The document summarizes Denmark's transformation of its retail electricity market. It implemented a central data hub in 2013 to ensure equal access to market data and reduce supplier switching costs. In 2016, it introduced a supplier-centric model where suppliers have direct customer contact. This stimulated innovation and increased switching rates. New technologies and market players are disrupting the traditional value chain and creating opportunities for new business models and products that link wholesale and retail markets and leverage consumer flexibility.

1. Transforming the Danish retail market
Søren Dupont Kristensen, Vice President, Energinet.dk
Electricity Market Day 2016

2. About Energinet.dk

3. The danish retail market transformation
In 2009 the Danish TSO, Energinet.dk,
received an assignment from the Danish
government, to develop a datahub for the
danish retail market.
But we are not the only ones…
Datahubs are introduced to all Nordic
countries between 2013-2020.
Strong Nordic cooperation ensures coherent
retail market development towards common
goals and objectives.

4. Nordic retail markets – guiding principles
A larger market to support competition and innovation
A regional harmonised retail market with low entry barriers will reflect real costs of
energy and support innovation of new products and services for the consumers.
Easy and equal access to data to support transparent markets
Easy and equal access to data as a basis for a transparent retail market in which
consumers can make informed choices, and where suppliers and third parties can
develop new products and services.
Linking wholesale and retail market to support security of supply
Enabling increased demand response and consumer flexibility to support cost-
effective integration of new-renewable energy sources.

5. • 3.3 mio. Consumers
• Full liberalisation in 2003
• Central data management
model in 2013
• Supplier Centric Market design
in 2016
• Smart meter deployment (1,8
mio. in 2016 – all consumers in
2020)
The Danish retail market reform -
acceleration of a liberalised retail market
Consumer
DataHub
Supplier
Centric Model
Non-
regulated
prices
Hourly
settlement of
small
consumers
Increased
transparency
(elpris.dk)
Deployment
of smart
meters
2016
2013
2016
2016
2016
2020

6. DataHub - central data management
Ensure a level playing field for all market parties/suppliers through:
• Standardized processes for registering and distribution of market data
• Reduced entry barriers for new suppliers
• One point of entry for changes of supplier
Go-live: March 2013

7. 5. Datahub is "counterpart"
for supplier changes and
move in/out – faster, more
efficient
7. International
integration
8. Reduced industry
costs
Ref: Elhub kostanalyse
1. Market neutrality – equal
treatmant - fair competition
2. Single source for all metering
values and responsible for
distribution
6. Aggregator for all grid
areas – input to balance
settlement
3. High quality and efficient
distribution of metering data
(common QA standard and
benchmarking)
4. Market development through
one interface
(Datahub towards Suppliers)
9. Better access to data for
energy services (3rd
parties and ESCO's)
10. Secures privacy and data
protection
Datahub – 10 value propositions
Data
hub

8. Supplier centric – new consumer
oriented market design
Stimulate innovation through a consumer oriented market design
where:
 Electricity suppliers get 100% customer contact
 Distribution System Operators become suppliers of wholesale services
(wholesale model)
 Consumers receive one bill
Go-live as we speak!

9. Key succes factors
Critical elements for success
Political and regulatory
mandate
Clear roles and
responsibilities
Strong cooperation and
coordination between TSO
and market parties
Non-discriminatory
market access
Incentives for
consumers to act
More (and new)
products and
services
Consumer
convenience
Preconditions

10. Changing market shares for households
Herfindahl-Hirschman index on a national level 2013
Source: Konkurrence om detailkøb af electricitet, Copenhage Economics
and Dansk Energi
HHI as a weighted average per grid area 2013-2015
Source: Detalmarkedsrapport, Energinet.dk
0
2000
4000
6000
8000
10000
Profiled consumers
Hourly settled consumers
Market concentration per grid areaMarket concentration on a national level

11. Small increase in supplier swiching
The number of
supplier swiches has
reached a historical
level (7,2%) in 2015.
A further increase is
expected after 1. April
2016.
0.0%
2.0%
4.0%
6.0%
8.0%
2010 2011 2012 2013 2014 2015
Supplier switch, percent of total amount of
consumers
Supplier switching rate
Datahub

12. Market players are finding new ways…
The total number of suppliers
registred in Denmark is 70.
An increasing number of
suppliers are active in the
four largest grid areas 
more product offerings for
consumers 20
25
30
35
40
45
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Number of active suppliers in four large grid areas
Source: Detalmarkedsrapport, Energinet.dk

13. More than just gross margins…
Stimulating
innovation and the
creation of new
offerings is a key
objective
Competition is contributing to more than reducing gross margins
Source: Konkurrence om detailkøb af electricitet, Copenhage Economics and Dansk Energi

14. Composition of energy is changing

15. Linking wholesale and retail markets
Wholesale Market Retail Market
Regional balancing markets
Network Codes (CACM)
Hourly settlementMarket Coupling
Increased price cap in markets
non-regulated
prices
Third party acces to data
Supplier centric
model - driving
innovation
Central Data
Management
Aggregators
Framework for
distributed flexibility
European/regional driven National driven

16. Electricity value chain is changing
Transmission DistributionProduction Sales
Energy products &
services

17. What are the new value propositions?

18. Consumer flexibility
- Enable clear price signals to consumers and industries
Solution selling
through
financial
products
Financial
products
+
Energy savings
Energy
together with
hardware and
software
?

19. Market driven digital development and new
technologies are game changers
Ekspotential technologies
influencing the energy sector:
1. Sensors / automation (IoT)
2. Artificial Intelligence
3. Electric vehicles
4. Solar panels
5. Storage of elektricity (batteries)
6. Mobile / Cloud solutions
7. Open Data / Big Data
8. Digitale money (Bitcoins)

20. New business
models
Gap between
wholesale and retail
markets
Weak investment signals
Lacking consumer
flexibility
Electricity Market Disruptive
technologies
GAME CHANGER
Liberalised
markets
GAME CHANGER
New market
parties
GAME CHANGER
Digitalisation
GAME CHANGER
Low prices
New game changers will impact the future
market.. but how?
3rd parties

21. Questions?
Søren Dupont Kristensen
Energinet.dk
sdk@energinet.dk