Sector Overview • Denmark’S High Voltage Grid Comprises 7,348 Km of Lines and About 37,638 MVA of Capacity

Denmark Sector overview • Denmark’s high voltage grid comprises 7,348 km of lines and about 37,638 MVA of capacity. The grid consists of 132 kV– 400 kV AC lines and 250 kV–500 kV DC lines. • Denmark’s transmission network is divided into two parts—Denmark West and Denmark East. Existing network The two parts have been connected by the Great Belt Cable since 2010. • The Danish transmission system is interconnected with the transmission systems of Germany, Sweden and Norway via DC lines.

• Energinet.dk, an independent state-owned company established in 2005 after the merger of the three power grid operators in the country, owns and operates Denmark’s high voltage electricity grid. TSO • In mid-2012, Energinet.dk took over the ownership of the entire Danish power transmission grid by acquiring the country’s ten 132 kV and 150 kV regional transmission grids, formerly owned by 41 cooperatives and municipalities.

• The majority of Denmark’s existing transmission grid was constructed in the 1960s and 1970s and is now in need of reinvestments. • The focus is also on transforming the grid to accommodate the large-scale addition of Investment drivers renewable energy, in line with the government’s target of meeting 50 per cent of the country’s energy needs from renewable energy by 2020 and 100 per cent by 2050. • Denmark is also investing in undergrounding power lines for visual enhancement in the electricity grid.

• Energinet.dk is expected to invest over DKKXX billion by 2025 in the transmission sector. Expected investment • A large part of this investment will be spent on the connection of offshore wind farms and on design and installation of underground cables.

Existing laws require Energinet.dk to submit a plan for making significant changes to the national grid. Projects involving investments of over DKK100 million must be approved by the Danish Minister for Energy, Utilities and Climate, while projects requiring less than DKK100 millionmust be approved by the Danish Energy Agency.

©www.globaltransmission.info 1 Denmark Historical capital expenditure trends

• Investment in Denmark’s high voltage grid grew seven-fold from DKKXXX million in 2006 to an estimated DKKXXXX million in 2015. • Investment trends In 2015, DKKXX million was invested in information security. • To improve capex efficiency, Energinet.dk launched several initiatives in 2015, including pooling of purchase orders for projects, standardisation and optimisation of procurement processes.

• Strengthening the domestic grid, connecting offshore wind farms, and setting up high voltage interconnections have been the key focus areas so far. Investment focus • Renovation and modernisation projects formed a very small part of the historical capex.

• Recently commissioned projects include: ‐ Grid connection of the Great Belt Power Link. Key projects ‐ Connection of the Anholt offshore wind farm. commissioned ‐ 400 kV connection between Kassø near Aabenraa and Tjele near Viborg. ‐ 700 MW Skagerrak 4 submarine connection with Norway.

• Energinet.dk has been focusing on improving IT and information security, including installation of a new SCADA system in 2015 to secure the grid against cyber attacks. • Energinet.dk improved its CMMI-scale (Capability Maturity Model Integration) to a level of 3.1 at the end of 2015. • In addition, in 2013, Energinet.dk and 130 power grid and electricity trading companies put into service DataHub , a common data centre that gathers all information pertaining to electricity consumption in one place.

©www.globaltransmission.info 2 Denmark Historical capital expenditure growth

Figure 1: Growth in Denmark's capital expenditure on transmission network (DKK million)

XXX XXX XXX XXX XXX

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F

Table 1: Denmark's capital expenditure on transmission network by type (DKK million)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F

Investment in grid XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Note: F-forecasted capital expenditure Source: Energinet.dk; Global Transmission Research

• Key drivers for future investment include: ‐ Meeting 50 per cent of the country’s energy needs from renewable energy (mostly offshore wind farms) by 2020 and 100 per cent by 2050. Investment drivers ‐ Undergrounding all 132 kV and 150 kV lines and select 400 kV lines. ‐ Ensuring a high level of security of supply of electricity at the lowest possible socio- economic costs.

• An investment of DKKXX billion is envisaged in Denmark’s high voltage grid between 2016 and 2025. Expected investment • Of this, DKKXX billion will be spent on projects underway, DKKXXX million has been envisaged for planned projects and DKKXX billion for future projects. • The company has set a target of increasing the CMMI-scale to 4.0 in 2017.

• Key new projects include: ‐ Connection of offshore wind farms—Horns Rev 3 and Kriegers Flak. ‐ The COBRAcable, a new ±320 kV subsea DC interconnector between Jutland and the Key projects Netherlands. ‐ Expansion of the Jutland–Germany interconnections. ‐ The new 400 kV Viking Link between Denmark and the UK.

• A key element of Denmark’s development policy is the long-term undergrounding of the transmission grid. The plan is to dismantle the country’s entire 132 and 150 kV grid network (3,200 circuit km) and replace it with a new underground network (2,900 km) over the next 20 years. • The plan also entails visually enhancing the 400 kV grid in selected areas. Energinet.dk has launched a development project that will result in the installation of the first long 400 kV AC cable in Denmark.

Table 2: Denmark's planned capital expenditure on transmission network for 2016–25 (DKK million)

132 kV–150 kV 220 kV–400 kV AC and HVDC Total Cable construction and design XXXX XXXX XXXX New stations and transformers XXXX XXXX XXXX Reinvestment/embellishments XXXX XXXX XXXX Dismantling of overhead lines XXXX XXXX XXXX Restoration of cables XXXX XXXX XXXX Total XXXX XXXX XXXX Note:AC – alternating current; HVDC – high voltage direct current. Category-wise break-up of future investment estimated based on Network Plan 2013. Source: Energinet.dk; Global Transmission Research Figure 2: Denmark’s planned transmission capex by Figure 3: Denmark’s planned transmission capex by type voltage for 2016–25 (%) for 2016–25 (%) X% X% XX% Cable construction and design XX% 132 kV–150 kV X% New stations and transformers 220 kV–400 kV Reinvestment/ XX% AC and HVDC embellishments XX% Dismantling of overhead lines

Source: Energinet.dk;Global Transmission Research