DONG Energy wins supply obligation for seven new areas

As of 1 October, DONG Energy has won the supply obligation for electricity in seven new areas throughout Denmark. As just published, this was the result of the fourth tender round concerning the supply obligation.

Facts about the supply obligation

The supply obligation stipulates that the energy companies have a duty to supply electricity to the electricity consumers who do not already have a supply agreement.

For example, this could be newcomers, customers where the supplier has disconnected the supply because the customer is in arrears and customers whose electricity supplier has gone bankrupt. The price of electricity under the supply obligation corresponds to the market price plus an additional fee which will be determined by the Danish Energy Regulatory Authority, and a so-called profit margin fee which varies from supplier to supplier. 

In March 2013, the first bidding round was completed with 46 bids for 24 licences, primarily in Jutland and on Zealand. Three tender rounds have taken place, and the fourth and latest bidding round is the last one. All the licences will be in force until 1 October 2015 when the previous Danish Supply Obligation Act will be replaced by a new act.

Louise Hahn, Vice President in Sales B2C DK, said:

"We're pleased to be among the cheapest electricity suppliers in Denmark and we welcome the new customers."

A total of 19 companies participated in the tender round for the 26 areas, and DONG Energy won the second-highest number of areas, surpassed only by the Danish electricity supplier Energi Nord.

DONG Energy has won the supply obligation in the entire southern and western part of Zealand as well as on Lolland Falster, previously SEAS-NVE areas, in Hjerting and on the island of Ærø, previously SEE areas, in Rolfsted, Brenderup and Pårup, previously Energi Fyn and VOS (the power supply company for the area surrounding the Danish city Vejle) areas.

Hahn continued:

"We're pleased to have won the seven areas and we look forward to welcoming the new customers. We've offered reasonable and competitive prices. And we're looking forward to offering electricity to customers in areas where we haven't had any activities previously."

The result of the tender round shows that DONG Energy is among the most competitive energy companies in Denmark in the supply obligation area.
However, DONG Energy has lost the supply obligation in the Greater Copenhagen Area and Northern Zealand which have traditionally been our area.

Hahn continued:

"The Competition Act prevents us from offering lower prices than the prices we've offered in our own area. If possible, we would have offered just as low prices in our own area as we have in the other areas, and at this price we would also have won our own area, but the Competition Act favours outsiders."

DONG Energy has participated in the tender with an average price of 0.98 øre in all other areas except our own and has only been surpassed by the Danish electricity supplier Energi Nord's offer of 0.00 øre. The difference between Energi Nord's price and DONG Energy's price corresponds to approximately DKK 30.00 per year for an average Danish household.

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Morten Kidal +45 9955 9583