On March 31 2016 the government launched the Energy Commission, a body intended to prepare recommendations for the objectives and direction of Danish energy policy from 2020 to 2030. The commission will contribute to Denmark's aim of meeting its international obligations on climate change in a cost-effective and market-based manner. It is expected to publish its recommendations on Danish energy policy in early 2017.

Background

In recent decades, Danish energy policies have supported the transition towards renewable energy. At the same time, the energy sector has been liberalised and energy companies are now market based.

In October 2014 EU member states agreed a new 2030 climate and energy framework, which will contribute to the future of Danish energy policy. The government wants to examine the consequences of the framework for Danish energy and climate policy and how Denmark can influence progress in the European Union in this regard.

Commission members

The Energy Commission comprises nine members from academia and industry with expertise in areas such as energy sector financing, competitive markets and future energy systems. The members are:

  • Niels B Christiansen, chief executive officer of Danfoss (chairman);
  • Per Heiselberg, professor at the University of Aalborg;
  • Jacob Østergaard, professor at the Technical University of Denmark;
  • Birgitte Sloth, associate dean at the University of Copenhagen;
  • Peter Møllgaard, professor at the Copenhagen Business School;
  • Peter Brixen, chief analyst at Muusman;
  • Søren Eriksen, vice president of Schneider Electric;
  • Morten Springborg, theme specialist at Carnegie Asset Management; and
  • Marianne Dahl Steensen, chief executive officer of Microsoft Denmark.

Tasks

The Energy Commission's overall task is to analyse and assess trends in the energy sector and make recommendations for a cost-effective Danish energy policy for the period 2020 to 2030. The recommendations must not affect state finances or increase socio-economic costs.

The commission was established to contribute to the government's aim that Denmark maintains its position as one of the leading countries in the transition towards renewable energy. The long-term goal is that Denmark will no longer be dependent on fossil fuels by 2050.

The Energy Commission will examine the following themes:

  • The Danish energy system's strengths and weaknesses. The scope of the analysis is to specify which investments, re-investments and strategic choices need to be made before 2030.
  • Cost-effective compliance with international climate obligations. The government wants an overall analysis of how Denmark can comply with its international climate obligations as cost effectively as possible.
  • A cost-effective EU energy market. The aim is to examine how the EU energy market can be organised to best serve the transition towards renewable energy. The analysis will determine what Denmark's priorities should be in terms of the EU energy market and which issues are best handled nationally.
  • A future integrated energy system. The analysis must include an assessment of how the regulatory framework can promote a more socio-economic, cost-efficient and integrated energy market.
  • Denmark as a technological pioneer. The aim is to determine how Denmark can maintain its position as a technological energy pioneer. The commission must assess the advantages and disadvantages of such efforts, including how socio-economic costs related to subsidies can be minimised.

Potential barriers for developing innovative technology and systems must be identified. Further, the commission must assess whether and how future research can benefit from focusing more on power, growth, employment and exports, as well as how to ensure that private companies participate more in funding.

Reaction of stakeholders

The launch and focus of the Energy Commission have received mixed reactions. Many have welcomed the commission and its focus on a market-based and cost-effective approach. Stakeholders hope that the commission can contribute to the creation of a technologically sound direction for energy policy that results in less insecurity for investments in the energy sector.

However, critics fear that the focus on cost efficiency may slow the transition towards renewable energy and hurt Denmark's position as a pioneer in the energy technology field.

For further information on this topic please contact Nicolaj Kleist at Bruun & Hjejle by telephone (+45 33 34 50 00) or email (nkl@bruunhjejle.dk). The Bruun & Hjejle website can be accessed at www.bruunhjejle.com.

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