Today, the Danish DSOs are required to obtain a certain amount of annual energy savings mainly from households and companies. This governmental initiative is referred to as the Danish energy savings obligation. It is currently being considered, whether the obligation regarding electricity suppliers should be moved from the DSOs to the trading companies. As input for these considerations, Copenhagen Economics have conducted an analysis estimating the economic potential of moving the obligation.

Our analysis shows that a static annual cost savings potential of DKK 100 to 220 m can be reached by moving the obligation to the trading companies. The cost savings arise from lower prices (subsidies) to realise energy saving investments and lower administration costs related to the efforts of identifying, monitoring and quality assuring energy savings. However, this potential does not take into account that both the market structure and the needed compliance system will change when moving the obligation. Depending on which compliance system is put in place and how the resulting market structure turns out, we find a dynamic potential of DKK -20 to 345 m. The wide range reflects both the importance and the uncertainty of the resulting market structure and compliance system.

Learn more about the study
For further information, please contact Martin Bo Westh Hansen