Denmark: Industrial Energy Prices More than Doubled in H2 2021

Copenhagen – Electricity and natural gas prices have increased significantly for industrial end-users in Denmark, according to the figures released by Statistics Denmark on Wednesday.

Their average electricity bills nearly doubled and natural gas prices almost tripled in the second half of 2021 compared to the annual average in 2020, figures showed.

“With the most recently announced half-yearly prices, the manufacturing industry’s energy expenditure (electricity and gas) more than doubled from 5.7 billion Danish kroner (829.9 million U.S. dollars) in 2020 to 11.7 billion Danish kroner in 2021,” the authority said in a statement.

However, it noted that the rise in energy prices may be even greater because additional increases due to the ongoing Russia-Ukraine conflict are not included in the calculations of the overall impact on industrial costs.

The plastics, glass and concrete industries are the most energy-intensive of all of Denmark’s manufacturing industries, accounting for 33% of the country’s total energy consumption.

The food, beverage and tobacco industries consume 31%, and the chemical and metal industries account for nearly 10% and 8%, respectively. Economists say that energy prices have risen due to an “unfortunate combination” of economic expansion and bottlenecks in energy supply.

“On top of the reopening of the economies last year, global demand for energy has risen sharply but supply has not been able to keep up,” Kristian Skriver, senior economist at Dansk Erhverv (Danish Chamber of Commerce), said as quoted by Danish news agency Ritzau.

Skriver also predicted that energy prices would continue to increase for industrial end-users in 2022. “Gas supplies from Russia continued to decline in 2022, driving gas prices even higher, and the conflict in Ukraine also pushed up prices,” the economist noted.