Power grid analysis revised: “We are talking about huge investments”

Two years ago, Rambøll published a startling analysis:

It will cost DKK 80 billion over the next 20 years to upgrade the power grid for future production and consumption.

But the consultancy is already forced to adjust that number drastically.

A new forecast from the Danish Energy Agency predicts an explosive increase in consumption, and with it comes a corresponding increase in wind and solar energy, which must be transported over the national power grid.

Preparing the power grid for the task will cost “well over DKK 100 billion” from now until 2040, according to Rambøll’s latest estimate.

The exact figures and the analysis behind them will be published in the near future and have been prepared on Rambøll’s own initiative, says John Ammentorp, the consultancy's country market director.

“These are huge investments that have to be made.”

John Ammentorp emphasizes that he does not envisage the price rising again any time soon.

“We are now at the point where it’s necessary to deliver on ambitions. It probably doesn’t help much to set them higher, as it will probably already be difficult to realise the current ambitions.”

Explosion in green technologies

The revised amount is based on the huge changes that have taken place in the energy sector in the past two years.

The Danish Energy Agency’s new forecast predicts significantly more renewable energy and more consumption from Power-to-X, electric cars, and heat pumps in particular, as well as new policies that set targets for a quadrupling of onshore renewable energy.

Denmark’s power consumption is expected to increase more than fivefold by 2050. This is due to increasing power consumption of, among other things, data centres, electric cars, and heat pumps, but above all Power-to-X facilities. In comparison, power consumption was at a stable level between 2000 to 2018, at around 32 TWh.

Much is still unknown, John Ammentorp explains.

Therefore, this is not the last time the predictions will have to be adjusted.

“One has to constantly keep a finger on the pulse of most effective technologies when expanding. There is so much that can come into play: on the one hand, technologies can become more efficient, but on the other hand, costs can increase.”

John Ammentorp has no doubt that the investments will be worth it.

“The entire power grid will probably pay for itself in terms of social profitability. It’s about delivering on the green transition as cheaply as possible.”

A crucial crossroads

The power grid is already under pressure today.

In several areas, there is no room for more renewable energy, and solar parks must be on standby until the grid is expanded.

In order to realise the ambitions, there is a need for much greater planning on the part of the state, John Ammentorp says.

“The development of the power grid must be driven by ambitions rather than needs. There is a need to expand upfront in areas where a greater need is expected in the long term. Of course, there is a risk of creating a grid that is not used optimally, but it’s much smaller than the risk of not being able to deliver on the green transition.”

Brian Vad Mathiesen, professor of energy systems at Aalborg University, also believes that the entire project depends on a well-thought-out plan.

“We can minimize costs with sensible spatial planning and by planning new, large, flexible consumption and production.”

An example of sensible spatial planning is to place solar panels on large roofs in the cities close to consumption to avoid laying unnecessarily many cables and wires, Brian Vad Mathiesen says.

"If we don’t plan sensibly, we won’t reach our goal in a cost-effective way.”