Dimension Energy security

(i) National objectives with regard to:

- increasing the diversification of energy sources and supply from third countries, the purpose of which may be to reduce energy import dependency,

- increasing the flexibility of the national energy system, and

- addressing constrained or interrupted supply of an energy source, for the purpose of improving the resilience of regional and national energy systems, including a timeframe for when the objectives should be met;

Stable and reliable energy supply is considered a prerequisite for the Danish society. The effectiveness and functioning of the economy, public organizations and private households depend on a reliable energy supply. The transition of the energy sectors towards increasing integration of renewable energy sources demands integration of energy systems, increased international connections and precise control of energy production and consumption. The development of interconnection between subsectors and cross boarders is an objective targeting an efficient use of fluctuating energy sources. Therefore both legislative and governance measures are being implemented in order to promote further integration internationally and intra sectorially. The international dimension is vital to a small country like Denmark, linking Scandinavia to the continent, and the North Sea to the Baltic Sea. The geographic situation gives Denmark extraordinary conditions for import and export of energy, whether it is fossil fuels, biomass transported by sea or electricity. Denmark supports further international cooperation in regards to energy supply and further development of an open market for electricity and natural gas.

30

Conventional power plants are being decommissioned or transformed into bio-fueled plants, and diversification in both production and consumption is being improved with an impact on both the natural gas and electricity systems. This development demands further integration between subsectors and direct control over local plants in order to balance the integrated systems. Therefore,

cybersecurity forms a priority in the energy sectors. Denmark recognises the importance of cybersecurity in the energy sector as a strategic important issue to address in the coming years.

Within both the natural gas sector and the electricity sector Denmark has the objective to further develop the international cooperation on security of supply by increasing physical interconnections and ensuring common understanding on risks to supply. The Danish electricity system is undergoing a development comprising an increasing amount of renewable energy production from mainly intermittent wind and solar power sources, together with a decreasing central and decentral power plant production capacity. This leads to an increasing dependency on interconnectors to the neighbouring countries. The potential security issues are being mitigated through regional cooperation in the Nordic region on authority and TSO level. This cooperation aims at enhancing the operational cooperation in case of crises by common exercising and knowledge sharing .

The Minister of Energy, Utilities and Climate has the overall responsibility for the security of supply of electricity and natural gas in Denmark. The Minister also determines the level of security of supply of electricity according to a law that entered into force in 2018.The technical monitoring and maintenance of the security of supply is ensured by the national TSO (Energinet). The TSO is responsible for ensuring the presence of sufficient production or import and maintaining security of supply together with the efficient utilization of the coherent electricity supply system and natural gas system. The TSO is the

custodian for the national emergency plans within both the electricity and natural gas sectors. These plans are coherent with the respective EU-Regulation

2017/1938 concerning measures to safeguard security of gas supply and sectorspecific EU regulation.

In regards to the electricity security of supply, existing and planned

interconnectors contribute to an increased security of supply in Denmark. An expansion of the electricity market to include greater overall consumption as well as a wider portfolio of production technologies will ensure an increased security of supply across borders.

Within the oil sector, Denmark is dependent on free movement of shipping in the North Sea and the Baltic Sea and the international market. It is an objective for

31

Denmark to ensure international cooperation within this field. Therefore Denmark is participating in international cooperation within the EU and the IEA with regards to ensure sufficient oil-stocks

(ii) National objectives with regard to increasing: the diversification of energy sources and supply from third countries for the purpose of increasing the resilience of regional and national energy systems

Denmark does not have national objectives for reducing the energy import dependency of third countries, since these dependencies are limited due to the diversification of energy sources and the production of oil and gas within Denmark. The dependency on import of coal is decreasing as a result of integration of more renewable energy. However, the transition towards

integration of renewables leads to an increasing dependency on a well-functioning market for electricity across the Nordic region. In regards to natural gas, Denmark has been a net exporter of natural gas since the introduction of natural gas in 1984. The importance of natural gas in the Danish energy supply has been decreasing in the last decade. This development is expected to continue in the following years as natural gas is expected to cover respectively about 15 % in 2023, 14 % in 2023 and 12 % in 2030 of the total Danish energy mix. The figures include biogas injected into the gas pipeline system.

Historically, Denmark has been dependent on third countries like China, India, the United States, Australia, Indonesia, Russia and South Africa in regards to coal. The power plants have been able to produce full load substituting coal with oil, making the dependency of coal less critical. In recent years the political decision on moving towards an energy system with an increasing part of renewable energy has made the energy system increasingly independent of coal.

(iii) Where applicable, national objectives with regard to reducing energy import dependency from third countries, for the purpose of increasing the resilience of regional and national energy systems

Denmark currently does not have such objectives.

(iv) National objectives with regard to increasing the flexibility of the national energy system, in particular by means of deploying domestic energy sources, demand response and energy storage

Denmark currently does not have such objectives. However, the Danish

Government has announced that by 2030 Denmark can have more than 1 million green cars, a new gas strategy and a roadmap for smart energy, as well as

32

significant increase of heat pumps in heating sectors of Denmark. This is expected to provide a basis for increasing flexibility through increased demand response and energy storages.

2.4 Dimension Internal energy market