Green electricity is electricity produced from renewable energy sources such as wind, solar, hydropower, and biomass. For both businesses and private individuals, it is often a matter of understanding what a green electricity agreement actually means in practice and how its "greenness" is documented. It is particularly important to know the difference between the electricity in the grid (which is mixed) and the documentation that comes with a green electricity choice.
This article provides a comprehensive overview of the definition of green electricity, how documentation works in Denmark, typical misunderstandings, and what the expansion plans mean in practice. The aim is to enable you to ask the right questions about your electricity contract and make a choice that suits your needs for transparency and reporting.
Definition: Green electricity is electricity produced from renewable energy sources. These include wind, solar, hydroelectric, and biomass. The sources are naturally replenishable and do not emit the harmful greenhouse gases that fossil fuels do.
For you as consumers—whether you purchase electricity as a household or a business—green electricity therefore becomes a question of which energy sources are "behind" the electricity that is produced and fed into the grid, and how this connection is documented.
It can be helpful to think in two ways: 1) production (where the electricity comes from), and 2) documentation (how your consumption is "matched" with renewable production). The two things are related, but they are not the same.
In Denmark, green energy from solar and wind power will cover 63 percent of Danish electricity consumption in 2024. The most important renewable sources are wind energy from wind turbines, solar energy from solar cells, and hydropower.
This shows that renewable energy already accounts for a large proportion of electricity consumption. However, this does not mean that all electricity is automatically green, or that customers can "specify" exactly what type of electricity they are currently receiving. In a shared electricity grid, it is therefore important to understand how consumption is calculated and what documentation accompanies your choice of electricity contract.
Mixed electricity grid: Denmark has a single electricity grid, where electricity from all sources is mixed together before being distributed to consumers. Therefore, no electricity companies can guarantee that the electricity coming out of your socket physically comes from renewable energy sources—even if you have a green electricity contract.
This is a key point for both private individuals and businesses: a green electricity agreement is not about making the "wire" to your home green. It is about how your consumption is documented on an annual basis.
If you want to assess whether an electricity contract meets your expectations, it is therefore most useful to ask: What type of documentation is provided? What does it cover specifically? And how is it checked? These answers will determine what you can actually say about your electricity consumption.
Guarantees of origin: To guarantee green electricity in Denmark, certificates of origin (guarantees of origin) are used. The certificates are issued by Energinet, which owns and operates the Danish electricity grid.
When a producer generates electricity from renewable sources, they receive a certificate for each unit produced. Electricity companies then purchase certificates corresponding to their customers' electricity consumption.
For you, this means that "green electricity" in an electricity contract should typically be understood as a documented link between your consumption and a corresponding amount of renewable production. This provides a framework for what you can report and document—but it does not change the fact that the physical electricity in the grid is mixed.
When you choose a green electricity contract, the electricity company purchases certificates of origin corresponding to your annual electricity consumption. For example, if a household uses 4,000 kWh per year, there must be certificates covering 4,000 kWh of green electricity in the grid.
If you want to make this specific in your own assessment, you can use your calculated consumption (typically in kWh on your annual statement) as a starting point and ensure that the agreement documentation is described at the same level: What is covered, and how is it calculated? The more precisely the context is described, the easier it is to use in internal reporting and external communication.
Year-end check: At the end of the year, an auditor ensures that the certificates purchased correspond to the amount of green electricity sold.
As a customer, it is a good rule of thumb to read the terms and conditions and product description, focusing on whether the documentation is clearly defined (e.g., whether it covers your entire consumption and whether a control process is described). This makes it easier to avoid misunderstandings later on.
There are two certification labels in Denmark that are used to clarify the content and documentation of green electricity agreements. They can be used as a quick shortcut to understanding what the agreement promises and what type of documentation is included:
For companies, the label can be relevant because it makes it easier to align expectations between purchasing, operations, and reporting: What exactly can be documented, and on what basis? For private individuals, the label makes it more transparent to compare products, because "green" can cover different types of documentation.
Whether you are a business or a household, it is a good idea to link the label to your purpose: Is the choice primarily about documenting renewable energy via certificates, or do you also expect the agreement to include additional measures? Here, one leaf and two leaves are a practical benchmark.
The Danish climate agreement of June 25, 2022 ("A greener and safer Denmark") aims to quadruple total electricity production from solar and onshore wind and establish at least 4 GW of offshore wind by 2030. The agreement also includes initiatives to remove regulatory barriers and shorten approval and permitting processes.
At the same time, the Confederation of Danish Industry points out that electrification in Denmark is progressing too slowly and that Denmark is lagging behind the rest of Europe. The industry recommends at least 1.1 GW of onshore wind power or 3.6 GW of solar cells annually until 2030.
Practical consequence: Expanding green power is not just about more wind turbines and solar cells, but also about the need for further investment in the transmission grid and capacity.
For you as consumers, it may be relevant to translate "expansion" into everyday decisions: When solar and wind power account for a larger share of production, it becomes more valuable to understand your own consumption patterns and documentation. This is especially true if you need to explain internally or externally what your green electricity choices are actually based on.
There is limited specific price data on green electricity in the available information. One source mentions that certain climate projects receive around 3 øre per kWh (approximately 1.5% of the total electricity price) as climate compensation. There are no specific price lists for green electricity from different providers.
If you are evaluating green electricity based on economics, you should therefore focus on what the electricity agreement documents (certificates and any measures behind "two blades") and how it fits your needs for transparency and reporting—rather than expecting a uniform price structure across the market.
A practical approach is to separate "price" and "content": Compare agreements on the elements that are actually described (e.g., certificates and any additional measures), and then use price as one of several criteria. This way, you are not only assessing whether the agreement is cheap or expensive, but also whether it is clear enough for the purpose you have in mind when choosing green electricity.
The biggest pitfall: Believing that you are getting 100% green electricity from your power outlet. In reality, all electricity is mixed in the Danish power grid, and no electricity companies can guarantee that the electricity in your power outlet comes exclusively from renewable sources.
How to think correctly about green electricity: A green electricity agreement is about documentation on an annual basis—i.e., that your consumption is covered by renewable energy via certificates—not about the current electricity supply.
To avoid misunderstandings in practice, it is advisable to be consistent in your own wording: Say that your consumption is "covered by certificates" or "documented with guarantees of origin" when that is what the agreement actually describes. This makes communication more precise and reduces the risk of "green electricity" being understood as a physical property of the electricity coming out of the socket.
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