Denmark just ranked who gets the grid
Denmark has stopped connecting people to the grid in the order they asked. The government’s reason for putting data centres last says more about what a connection is worth than any market report.
On 1 October, Denmark’s parliament voted to stop handing out grid connections in the order people asked for them, and the law took effect on 12 October.
Energinet and the local grid companies now sort new requests into four categories. First come households, small businesses, normal growth for existing customers, and critical functions such as defence, healthcare and emergency services. Electrification and renewables come second, storage third. Last are certain large energy consumers, which in practice means data centres, unless they serve a critical public function. Requests in the bottom two categories can be refused outright when no capacity is expected in the foreseeable future.
Denmark tried a pause first. In March, Energinet stopped signing new connection agreements and said about 60 GW of new consumption was queuing across the transmission and distribution grids. The country’s peak demand is roughly 7 GW. So the queue was about eight times the size of the system it wanted to plug into. Projects that already had a signed agreement were left alone. Everyone else waited.
I think the decision holds up. When the line is that long, first come, first served stops being neutral and turns into a race to file. Someone has to choose, and I’d rather a parliament did it in the open than leave it to timestamps. Putting homes and hospitals ahead of a large private load isn’t a hard call. The sector’s trade body in Denmark worried about predictability when the plan came out in June, and that’s a fair objection: long-term investment needs rules that don’t move under it.
What I find most telling is the government’s reasoning. Data centres go last because they’re “typically not geographically bound,” in the words of the official fact sheet. Read that as an investor. The state is saying the building can go anywhere. The connection can’t. That’s the argument of my first piece on this site, now written into Danish law.
It also makes me sharpen something I wrote there. I said a queue position gets treated like paperwork when it’s actually the scarce thing. Denmark shows where that stops. A place in line is only worth the rules that rank it, and those rules just changed by vote. A signed connection agreement is a different asset. In March, it was the one thing the pause didn’t touch.
The detail I like most is smaller. Inside categories two to four, projects that put less strain on the grid can move ahead of others in the same category. A big consumer that can shift its load to when the grid has room gets ahead of one that can’t. Denmark is paying for flexibility in queue position.
And no, the Nordics aren’t one market. Finland has a draft bill of its own that would also drop first come, first served and rank data centres partly by size. Its grid operator, Fingrid, backed it on 9 October and said it would steer large projects toward areas where capacity is easier to get. Two neighbours, two rulebooks, both written this year. Which side of the border a project sits on decides which rulebook it gets.
One of the parties behind the Danish law, the Liberals, said the model should stay an emergency tool and not become the new normal. I’d be surprised if it stays that way. The law doesn’t add a megawatt of capacity, and the minister has said as much: it helps Denmark use what it already has. Until more grid gets built, someone will keep choosing. The projects that turn up with flexibility, or with an agreement already signed, are the ones I’d expect to get built.