The increase in renewable generation was put down to a growth in wind and biogas production, the energy ministry said using statistics from the Danish Energy Agency.
As a result renewables made up 32.3% of gross energy consumption in 2017, DEA figures showed, up from 29.1% in 2016.
Actual energy consumption in Denmark marginally increased in 2017, but this masks a shift from coal and gas to renewables and oil, the DEA said.
Consumption of coal and natural gas fell 21% and 5.1% respectively, while consumption of renewable energy and oil increased 10.9% and 2.9% respectively.
The growth in renewables consumption was partly due to the low wind speeds experienced in 2016, which required coal to make up the shortfall. Wind speeds in 2017 were "close to normal" the DEA said.
The reduction in coal and gas consumed resulted in a 5.4% year-on-year fall in CO2 emissions from energy.
"The green transition is surging. Coal is fast approaching retirement age, and wind turbines increasingly supply green energy to the Danish companies and households. The new statistics of Denmark's energy consumption makes very uplifting reading," said energy, power and thermal minister Lars Christian Lilleholt.