Heatwave drives Danish electricity prices to record June highs

Danish electricity prices have surged to their highest June levels since 2022, with the average spot price expected to exceed 5 kroner per kilowatt-hour between 20:00 and 22:00 on Tuesday, energy provider OK reports.

Brian Vad Mathiesen, professor of energy planning at Aalborg University, attributes the spike to climate change driving extreme heat and heatwaves, which place the entire system under strain. Speaking on DR’s P1 Orientering, he warned such days will become more frequent.

Solar power is mitigating the impact, preventing midday prices from reaching the same extremes seen in the evening. Without solar, Mathiesen said, gas, coal, and imports would set prices for more of the day, making the entire 24-hour period more expensive.

The professor noted that while these events will persist, their economic impact on the electricity market should diminish within five to ten years as Denmark improves its technical ability to manage high temperatures. Evening hours are particularly affected because gas often sets the price during that period, especially when water levels, wind, and nuclear power are low.

Mathiesen pointed to flexible consumption, expanded renewable energy, and increased battery storage as key solutions to reduce reliance on gas-dominated hours. In the meantime, he advised Danes to continue monitoring electricity prices, a habit many adopted during the coronavirus pandemic when prices also rose.

Denmark’s own temperatures are not the primary driver of the price surge. A heatwave sweeping across Europe has increased electricity demand, particularly for cooling, in countries to the south. With strong grid connections to Germany, the Netherlands, and the UK, Danish prices are heavily influenced by conditions further south, Mathiesen explained. He added that gas prices are currently elevated due to the closure of the Strait of Hormuz.