Denmark's Energy Community Rules vs the EU: What's Different and Why It Matters
How Denmark's energy community framework compares to other EU countries and what it means for community founders.
RED III and what it requires for energy communities
The EU's regulation of energy communities has evolved significantly over the past decade. It all began with the market-oriented Clean Energy Package in 2018-2019, which introduced two concepts: Renewable Energy Communities (REC) in RED II and Citizen Energy Communities (CEC) in the Electricity Market Directive.
In 2023, RED III (Directive 2023/2413) significantly strengthened the rights of renewable energy communities. The key requirements include:
- A clear REC definition: open membership, democratic governance, purpose is environmental, social, or economic community benefits — not profit.
- Right to produce, consume, store, and sell renewable energy — including via power purchase agreements.
- Right to share renewable energy within the community, including via the public grid.
- Non-discriminatory treatment: energy communities must not face disproportionate barriers compared to other market actors.
- Member states must establish an enabling framework for energy communities.
Timeline: RED II (2018) → Electricity Market Directive (2019) → RED III (2023) → Implementation deadline May 2025. Denmark adopted Electricity Supply Act amendments in January 2025.
Denmark's implementation — what's done, what's missing
In January 2025, the Danish Parliament adopted amendments to the Electricity Supply Act (Lov om ændring af lov om elforsyning), providing for the first time a legal basis for energy communities in Denmark. The law defines Citizen Energy Communities (CEC) and creates a framework for collective energy sharing.
Implemented
- ✓
Legal definition of Citizen Energy Communities (CEC)
- ✓
Registration process via the Danish Energy Agency
- ✓
Collective energy sharing behind the meter
- ✓
Open and voluntary membership requirement
- ✓
Democratic governance (one vote per member)
- ✓
Local collective tariff for shared energy costs
Still missing
- ⚠
Full REC definition (Renewable Energy Communities)
- ⚠
Proximity criterion ('located in the proximity')
- ⚠
Peer-to-peer energy sharing via public grid
- ⚠
Dedicated support scheme for energy communities
- ⚠
Simplified permitting procedures
- ⚠
Detailed rules for grid access and tariffs
Comparison: Denmark vs. other EU countries
This table compares energy community rules across five EU countries. Denmark lags behind on several dimensions, but has strong renewable energy capacity to build on.
| Dimension | Denmark | Germany | Netherlands | Belgium | Sweden |
|---|---|---|---|---|---|
| REC definition | Partial. Only CEC defined in law. | Yes. Buergerenergiegesellschaft defined. | Yes. Energiegemeenschap in law. | Yes. Regional legislation (Flanders, Wallonia, Brussels). | Partial. Under development. |
| CEC definition | Yes. Electricity Supply Act 2025. | Yes. EnWG. | Yes. Elektriciteitswet. | Yes. Regional legislation. | Partial. Under development. |
| Tariff structure | Local collective tariff (new). Full grid tariff still applies. | Reduced EEG surcharge. Exemptions for installations <30 kW. | Postcoderoos scheme. Reduced energy tax. | Reduced grid tariff for locally shared energy. | No specific tariff for energy communities. |
| Nearby criterion | Not defined. Major regulatory gap. | 25 km radius from production facility. | Postal districts (postcoderoos). | Varies per region. Flanders: transformer station. | Not defined yet. |
| Permit requirements | Standard building permit + registration. No simplification. | Simplified for installations <750 kW. BImSchG for larger. | SDE++ requires omgevingsvergunning. | Simplified in Flanders for <10 kW. | Standard permitting process. |
| Grid access | Non-discriminatory access via DSO. Full grid tariff. | Guaranteed access. Priority dispatch for renewables. | Grid operator must facilitate sharing. | Facilitation via DSO. Reduced charges. | Standard access. No special rules. |
| Support schemes | Green transition pool. No dedicated EC fund. | EEG feed-in tariff. KfW loans. Municipal grants. | SDE++ scheme. Net metering (salderingsregeling). | Regional grants. Green certificates. | Electricity certificates. Tax reductions for renewables. |
| Implementation status | Early stage. CEC defined Jan 2025. REC pending. | Advanced. 1,000+ active communities. | Advanced. 700+ energy cooperatives. | Advanced. Strong regional frameworks. | Early stage. Similar to Denmark's situation. |
Sources: European Commission, national energy authorities, REScoop.eu. Updated March 2026.
The 'nearby' problem
RED II and RED III require that members of a renewable energy community are 'located in the proximity' of the production facility. But the directive leaves it to member states to define what 'proximity' means. This has created one of the most controversial regulatory gaps in Danish energy policy.
Denmark has not yet defined the proximity criterion. In practice, this means it is unclear how far from a solar installation or wind turbine you can live and still be a member of a renewable energy community. For Citizen Energy Communities (CEC) there is no proximity requirement — but for RECs it is mandatory.
How other countries define proximity
- Germany:25 km radius from the production facility. Clear and simple rule.
- Netherlands:Postal district based (postcoderoos). Members must share postal code with the facility.
- Belgium:Flanders: connected to the same transformer station. Wallonia: same municipality or neighboring municipalities.
- Italy:Connected to the same primary transformer station (cabina primaria).
The choice of proximity definition has major implications. A strict definition (e.g., same transformer station) limits potential in sparsely populated rural municipalities, while a broad definition (e.g., 25 km) provides more flexibility but may dilute the local community aspect.
What's coming next in Danish regulation
Several important regulatory changes are expected for Danish energy communities. The Danish Energy Agency is working to fill the remaining gaps in legislation, and the European Commission is closely monitoring implementation.
2026: Proximity criterion expected to be defined
The Danish Energy Agency has signaled that a definition of 'located in the proximity' is being developed. This is crucial for enabling Renewable Energy Communities (REC) in Denmark.
2026: Full REC implementation
The full transposition of RED III's REC provisions is expected during 2026, including rules for energy sharing via the public grid and simplified permitting.
2027: European Commission review
The European Commission will review member states' implementation of RED III and may initiate infringement proceedings against countries that have not met the requirements.
Ongoing: Grid modernization and tariff reform
Energinet and the Danish distribution companies are working to modernize grid infrastructure to support local energy sharing. Tariff reforms that account for energy communities are also under consideration.
With 5049 MW of installed solar capacity and 7499 MW of wind capacity, Denmark has the physical foundation for energy communities. What is missing is the regulatory framework to harness it.
Frequently Asked Questions
No. Denmark adopted amendments to the Electricity Supply Act in January 2025 that define Citizen Energy Communities (CEC), but still lacks a full implementation of Renewable Energy Communities (REC) as required by RED III. Several key rights, including energy sharing and the proximity criterion, are still awaiting regulation.
A REC (Renewable Energy Community) is defined in RED II/III and focuses on renewable energy production, sharing, and storage with a proximity requirement. A CEC (Citizen Energy Community) is defined in the Electricity Market Directive and covers the broader electricity sector without a proximity requirement. Both require open membership and democratic governance.
RED III (Directive 2023/2413) should have been transposed by May 2025 for most provisions. Denmark has implemented parts via the Electricity Supply Act in January 2025, but full implementation of REC provisions is still pending.
To a limited extent. The Electricity Supply Act amendment allows collective energy sharing behind the meter, but the full peer-to-peer energy sharing via the public grid that RED III prescribes is not yet fully regulated in Denmark.
This is precisely one of the unresolved questions. The EU requires that members of a renewable energy community are 'located in the proximity' of the production facility, but Denmark has not yet defined this concept. Other countries like Germany use a 25 km boundary, while Belgium uses postal districts.
Denmark lags behind countries like Germany, Belgium, and the Netherlands in energy community implementation, despite having 5049 MW of installed solar capacity and 7499 MW of wind capacity. The regulatory framework is still under development, while other countries already have hundreds of active communities.