification of society.
"We are in a situation where the lack of space in the electricity grid risks slowing down green climate action", says Minister of Climate, Energy and Utilities Samira Nawa. "We cannot accept that. That is why I am pleased that there is broad support and willingness to take responsibility for an emergency plan that ensures that the available capacity we have is used for what is most important for Denmark. Ordinary households, healthcare, defense, transportation, heating supply, companies and renewable energy should not be at the back of the queue, while very large and inflexible projects take up the limited capacity. We are changing that now."
Emergency plan is the first step
Once the consultation period is over, the bill will be presented to the Danish Parliament after the summer break. The plan is that Energinet and the grid companies can administer according to the new rules when they next process requests for larger grid connections in the autumn.
The bill will give Energinet and the grid companies the ability to prioritize grid connections according to politically determined criteria, reject some types of projects in special cases, and ensure a clearer basis for the administration of the scarce capacity in the electricity grid. This is something that the industry has strongly urged politicians to act on.
Requests for grid connection are divided into four categories, with requests in category 1 being prioritized first and so on:
- Category 1: Protected needs and critical societal functions (including data centers linked to critical societal functions).
- Category 2: Direct electrification, renewable energy, CCS, hydrogen, PtX and other projects.
- Category 3: Energy storage and power system support projects.
- Category 4: Certain large energy consumers. The category will initially include data centers that are typically not geographically bound and may have a consumption pattern that negatively impacts the network. (However, data centers that are associated with critical societal functions may be prioritized under category 1.)
Danish Data Center Industry responds
Danish Data Center Industry says in a repsonse it recognizes the need for an urgent plan to handle the current capacity challenges in the electricity grid, but emphasizes that the debate should not develop into a choice between the green transition and the digital transition.
"Denmark needs both. We need a stronger electricity grid, but we also need the digital infrastructure on which AI, cloud, cybersecurity and the digitalization of both business and the public sector are built. Therefore, the proposed model raises some very central questions about Denmark's future digital competitiveness," says Henrik Hansen, CEO of Datacenter Industrien.
According to Danish Data Center Industry, the biggest challenge with the model is the uncertainty it risks creating about long-term investments in digital infrastructure. "Long-term investments in digital infrastructure require clear frameworks and predictability. If Denmark becomes a less predictable country to invest in than our neighboring countries, we risk weakening the digital foundation on which future growth, innovation and competitiveness are built."
The Data Center Industry said it welcomes the fact that the government is initiating separate work on data centers' opportunities to connect to the electricity grid, and the organization also views the ambitions for a comprehensive energy infrastructure plan positively.
More work
After the summer holidays, discussions among the polical parties in Denmark will continue on faster expansion of the electricity grid and a comprehensive energy infrastructure plan for 2035, which will equip Denmark for the growing demand for green electricity.
"The emergency plan is the first step to correct the massive challenge that our electricity grid is currently facing. It helps us to use the capacity we already have better and more purposefully. But it does not solve the challenges alone. Therefore, we also need more electricity grids, faster expansion and a long-term plan for the energy infrastructure that will support Denmark's green climate action in the coming decades. We will start this work immediately after the summer holidays," says Minister of Climate, Energy and Utilities Samira Nawa.
Together with the emergency plan, the minister is also establishing a new dialogue forum with the participation of authorities, Energinet, KL, grid companies and electricity grid customers, and a high-level working group will also be established to contribute to handling the capacity challenges.
