Company types  

By Troels Werner Christensen, 22. August 2008

The Danish electrical sector currently includes the following types of companies:

Grid companies

Monopoly. These are responsible for the physical supply of electricity to the end users – the customers. They manage, maintain and extend the distribution grid and must arrange for the measurement and recording of electricity consumption. The grid companies are also under an obligation to provide energy counselling with the aim of bringing down electricity consumption.

Transmission companies

Monopoly. Manage the high-tension grid from 60 kV up (However in some areas, the 60 kV system falls under the grid company). There are two types of transmission company. A number of regional companies, typically managing the 150 kV grid and in some cases the 60 kV grid in a region, plus a national company, Energinet.dk, which runs the higher-level 400 kV high-tension grid and electrical connections to foreign countries. The regional companies are: FynsNet 150 kV A/S, KE Transmission A/S, N1 A/S, Midtjyske Net A/S, Sydøstjyske Net A/S, Syd Net A/S, DONG Energy, NV Net amba, SEAS Transmission A/S, Vestjyske Net 150 kV A/S, Vestjyske Net 60 kV A/S and ØSTKRAFT Net A/S.

System responsibility

Monopoly company. This must safeguard the overall balance and quality of the electrical systems, i.e. ensuring that there is sufficient electricity at all times compared to consumption. In addition it has the task of monitoring the functioning of the electricity market, overall planning functions and research and development. Energinet.dk organises the transmission grids on payment to their owners.

Production companies

Companies subject to competition which manage the Danish power stations and combined heat and power stations.
The companies responsible for the big central power stations which are mutually subject to free competition with foreign companies.
The smaller combined heat and power stations also operate on the electricity market but enjoy subsidies securing them a minimum price limit. The same applies to wind power generators, which are also guaranteed sale of their production.

Electricity trading companies

Subject to competition. These are the market’s wholesalers and buy power from domestic and foreign producers and resell it to customers. The trading companies either buy their power directly from the producer or via the electricity exchange, Nord Pool. Both the “old” electricity companies and, for example, the oil and gas companies have established electricity trading companies. Certain electricity trading companies also have a so-called supply obligation. This means that within a given geographical area they must supply customers who do not wish to shop around on the electricity market. This is done at market prices, but the companies must notify their prices to the authorities for approval.

Other company types

Several electricity companies have set up other types of company, typically in order to deal with so-called “coordinated activity” in competition with others. These are tasks which are not necessarily related to electricity supply, but which allow the companies to exploit their expertise in a commercial setting. Examples:

  • Optical fibre companies
  • Advice giving
  • Servicing and contracting activity
  • Meter reading and billing for others (e.g. district heating companies and water companies)

Facts

Fakta

The energy sector is a large and complex sector which is changing all the time. After the electricity reforms of 1999 a completely new company structure has been developed in the Danish electricity sector, with a clear separation between companies with monopoly tasks and companies in open competition on the electricity market.

The law requires a clear division between companies with monopoly tasks (e.g. the operation of electricity grids) and those with competitive activities (e.g. electricity production and trading). This has led to the original electricity distribution companies setting up a form of group structure. Typically the original company will form a holding company with subsidiaries handling the various functions.

Contact

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  • Economist, M.Sc. (Economics)
  • Henrik Hornum
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  • Lisbeth Petersson
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