GDPE0744ICR Denmark Power Market Outlook to 2030 Sample 1 ... · denmark power market outlook to...

REFERENCE CODE GDPE0744ICR | PUBLICATION DATE OCTOBER 2014

DENMARK POWER MARKET OUTLOOK TO 2030, UPDATE 2014 – MARKET TRENDS, REGULATIONS

AND COMPETITIVE LANDSCAPE

Denmark Power Market Outlook to 2030, Update 2014 – Market Trends, Regulations and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

DENMARK POWER MARKET OUTLOOK TO 2030, UPDATE 2014 – MARKET TRENDS, REGULATIONS AND COMPETITIVE LANDSCAPE

Executive Summary

Coal-based Thermal Capacity Dominates Electricity Generation in Denmark

Coal-based thermal power generation capacity

accounted for a XX% share of the total installed

capacity of Denmark in 2013, followed by installed

onshore wind capacity with XX%, gas-based

thermal generation capacity with XX%, biomass

with XX% and offshore wind capacity with XX%.

Other renewable sources such as solar PV, biogas

and small hydropower accounted for a share of

XX% in 2013, while the remaining XX% was

accounted for by oil-based thermal power capacity.

Power Market, Denmark, Cumulative Installed Capacity Breakdown by Type of Fuel (%), 2013

Coal (thermal)

Wind (onshore)Gas (thermal)

Biomass

Wind (offshore)

Other renewables: solar PV,

biogas, small hydropower

Oil (thermal)

Source: GlobalData, Power Database [Accessed on September 26, 2014]

Decline in Power Consumption and Generation from 2000 to 2013

Denmark recorded a decline in power consumption

from 2000 to 2013. Annual power consumption

amounted to XX Terawatt hours (TWh) in 2000,

which declined at a negative Compound Annual

Growth Rate (CAGR) of XX% to XX TWh in 2013.

Annual electricity generation also declined during

the same period from XX TWh in 2000 to XX TWh

in 2013, at a negative CAGR of XX%. Electricity

consumption has declined due to the very limited

growth of the residential sector, which is the largest

power consuming segment, as a result of the

collapse of the housing boom in Denmark in 2007,

which was further exacerbated by the global

recession in 2009 and the Eurozone crisis in 2011.

Power Market, Denmark, Annual Electricity Consumption and Generation (TWh), 2000–2013

2000 2007 2013

Annu

al p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on September 26, 2014]


Table of Contents


1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 7

1.2 List of Figures ..................................................................................................................... 8

2 Introduction ................................................................................................................................. 9

2.1 GlobalData Report Guidance ............................................................................................ 10

3 Denmark, Power Market, Snapshot .......................................................................................... 11

3.1 Denmark, Power Market, Macroeconomic Factors ............................................................ 11

3.2 Denmark, Power Market, Supply Security ......................................................................... 14

3.3 Denmark, Power Market, Generation Infrastructure .......................................................... 15

3.4 Denmark, Power Market, Transmission Infrastructure ....................................................... 15

3.5 Denmark, Power Market, Opportunities............................................................................. 16

3.6 Denmark, Power Market, Challenges ................................................................................ 16

4 Denmark, Power Market, Market Analysis ................................................................................ 18

4.1 Denmark, Power Market, Supply Structure ....................................................................... 18

4.2 Denmark, Power Market, Key Market Players ................................................................... 18

4.3 Denmark, Power Market, Financial Deals ......................................................................... 19

4.3.1 Deal Volume and Value Analysis, 2004–2013 ............................................................... 19

4.3.2 Deals by Type, 2013 ..................................................................................................... 21

4.4 Denmark, Power Market, Demand Structure ..................................................................... 21

4.4.1 Consumption by Sector, 2013 ....................................................................................... 24

5 Denmark, Power Market, Regulatory Scenario ......................................................................... 25


Table of Contents


5.1 Denmark, Power Market, Key Electricity Policies .............................................................. 25

5.1.1 Denmark, Power Market, Market Reforms ..................................................................... 25

5.1.2 Denmark, Power Market, Renewable Energy Policy and Incentives .............................. 25

5.1.3 Denmark, Power Market, Energy Targets and Strategy ................................................. 26

5.1.4 Denmark, Power Market, Initiatives for Energy Conservation ........................................ 26

5.2 Denmark, Power Market, Foreign Investment Scenario .................................................... 27

6 Denmark, Power Market, Capacity and Generation Overview ................................................... 28

6.1 Denmark, Power Market, Cumulative Installed Capacity by Type of Power Plant, 2013 .... 28

6.2 Denmark, Power Market, Cumulative Installed Capacity and Annual Power Generation,

2000–2030 ........................................................................................................................ 29

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–

2030 ............................................................................................................................. 32

6.2.2 Cumulative Installed Hydro Capacity and Annual Hydropower Generation, 2000–2030 36

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation,

2000–2030 ................................................................................................................... 39

7 Denmark, Power Market, Transmission and Distribution Overview ........................................... 44

7.1 Denmark, Power Market, Transmission Overview ............................................................. 44

7.2 Denmark, Power Market, Distribution Overview ................................................................ 45

7.3 Denmark, Power Market, Grid Interconnection .................................................................. 47

7.3.1 Interconnections of Eastern Denmark ........................................................................... 47

7.3.2 Interconnections of Western Denmark........................................................................... 47

7.3.3 Electricity Import and Export Trends, 2000–2013 .......................................................... 47

7.4 Denmark, Power Market, Electricity Trading ..................................................................... 49


Table of Contents


8 Denmark, Power Market, Competitive Landscape: Snapshot of Leading Power Generating

Companies ............................................................................................................................... 50

8.1 Key Company in the Denmark Power Market: Dong Energy ............................................. 50

8.1.1 Company Overview ....................................................................................................... 50

8.1.2 Business Description ..................................................................................................... 50

8.1.3 SWOT Overview ........................................................................................................... 51

8.2 Key Company in the Denmark Power Market: Vattenfall AB ............................................. 58

8.2.1 Company Overview ....................................................................................................... 58

8.2.2 Business Description ..................................................................................................... 58

8.2.3 SWOT Overview ........................................................................................................... 59

9 Appendix................................................................................................................................... 65

9.1 Market Definitions ............................................................................................................. 65

9.1.1 Power ............................................................................................................................ 65

9.1.2 Installed Capacity .......................................................................................................... 65

9.1.3 Active Installed Capacity ............................................................................................... 65

9.1.4 Electricity Generation .................................................................................................... 65

9.1.5 Electricity Consumption ................................................................................................. 65

9.1.6 Thermal Power Plant ..................................................................................................... 65

9.1.7 Hydropower Plant .......................................................................................................... 65

9.1.8 Nuclear Power............................................................................................................... 66

9.1.9 Renewable Energy Resources ...................................................................................... 66

9.2 Abbreviations .................................................................................................................... 67

9.3 Bibliography ...................................................................................................................... 68


Table of Contents


9.4 GlobalData’s Methodology ................................................................................................ 69

9.4.1 Coverage ...................................................................................................................... 69

9.4.2 Secondary Research and Analysis ................................................................................ 69

9.4.3 Primary Research and Analysis..................................................................................... 70

9.5 Disclaimer ......................................................................................................................... 70

1.1 List of Tables

Table 1: Power Market, Denmark, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2018 ................................................................................................. 14

Table 2: Power Market, Denmark, Market Share of Leading Power Generation Companies (%), 2013 ...... 19

Table 3: Power Market, Denmark, Deal Value ($bn) and Deal Volume (Units), 2004–2013 ........................ 20

Table 4: Power Market, Denmark, Annual Electricity Consumption (TWh), 2000–2030 .............................. 23

Table 5: Power Market, Denmark, Electricity Consumption by Sector (%), 2013 ........................................ 24

Table 6: Power Market, Netherlands, Foreign Direct Investment ($bn), 2009–2013 ................................... 27

Table 7: Power Market, Denmark, Cumulative Installed Capacity by Fuel Type (%), 2013 ......................... 29

Table 8: Power Market, Denmark, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2030 ...................................................................................................................... 31

Table 9: Power Market, Denmark, Leading Active Thermal Power Units (MW), 2013 ................................. 33

Table 10: Power Market, Denmark, Cumulative Installed Thermal Capacity (GW) and Annual Thermal Power

Generation (TWh), 2000–2030 .................................................................................................... 35

Table 11: Power Market, Denmark, Active Hydropower Projects, 2013 ........................................................ 36

Table 12: Power Market, Denmark, Cumulative Installed Hydropower Capacity (MW) and Annual

Hydropower Generation (GWh), 2000–2030 ................................................................................ 38

Table 13: Power Market, Denmark, Leading Active Renewable Power Plants, 2013 .................................... 40

Table 14: Power Market, Denmark, Upcoming Renewable Power Plants, 2014–2020 ................................. 41


Table of Contents


Table 15: Power Market, Denmark, Cumulative Installed Renewable Capacity (GW) and Annual Renewable

Power Generation (TWh), 2000–2030 ......................................................................................... 43

Table 16: Power Market, Denmark, Transmission Line Length (Ckm), 2000–2020 ...................................... 45

Table 17: Power Market, Denmark, Distribution Line Length (Ckm), 2000–2020 .......................................... 46

Table 18: Power Market, Denmark, Annual Electricity Import and Export (TWh), 2000–2013 ....................... 49

Table 19: Power Market, Denmark, DONG Energy A/S, SWOT Analysis ..................................................... 52

Table 20: Power Market, Denmark, Vattenfall AB, SWOT Analysis .............................................................. 59

Table 21: Abbreviations .............................................................................................................................. 67

1.2 List of Figures

Figure 1: Power Market, Denmark, Gross Domestic Product ($bn) and Population (million), 2000–2019 ..... 12

Figure 2: Power Market, Denmark, Annual Power Consumption (TWh), 2000–2019 ................................... 13

Figure 3: Power Market, Denmark, Market Share of Leading Power Generation Companies (%), 2013 ...... 19

Figure 4: Power Market, Denmark, Deal Value ($bn) and Deal Volume (Units), 2004–2013 ........................ 20

Figure 5: Power Market, Denmark, Annual Electricity Consumption (TWh), 2000–2030 .............................. 22

Figure 6: Power Market, Denmark, Electricity Consumption by Sector (%), 2013 ........................................ 24

Figure 7: Power Market, Denmark, Cumulative Installed Capacity by Fuel Type (%), 2013 ......................... 28

Figure 8: Power Market, Denmark, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2030 ...................................................................................................................... 30

Figure 9: Power Market, Denmark, Cumulative Installed Thermal Capacity (GW) and Annual Thermal Power

Generation (TWh), 2000–2030 .................................................................................................... 34

Figure 10: Power Market, Denmark, Cumulative Installed Hydropower Capacity (MW) and Annual

Hydropower Generation (GWh), 2000–2030 ................................................................................ 37

Figure 11: Power Market, Denmark, Cumulative Installed Renewable Capacity (GW) and Annual Renewable

Power Generation (TWh), 2000–2030 ......................................................................................... 42

Figure 12: Power Market, Denmark, Annual Electricity Import and Export (TWh), 2000–2013 ....................... 48



Introduction

2 Introduction

Denmark is a highly developed country, characterized by high standards of living and an equitable

distribution of income. It is a technologically advanced country and has established a strong

foothold in various industrial segments, including maritime shipping, pharmaceuticals and energy.

The country is actively engaged in international trade and is a net exporter of food and energy. As

a result, it has a favorable Balance of Payments (BoP) position. Denmark is also distinguished,

among other nations, as an attractive place to do business. It is a member of the European Union

(EU), is also a member of the International Monetary Fund (IMF), The World Bank, Organization for

Economic Co-operation and Development (OECD) and the World Trade Organization (WTO).

The economy suffered an initial slowdown after the end of a housing boom in 2007. Following this,

there was a sharp decline in housing prices over 2008 and 2009, which continued into 2011. There

was also a major decline in consumer confidence, exports and investment demand. The global

financial crisis also resulted in the decline of Denmark’s Gross Domestic Product (GDP) growth

rates, by XX% in 2008, then XX% in 2009. A modest recovery was registered in 2010, when GDP

recorded a growth rate of XX%. Traditionally known for its low levels of unemployment, the country

recorded an unemployment rate of around XX% between 2010 and 2012. The country’s BoP

situation also went into deficit during 2009. The government has since endeavored to provide a

major boost to its economy, and at the end of 2012, announced a modest stimulus package for the

economy. Despite unfavorable circumstances, the country occupies a strong fiscal position in

comparison with other EU countries. The Danish Krone is a part of ERM II mechanism, so its

exchange rate is tied to within XX% of the Euro.

With a GDP of $XX billion (measured at constant market prices) in 2013, the country registered a

GDP growth of XX% over 2012 (StatBank Denmark, 2014). The services sector contributed the

highest share of GDP in 2012 with XX%, followed by the industrial sector with XX% and the

agricultural sector with XX% (CIA, 2014). The country primarily exports pharmaceuticals,

machinery and instruments, and dairy products. Its chief trading partners include Germany,

Sweden, Norway, the Netherlands and France.

The Danish Ministry of Climate and Energy is responsible for exercising general control over the

electricity sector in Denmark. The regulatory body authorized to formulate the country’s legal

framework in relation to energy is the Energitilsynet, Danish Energy Regulatory Authority (DERA).

Dong Energy and Vattenfall are the two leading power generators in Denmark. In its 2012 Energy



Introduction

Agreement, the Danish government established a target for wind energy sources to account for

XX% of electricity consumption by 2020. The government also aims to generate XX% of total

energy consumption from renewable energy sources by 2020. Furthermore, it aims to reduce

carbon dioxide emissions by XX% in 2020, compared with 1990 levels.

2.1 GlobalData Report Guidance

The executive summary captures key growth trends in the Danish power market.

Chapter three provides a snapshot of the key parameters that affect Denmark’s power sector,

as well as key points about the power market in Denmark.

Chapter four provides a power market analysis for Denmark.

Chapter five provides details of the regulatory scenario for the power market and the inward

foreign investment scenario in Denmark.

Chapter six provides information regarding Denmark’s cumulative installed capacity and annual

generation trends, as a whole and also by individual generation source.

Chapter seven describes the power Transmission and Distribution (T&D) infrastructure in

Denmark and includes information on interconnectors with neighboring countries. The section

also covers electricity import and export and upcoming grid-related projects in Denmark.

Note: all 2013 market numbers provided in the report are estimates, except where actual data were

available.


Snapshot


3 Denmark, Power Market, Snapshot

3.1 Denmark, Power Market, Macroeconomic Factors

The Danish economy registered steady growth until 2007. The bust in the housing sector boom

slowed the economy in 2007, which was further exacerbated by the global economic recession of

2008 and 2009. Denmark’s GDP (at constant prices) declined by XX% in 2008 and by XX% in

2009. Although the economy picked up marginally by XX% in 2010, growth was again slower in

2011 at XX%, and in 2012, it again dipped at a negative XX%. The Danish economy picked up in

2013 with a marginal growth of XX%, primarily due to a stimulus package from the government and

is expected to continue growing during the 2014–2018 forecast period. The economy is expected

to grow at a CAGR of XX% from 2014 to 2019.

The Danish population registered negligible growth from 2000 to 2013, from XX million in 2000 to

XX million. In Denmark, the residential sector is one of the largest consumers of electricity. The

economy went through a rough patch from 2008 to 2012 and this affected the industrial and

manufacturing sector, which follows the residential sector in terms of electricity consumption. In

light of this, it is easy to understand why electricity consumption declined by a negative average

annual of XX% between 2007 and 2009 or by a negative average annual of XX% between 2007

and 2013.

Denmark’s electricity consumption amounted to XX Terawatt hours (TWh) in 2000, which declined

to XX TWh in 2016 at a negative CAGR of XX%. However, with the economy coming out of the

recessionary phase in 2014, power consumption is expected to increase and, by 2019, annual

electricity consumption is expected to have reached XX TWh, increasing from XX TWh in 2014, at

a CAGR of XX%.


Snapshot


Figure 1: Power Market, Denmark, Gross Domestic Product ($bn) and Population (million), 2000–2019

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Pop

ulat

ion

(mill

ion)

GD

P ($

bn)

GDP (constant prices) Population

Source: GlobalData; IMF, 2014



Market Analysis

4.4.1 Consumption by Sector, 2013

The residential sector is the largest power consuming sector in Denmark. In 2013, it accounted for

an estimated XX% of total power consumption, followed by the commercial sector with XX%. The

industrial sector, consisting of energy and manufacturing, accounted for XX% of total power

consumption in 2013. Agriculture and transport services accounted for respective shares of XX%

and XX%.

Figure 6: Power Market, Denmark, Electricity Consumption by Sector (%), 2013

Residential

Commercial

Industrial

AgriculturalTransport

Source: GlobalData

Table 5: Power Market, Denmark, Electricity Consumption by Sector (%), 2013 Sector Share (%)

Residential

Commercial

Industrial

Agricultural

Transport

Source: GlobalData


Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

This term refers to the rate of production, transfer or energy use – it is usually related to electricity.

Measured in Watts and often expressed in kilowatts (kW), Megawatts (MW) or Gigawatts (GW). It

is also known as "real" or "active" power.

9.1.2 Installed Capacity

This refers to the generator’s nameplate capacity (as stated by the manufacturer) or the maximum

rated output of a generator under given conditions. Installed capacity is given in Megawatts (MW)

on a nameplate affixed to the generator.

9.1.3 Active Installed Capacity

This refers to the component of electric power that actually performs work, given in kilowatts (kW)

or Megawatts (MW).

9.1.4 Electricity Generation

This refers to the production of electric energy, achieved through the transformation of other forms

of energy. This term also refers to the amount of electric energy produced. It is measured in

Gigawatt hours (GWh) or Terawatt hours (TWh).

9.1.5 Electricity Consumption

This refers to the sum of electricity generated, plus imports, minus exports, minus transmission and

distribution losses. It is measured in Gigawatt hours (GWh) or Terawatt hours (TWh).

9.1.6 Thermal Power Plant

This refers to a plant in which turbine generators are driven by burning fossil fuels.

9.1.7 Hydropower Plant

This refers to a plant in which the turbine generators are driven by falling water.


Appendix


9.1.8 Nuclear Power

This refers to the electricity generated by the use of thermal energy, released from the fission of

nuclear fuel in a reactor.

9.1.9 Renewable Energy Resources

This refers to naturally replenishing energy resources that are limited in the amount of energy that

is available per unit of time. Biomass, geothermal, solar and wind energy are all renewable

resources.


Appendix


9.2 Abbreviations

Table 21: Abbreviations AC Alternating Current

BoP Balance of Payment

CAGR Compound Annual Growth Rate

Ckm Circuit kilometer

CO2 Carbon Dioxide

DC Direct Current

DEA Danish Energy Agency

DERA Danish Energy Regulatory Authority

DKK Danish Krone

EU European Union

FDI Foreign Direct Investment

GDP Gross Domestic Product

GW Gigawatt

GWh Gigawatt Hour

HVDC High Voltage Direct Current

IMF International Monetary Fund

kV Kilovolt

MW Megawatt

OECD Organization for Economic Cooperation and Development

PV Photovoltaic

SWOT Strengths, Weaknesses, Opportunities and Threats

T&D Transmission and Distribution

TWh Terawatt hour

WTO World Trade Organization

Source: GlobalData


Appendix


9.3 Bibliography

BP (2014). BP Statistical Review of World Energy, June 2014 [database]. BP Plc. Available at:

http://www.google.co.in/url?url=http://www.bp.com/content/dam/bp/excel/Energy-

Economics/statistical-review-2014/BP-

Statistical_Review_of_world_energy_2014_workbook.xlsx&rct=j&frm=1&q=&esrc=s&sa=U&ei=

81cpVLmdJ4KVuQTOqoCICA&ved=0CBYQFjAB&sig2=uY-

nHvrj533nlGP2KngyVQ&usg=AFQjCNGiSM5vgRxZBRpC45gdWL0E9-XTqg [Accessed on

September 25, 2014]

CIA (2014). Denmark: The World Factbook. Central Intelligence Agency. Available from:

https://www.cia.gov/library/publications/the-world-factbook/geos/da.html [Accessed on

September 25, 2014]

Denmarks Nationalbank (2014). Direct Investments [database]. Danmarks Nationalbank.

Available from:

http://nationalbanken.statistikbank.dk/statbank5a/SelectTable/omrade0.asp?SubjectCode=904

&PLanguage=1&ShowNews=OFF [Accessed on September 26, 2014]

IMF (2014). World Economic Outlook Database, April 2013 [database]. International Monetary

Fund. Available at: http://www.imf.org/external/pubs/ft/weo/2014/01/weodata/weoselgr.aspx

[Accessed on September 25, 2014]

NIB (2012). Denmark. Greenland Self Rule Government. Nordic Investment Bank. Available

from: http://www.nib.int/loans/agreed_loans/309/greenland_self_rule_government [Accessed

on September 25, 2013]

StatBank Denmark (2014). Main accounts (constant prices, DKK million) by kind of account

and price unit [database]. StatBank Denmark. Available from:

http://www.statbank.dk/statbank5a/SelectVarVal/Define.asp?MainTable=NAT02&PLanguage=

1&PXSId=0&wsid=cfsearch [Accessed on September 25, 2014]


Appendix


9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

backgrounds in marketing, market research and consulting in the power industry, and advanced

statistical expertise.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

the Strategic and Competitive Intelligence Professionals (www.scip.org).

The following research methodology is followed for all country outlook reports.

9.4.1 Coverage

This report gives detailed information on Denmark’s power market. It examines Denmark’s power

market structure and provides historical and forecast numbers for generation, capacity and

consumption up to 2030. The report provides insights on the market’s regulatory structure, import

and export trends, competitive landscape and leading active and upcoming power projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources, including, but not limited to:

Government agencies, ministerial websites, industry associations, the World Bank, statistical

databases

Company websites, annual reports, financial reports, broker reports and investor presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases, including the Capacity and Generation Database, the

Power Plant Database and the Transmission and Distribution Database.

Further to this, the following secondary information is collected and analyzed to project Denmark’s

power market scenario through to 2030, analyzing factors such as the following:

Denmark’s macro-economic scenario

Government regulations, policies and targets

Government and private sector investments


Appendix


Contract and deal announcements

Utility expansion plans

The sector’s historic track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations.

9.4.3 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify and fine-tune the market numbers obtained through secondary research and get first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including equipment manufacturers,

industry associations, government bodies, utilities, distributors, and academia. The participants

include, but are not limited to, C-level executives, industry consultants, academic experts, business

development and sales managers, purchasing managers, plant managers, government officials,

and industry spokespeople.

9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

This report is a licensed product and should not to be reproduced without prior permission.

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