Roles and responsibilities
What are the roles in the Danish electricity market? Learn about the individual market participants' basic tasks in the market.
Energinet is Denmark's TSO, i.e. the enterprise responsible for the operation of the transmission grid and the electricity system in Denmark. Energinet's core service is security of supply; in other words, ensuring that the Danish population is supplied with electricity now and in the future. Practically, this is done by ensuring around-the-clock, all-year balance between consumption and generation in the electricity system.
Energinet is also tasked with setting the framework for a well-functioning electricity market that ensures fair prices for both consumers and producers and promotes climate-friendly energy solutions.
On the power exchanges, the price of electricity is fixed by the hour based on supply and demand. This market model ensures that, while taking congestion in the transmission grid into consideration, electricity is generated by the cheapest production unit(s) suitable to match the buyers' bids.
Balance-responsible parties, or BRPs, buy and sell electricity on power exchanges on behalf of electricity suppliers and facility owners. Every day, BRPs submit plans to Energinet on the volume of electricity expected to be generated and consumed in the next 24 hours by the producers and customers that the respective BRP is balance-responsible party for.
BRPs are financially accountable to Energinet for imbalances between expected and actual generation and consumption on the day of operation. Actually, it is impossible to predict a day's generation and consumption a hundred per cent accurately. Any imbalance will be balanced out by Energinet, and BRPs are then invoiced the price of the respective imbalances that they caused.
Facility owners sell electricity generated at the facility to electricity suppliers. In Denmark, there are around 100,000 large- and small-scale electricity-generating facilities. Approx. 60 per cent of electricity generation comes from sun, wind, biogas, and water. The remaining 40 per cent is generated at central power stations.
The grid companies own the electricity system between the transmission grid and the consumer. Grid companies have the sole right to transport electricity in their geographically defined grid areas. The grid companies must measure consumption and generation of electricity in their grid area. The task of collecting, validating, sending, and receiving metering data can be delegated to independent metering point administrators.
The grid companies are also responsible for payment of electricity taxes to SKAT (central Danish tax administration) on the amount of electricity consumed in the respective grid company's area.
Electricity suppliers must pay the grid companies for transporting electricity to the customers. The Danish Utility Regulator regulates the grid companies in order to ensure that the prices they charge are proportionate to the costs associated with operation of the electricity system.
Operation of the electricity system comprises tasks such as connection of new customers, specification of electricity consumption, as well as development and maintenance of physical installations. Grid companies also handle a number of ad hoc tasks, such as refitting damaged live cables and installing live cables at new facilities.
Electricity suppliers are the customers' primary contact in the electricity system. Suppliers buy electricity from balance-responsible parties on power exchanges or directly from facility owners and sell it to customers. Electricity suppliers must pay the grid companies for transporting electricity to the customers and for sending meter data for settlement purposes.
Electricity suppliers are, among other things, responsible for:
- Correct customer information in DataHub (electricity suppliers, for example, register change of customers and changes to customer relations at metering points)
- Payment collection for both consumption, duties, tariffs, and transport from the customer on one single invoice. Grid companies and Energinet will invoice the electricity supplier for fees and use of grid.
- Payment of consumption in the metering points registered to the respective electricity suppliers in DataHub.
Electricity suppliers must, against payment, supply household customers with electricity.
Energinet has four annual random inspections with electricity suppliers to check that agreements have been made for any recorded supplier changes.
Metering point administrator
Metering point administrators are tasked with collecting, validating, and submitting meter data to DataHub on behalf of grid companies and can retrieve meter data and calculated time series from DataHub. The grid company is always responsible for the metering point administrator.
Third parties, e.g. electricity agents and energy consultants, will find the best offers for customers by constantly monitoring the different products on the market and inviting quotations from the country's electricity suppliers. With an electronic power of attorney, customers can grant electricity agents and energy consultants access to their data in DataHub.
The customer buys electricity from the electricity supplier and also pays all duties and taxes, subscriptions, tariffs, etc. to the electricity supplier in addition to paying for electricity consumed. The customer must actively choose an electricity supplier to get a supply of electricity. The customer contacts the electricity supplier, if there are any problems or questions.