DENMARK Trends and Developments Contributed by: Henrik Sjørslev, Peter H. Knudsen, Henrik Lund-Koefoed and Levent Kitir, DLA Piper Denmark
Introduction The Danish green energy sector has long been a sym - bol of innovation and climate ambition. With strong political backing and a well-established infrastructure for wind and solar energy, Denmark has positioned itself as a leader in the European green transition. However, in recent years, the sector has faced grow - ing financial challenges. Insolvency and restructuring are no longer peripheral concerns; they are becoming central tools in navigating a volatile and increasingly complex energy landscape. These challenges must be understood in the context of broader macroeconomic developments. In Septem - ber 2025, Danmarks Nationalbank (the Central Bank of Denmark) revised its growth forecast for the Danish economy downward, now expecting GDP growth of just 2.0% in both 2025 and 2026 – significantly below earlier projections. Inflation is expected to remain low, but the combination of weaker global trade, higher tariffs and geopolitical tension has created uncertainty for export-oriented and capital-intensive industries. Although interest rates have begun to stabilise, the effects of previous hikes continue to weigh on invest - ment decisions. Financing conditions remain tight, and banks are increasingly cautious in their lending practice. This has direct implications for green energy projects, which often rely on long-term capital com - mitments and stable regulatory frameworks. At the same time, Denmark has seen a decline in the number of bankruptcies, with the bankruptcy of 2,491 active enterprises – a 19% decrease from 2023 and in line with the ten-year average. However, this aggre - gate stability masks sector-specific vulnerabilities. In the energy sector, financial distress is often linked to high production costs, volatile electricity prices and delays in the infrastructure or support mechanisms. In the 2024 version of this Trends and Developments article, the challenges in the green energy sector were briefly highlighted, and it was stated that this might lead to a rise in insolvency matters within certain sectors. Shortly thereafter, this turned out to be very much the case. Major Nordic firms have commenced in-court insolvency proceedings during the last 12
months, such as Northvolt, Better Energy and Green Hydrogen Systems. Therefore, this year’s article takes a deeper dive into how the macroeconomic and legal developments are increasingly shaping the financial and operational conditions of the green energy sector, and it also takes a look at the impact of market volatility, investor hesitation and regulatory complexity on the viability of renewable energy firms. How insolvency law – which is traditionally reactive – can evolve into a proactive instrument for managing transition risk and supporting sustainable restructuring in a sector critical to Den - mark’s high climate ambitions is also spotlighted. Economic Stress and Market Volatility The Danish energy sector is under massive pressure. Rising interest rates, inflation and supply chain dis - ruptions in previous years have made financing more expensive and less predictable. Investor appetite seems to have cooled, and banks are more cautious. In the first half of 2024, Denmark experienced a whop - ping 315 hours of negative electricity prices, a record high that reflects the growing imbalance between green energy production and consumption. While Denmark produced 13 TWh of green electric - ity in the first half of the year – a 13% increase from 2023 – electrification has not kept pace. Fossil fuels are still used during peak periods, and the CO₂ share in electricity rose by 7%. This imbalance is partly due to slower-than-expected development of indirect electrification technologies, such as green hydrogen and e-fuels, which were expected to drive additional electricity demand. The delay has reduced the value of new capacity additions and contributed to market volatility. The rapid expansion of solar photovoltaic (PV) pro - duction – driven by subsidy regimes in Europe – has intensified production even during periods of negative prices, leading to curtailment and price instability. This has led to a reversal in electricity price patterns: once highest at midday, prices are now lowest when solar output peaks – and the same applies to wind on windy days. As a result, south-facing solar PV parks
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