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ENERGY

Danish consumers paid ’60 million kroner too much’ for energy

Around 600 companies who transport energy in Denmark have not been sufficiently checked for correct pricing, according to the Danish state auditor.

Danish consumers paid '60 million kroner too much' for energy
Gammel eltavle i hus fra trediverne - Radiatortermostater og andre installationer i hjemmet, Randers onsdag den 11. januar 2023.. (Foto: Bo Amstrup/Ritzau Scanpix)

Energy consumers in Denmark paid too much for the transport element of their energy bills over a number of years, state auditor Statsrevisorerne has concluded according to a report by broadcaster DR.

In a new report for Rigsrevisionen, Denmark’s national audit agency, the auditors criticise checks of 600 Danish energy companies undertaken by another agency, Forsyningstilsynet (Danish Utility Regulator).

The mandate of the utility regulator is to protect consumer interest in the utility sector, including by checking price levels of energy companies that have local monopolies on energy transportation to homes and businesses.

Regulation by Forsyningstilsynet between 2018 and 2021 resulted in companies being told to reduce their prices by a total of 60 million kroner, according to DR.

But the work was not rigorous enough according to the state auditors, which have concluded that it is “probable” that not all rule breaches were discovered and that therefore many cases in which consumers overpaid went undetected.

“The state auditors find it very unsatisfactory that a number of consumers have paid too much for transport of utilities and that there is a risk that this applies for several consumers for electricity, gas and heating alike,” they state in the criticism.

The regulator failed to strategically identify companies where the risk of rule breaches was greatest and to thereby focus scrutiny on those companies, according to the auditor.

That includes a lack of checks of heating transportation companies in particular, DR writes.

The chair of the state auditors, Conservative MP Mette Abildgaard, called the conclusions “very worthy of criticism”.

“This affects many Danish families which are fighting to pay their heating and electricity bills right now, and those bills could have been lower if the Danish Utility Regulator has conducted sufficient checks,” she said in a comment to DR.

“The Utility Regulator is independent but the minister [utilities minister Lars Aargaard, ed.] can therefore open a dialogue with the regulator – and law changes could be considered. At the state auditors we will have a meeting with the National Audit Agency where they will tell us how they will prepare their own checks,” Abildgaard said.

The minister is yet to comment on the issue, DR writes.

A total of 76 inspections were conducted by the Utility Regulator between 2018 and 2021, resulting in 34 irregularities being detected. That resulted in companies being ordered to refund customers on 22 occasions, DR reports. This is where the figure of 61 million kroner comes from – it is the amount that has already been paid back or ordered to be paid back by companies.

As such, the state auditors suspect Danish consumers may have overpaid in substantially more cases than the ones detected.

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ENERGY

Danish electricity company announces ‘record negative prices’ after sunny May

A high number of sunny days in May gave Danish energy company Norlys a record number of hours in which its energy prices were negative, the company said on Monday.

Danish electricity company announces 'record negative prices' after sunny May

Last month saw a total of 75 and 59 hours of ‘negative’ electricity prices in the western and eastern halves of Denmark respectively, Norlys said in a press release.

Unfortunately, a ‘negative’ price doesn’t mean you will be paid for switching the lights on, because taxes and transport costs must still be added to the base price.

Specifically, the total price paid by customers can include (in addition to the base rate) state tariffs, subscriptions, one-off charges, VAT and payments to the local energy grid.

Tariffs, like the cost of raw electricity, can also fluctuate from hour to hour. This depends on the tariff model used by individual companies.

But lower electricity prices can be taken advantage of by setting timers on thirsty appliances like dishwashers and tumble dryers and running them at these times. This can include off-peak times of the day when there is less demand for power, as well as fluctuations related to production.

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The total of 134 hours across Denmark in which customers receive a discount due to the negative ‘raw’ energy price is a record for a single month, Norlys said.

“We know that many of our customers follow electricity prices closely and the trend in May also underlines that there is a very good reason for this,” Norlys director for energy sales Mads Brøgger said in the statement.

“It’s good for your wallet and the green transition alike if you can plan your consumption for the hours in which there is a lot of sun and wind, making the electricity price low,” he said.

READ ALSO: How an app function can help cut your Danish electricity bill

May’s high frequency of negative base electricity rates can be attributed to the pleasant spring weather, which provided both wind and sun to the energy system in Denmark.

Meanwhile, Denmark’s electricity infrastructure has become more closely connected to other parts of Europe, notably Germany and The Netherlands. Both countries have increased their solar power capacity in recent years.

“It benefits us to have many sunshine hours, as was the case in May. Meanwhile, energy consumption was low in May because it was warm enough not to need electricity for heating, but not hot enough to need it for cooling. So there was a sweet spot in many ways,” Brøgger said.

The trend of low electricity prices has so far continued into June, with negative base rates occurring on Sunday for a number of hours in both the eastern and western parts of the country.

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