EurWORK European Observatory of Working Life

Denmark: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

About

Country: 
Denmark
Sector: 
Electrical
Author: 
Nønne Schou Christensen, Carsten Jørgensen
Institution: 
FAOS, University of Copenhagen

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

The electricity sector in Denmark is based on fossil and renewable energy. Nuclear energy plants have never had any ground in Denmark. During the last couple of years the subsidies to the renewable energy have stagnated, but not fallen. The economic crisis has had an effect on employment, but to which degree the crisis alone have affected the sector is difficult to say. Indirectly the crisis has caused renewable energy as policy area to be prioritized by the former Government. The new Government has opened for ambitious plans concerning the energy sources, the climate and the environment, which includes the electricity sector. Furthermore it seems that employment is moving from fossil energy to renewable energy. However, the levels of pay and working time follow the national average.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?

The new Government, consisting of the Social Democrats, the Danish Social-Liberal Party and the Socialist People’s Party that took office after the general election 15 September 2011, has made a proposal about the future energy production in Denmark. This appears from the government platform from October 2011, page 28: http://www.stm.dk/publikationer/Et_Danmark_der_staar_sammen_11/Regeringsgrundlag_okt_2011.pdf). The overall objective is that all of Denmark’s energy supply is covered by renewable energy sources in 2050 and that the electricity supply and heat supply is covered by renewable energy sources in 2035. Also oil-fired boilers and the use of coal in power plants shall be phased out in 2030. Moreover it is the objective of the government to reduce the emission of greenhouse gasses with 40% in 2020 compared to the level in 1990. These objectives will be concretised in a coming climate act.

Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

The Government will replace the use of fossil fuels with renewable energy sources. The types of renewable energy sources are first and foremost biomass, biogas and wind power and to a smaller degree solar power and hydro power. The steps to meet the targets have not yet been presented by the new Government.

Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

In 2008 the then Government decided on new principles about the network in Denmark (Source: http://www.ft.dk/samling/20081/almdel/EPU/Bilag/53/612811.PDF). The main objective is to upgrade the existing transmission net on 400 kV, in that way that this part of the net is laid as power cables underground and the existing power poles are closed down. Since this upgrading of the net is expensive, the Government also decided that the longest distances with power poles will be maintained and improved with newer power poles and power cables in special areas. Furthermore, all new connections in the transmission net (400, 150, and 132 kV) will be power cables underground.

What is the Government stance and what are the ongoing/envisaged actions towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?

The new Government’s stance is in line with their government platform from October 2011. The Government wants to phase out the use of fossil energy and replace it with the use of renewable energy. Nuclear energy is not, and has never been, part of the energy platform in Denmark.

What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossil/renewable energy? Please indicate development since 2005 with reference to generation, distribution, and sale separately.

There are no figures on the employment trends in the different subsectors of the electricity sector. The trade unions indicate that more people work with renewable energy instead of fossil energy compared to earlier times. The social partners are not able to differentiate between generation, distribution and sale.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

Are any subsidies being granted for different types of RES (renewable energy sources) for electricity providers? If yes, please provide briefly the details.

In the energy agreement of 2008 different decisions on subsidies are presented: Increases in the subsidies for the use of biomass on the central power plants, subsidies for biogas power plants and for the production of new windmills. Also subsidies for the development of hydro power and solar power production (In all DKK 25 million per year, € 3.5 million).

Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.

The subsidies for RES have not been cut recently. According to the Confederation of Danish Industries (DI - organisation for erhverslivet) the subsidies have been frozen the last couple of years. However, DI is satisfied with the fact that the subsidies have not been reduced in the light of the economic crisis.

Are there any other forms of support foreseen for promoting electricity generation of RES?

With reference to the energy agreement of 2008 the former Government decided to double the means to research and development in the electricity sector.

Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The energy agreement of 2008 comprises the years 2008-2011. Therefore a new energy agreement will be made under the new Government in 2011 for the future years. There is no indication that a new political energy agreement will change the goals of the former agreement significantly.

1.2. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

According to the Danish Energy Agency (Energistyrelsen; an agency under The Danish Ministry of Climate, Energy and Building) studies or documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector are not available.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

The social partners are invited on an ad-hoc basis. Consultations take place at a national level. No permanent tripartite social dialogue bodies exist in Denmark.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)

The following is a summary for all companies listed underneath:

1A) The total production of electricity was 139.613 (TJ) in 2010. In the following table it can be seen how the production was distributed across different energy sources. (The source of the figures is Danish Energy Association’s annual report 2010. Link: http://www.ens.dk/da-DK/Info/TalOgKort/Statistik_og_noegletal/Aarsstatistik/Documents/Energistatistik_2010.pdf):

Distribution of production of electricity by type of energy source

Energy source

TJ of total production of electricity in Denmark

Percentage of total production of electricity in Denmark

Fossil fuels
  1. TJ
  1. %
Hydro
  1. TJ
  1. %
Wind
  1. TJ
  1. %
Biomass
  1. TJ
  1. %
Biogas
  1. TJ
  1. %
Photovoltaic
  1. TJ
  1. %
Total production
  1. TJ
  1. %

2A) The total employment in the electricity sector is 9540 (figure from 2010). There are no data available on its distribution across different energy sources.

3A) In Denmark, the production plants in the electricity sector are divided in three groups. The first group contains the 15 largest and centralised power plants. Their energy sources are mainly hard coal and lignite and to a smaller degree biomass. The second group consists of 600 decentralised combined head and power plants, industrial plants and local plants. Their energy sources are natural gas, waste, biogas and biomass. The third group consists of 5.400 windmills with a renewable energy source in the form of wind. There are no power plants in Denmark based on nuclear energy sources. Although photovoltaic energy is used to create electricity in Denmark, this energy source is not unified in bigger power plants. Instead it is created in private homes with solar power cells. Electricity production with hydro energy is also very limited in Denmark. One small power plant is represented in this study, even though they account for a very small part of the total production.

There are only two significant electricity producers in Denmark. The smaller producers are left out of this report apart from Tangeværket, which is a small power plant producing electricity on hydro power.

Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

DONG Energy A/S

6.000 employees

2011

Private

Vattenfall

650 employees

2011

Private

       
NUCLEAR

No nuclear energy in Denmark

     
       
       
HYDRO

Tangeværket

6 employees

2011

Private

       
       
WIND

DONG Energy A/S

6.000 employees

2011

Private

Vattenfall

650 employees

2011

Private

       
BIOMASS

DONG Energy A/S

6.000 employees

2011

Private

Vattenfall

650 employees

2011

Private

       
PHOTO-VOLTAIC

No power plants

     
       
       

2.2 Please provide an overview of the current organisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

The overall transmission net is controlled by Energinet.dk, which is an independent public enterprise. The enterprise owns the transmission net on 400 kV and has the transmission net on 132 and 150 kV at their disposal. The current organisation of electricity distribution in Denmark is not dominated by one single company. There are 84 companies distributing electricity in Denmark, among them both very small and larger companies, acting at territorial level.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

DONG Energy A/S

6000 employees

2011

Private

SEAS-NVE Holding A/S

615 employees

2011

Private

Syd Energi a.m.b.a.

700 employees

2011

Private

2.4. Were there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

The economic crisis has had some influence on the electricity sector in Denmark. The largest electricity producing company DONG Energy has cancelled planned investments for as much as DKK 20 billion (€ 2.7 billion) in 2010 and 2011. The company has fired more than 100 employees in Denmark, but still the company has had a growth in the number of employees since 2008. Furthermore, Dong Energy has planned to close two power plants in 2013, Ensted-værket and Stigsnæsværket. At Ensted-værket the boiler plant for biomass with the capacity of 38 MW will be maintained. DONG Energy has also been forced to prioritise between energy sources for the electricity production: The development of the technology for CO2-storage is given a low priority, whereas wind energy and biomass will be prioritised. This still reflects the wish of this company to give a higher focus on the environment and renewable energy.

The economic crisis and the lower demand for electricity has also had a great influence on the Swedish owned Vattenfall, which entered the Danish market in 2005. In 2009 the company depreciated their five power plants in Denmark from DKK 8 to 5.5 billion (€ 1.1 to 0.7 billion).

3. Industrial relations in the electricity sector: Actors

3.1 Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

As can be seen from the answers in the table below, no data is available regarding to the level of the trade unions membership in the subsector. Instead the overall membership data on the number of members in the electricity sector are given in parentheses.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

DONG Energy A/S

The Confederation of Danish Industries (DI)

Danish Association of Professional Technicians (Teknisk Landsforbund; 1019 members in the electricity sector)

Danish Union of Electricians (Dansk El-forbund; 200 members)

United Federation of Danish Workers (3F; 700 members)

The Union of Commercial and Clerical Employees in Denmark (HK; 800 members)

Danish Metalworkers Union (Dansk Metal; 86 members)

Vattenfall

The Confederation of Danish Industries (DI)

   
NUCLEAR

No nuclear producing companies in Denmark

   
   
   
HYDRO

Tangeværket (Cooperative society)

No data available.

No data available.

   
   
WIND

DONG Energy A/S

The Confederation of Danish Industries (DI)

Danish Association of Professional Technicians (Teknisk Landsforbund; 1019 members)

Danish Union of Electricians (Dansk El-forbund; 200 members)

United Federation of Danish Workers (3F; 700 members)

The Union of Commercial and Clerical Employees in Denmark (HK; 800 members)

Danish Metalworkers Union (Dansk Metal; 86 members)

Vattenfall

The Confederation of Danish Industries (DI)

   
BIOMASS

DONG Energy A/S

The Confederation of Danish Industries (DI)

Danish Association of Professional Technicians (Teknisk Landsforbund; 1019 members in the electricity sector)

Danish Union of Electricians (Dansk El-forbund; 200 members)

United Federation of Danish Workers (3F; 700 members)

The Union of Commercial and Clerical Employees in Denmark (HK; 800 members)

Danish Metalworkers Union (Dansk Metal; 86 members)

Vattenfall

The Confederation of Danish Industries (DI)

   
PHOTO-VOLTAIC

No photovoltaic producing companies in Denmark

   
   
   
And in the distributing companies

Distribution GRID

companies

DONG Energy A/S

The Confederation of Danish Industries (DI)

Danish Association of Professional Technicians (Teknisk Landsforbund; 1019 members in the electricity sector)

Danish Union of Electricians (Dansk El-forbund; 200 members)

United Federation of Danish Workers (3F; 700 members)

The Union of Commercial and Clerical Employees in Denmark (HK; 800 members)

Danish Metalworkers Union (Dansk Metal; 86 members)

SEAS-NVE Holding A/S

The Confederation of Danish Industries (DI)

Syd Energi a.m.b.a.

The Confederation of Danish Industries (DI)

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

According to the trade unions there is a high degree of trade union representation in all of the subsectors. The reason is that the new subsectors are developed in the established companies, so that the new employees in the sector automatically are informed and aware of the opportunity of trade union membership. The crisis has not had any impact on the trade union representation.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

No major reorganisations, splits or mergers of trade unions or employer organisations in the sector during the last five years.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

The sector is covered by established actors. No new actors in the evolving RES industries.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

Neither the trade unions nor the employer organisations have started any special initiatives to extend their representation to the new emerging parts of the sector in relation to the representation they already have. However, DI has formed a new branch federation within the organisation, DI Energy of which another federation DI Bio Energy is a part. These federations do not take part in collective bargaining.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what levels are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

The collective agreements are concluded on a sectoral level followed by company level regarding both the producers and the distributors.

  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

The coverage rate of collective bargaining is around 85% among the employees performing jobs belonging to the domain of the Danish Confederation of Trade Unions (LO) and the Confederation of Danish Employers (DA). This is based on a joint estimate of the social partners in the sector. According to the social partners there is no difference between the subsectors.

It is more difficult to estimate an average coverage rate since staff is having a university degree are employed on individual contracts (engineers, executives, etc). However, the average percentage should be found on the side of 50+ since the LO/DA-employees form the majority.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

  • Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

According to the trade unions the level of pay and working time in the electricity sector follows the national average.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

According to the Danish Energy Agency the government has taken one initiative since 2008, which is the Danish Knowledge Centre for Energy Savings in Buildings (Videncenter for energibesparelser i bygninger). The centre involves the social partners and the purpose of the centre reflects the government’s goal to reduce Denmark’s energy consumption by 25 % in 2025. The way to reach this is through continuing education, guidelines to sales promotion and consultation of energy saving - overall to have a common knowledge centre for the social partners in this policy area.

  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

No new bipartite and/or tripartite bodies dealing with specific issues of the electricity sector since 2008. The existing bodies are: The Joint Industrial Committee for the industrial sector (Industriens Fællesudvalg), The Industrial Committee for the education of electricians (Det faglige udvalg for elektrikeruddannelsen, EVU). The Industrial Committee for continuing education in electrical fittings and energy (Efteruddannelsesudvalget for tekniske installationer og energi, ETIE). The Health and Safety Council in the industry sector (Industriens Branchearbejdsmiljøråd, I-BAR).

  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

The initiatives have mainly been taken separately by the social partners. A joint initiative is a booklet from November 2008, where three social partner organisations lay out three main objectives for the future energy policy: Energisatsning til gavn for klima, vækst og beskæftigelse (Energy initiatives to the benefit of climate, growth and employment) (Source: http://di.dk/Shop/Publikationer/Produktside/Pages/Produktside.aspx?productId=7424). The three organisations are two unions and a business federation: The Danish Society of Engineers, IDA; Danish Metalworkers Union (Dansk Metal) and Danish Energy.

  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

The employer’s association, The Confederation of Danish Industries (DI), and the trade unions have not been involved in a formalized cooperation on the making of the national action plan to reach the 2020 target. They have been consulted on an ad hoc-level.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

It is difficult for the social partners in general to give precise answers to this question. The United Federation of Danish Workers (3F) believe that the economic crisis has had some impact on the employment and working conditions, but how and how much is difficult for them to say. The organization notices that there have been rounds of layoffs since 2008, which also has affected their members. Whether these changes are caused by the economic crisis alone or strategic restructuring plans to reorganize the companies’ production regardless of the crisis is hard for 3F to say.

According to the Danish Association of Professional Technicians (Teknisk Landsforbund) the economic crisis has caused the consumption of electricity to fall. At the same time there have been layoffs and spending cuts in the sector, but the organization cannot fully estimate to what degree they are caused by the economic crisis or unfavorable prioritization of the companies.

According to the Danish Union of Electricians (Dansk El-forbund) the privatization of the sector some ten years ago has been more crucial for the employment and working conditions than the economic crisis. Because of the private status of the workers the levels of their pay and working time have followed the national level during the crisis. The privatization has changed the conditions for the workers in this sector, among others given them new tasks.

In Dong Energy they have noticed that employment is moving from the fossil energy sector to the renewable energy sector.

5. Commentary

Like all other sectors the electricity sector in Denmark has faced some challenges because of the economic crisis. There have been layoffs and cut downs during the last couple of years. However, privatisations and mergers in the sector seem to have had their share of the present status of the sector.

The subsector of renewable energy has been politically prioritized before and during the crisis, and is a breeding ground for further development of the sector and renewable energy measures in the years to come.

There have not been changes in the organisation of the social partners since 2008. The representation of employees in the new subsectors is unproblematic, since the new subsectors are mainly covered by existing companies. Still, the trade unions are aware of the new subsectors and work for a continuing high representation within these.

Nønne Schou Christensen and Carsten Jorgensen, FAOS, University of Copenhagen