Denmark Drives Offshore Wind Ambitions

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Denmark is forging ahead with two new offshore wind farms as its cements it place as Europe's leading wind energy nation.

Strong Return to Offshore Wind

The Danish Energy Agency has awarded contracts for two offshore wind farms in Danish waters to Sweden's Vattenfall and two subsidiaries. The company has been awarded the Hesselø and North Sea I Mid offshore wind projects in the latest Danish offshore wind tender. The awards mark a strong return for Denmark's offshore wind sector which stalled after the government's 2024 tenders received no bids. According to Industrial Info Resources data, there are 10 offshore wind projects in Denmark worth more than US$30 billion in investment. 

The Projects 

The Hesselø offshore wind project is located in the Kattegat Sea between Denmark and Sweden, around 30 kilometers (km) from the coast, with a minimum installed capacity of 800 megawatts (MW). The North Sea I Mid Offshore Wind Project is located in the North Sea, approximately 20 km off the coast near Hvide Sande, with a minimum capacity of 1 gigawatt (GW). The wind farms are due to be completed by 2032 and combined, they will be capable of supplying power to 1.8 million homes. "Winning both projects reflects our continued ambition to grow our offshore wind portfolio and support the electrification of industry and society," said David Flood, Head of Business Unit Offshore, Vattenfall. "Wind power, together with other fossil-free sources of generation, can help meet the growing demand for clean electricity in Europe."

The Government Take

"The Danish Energy Agency has conducted an extensive market dialogue and tender process on the construction of two new offshore wind farms in the North Sea and Kattegat. It is very pleasing that we have now reached an important milestone with a positive result, where we can announce the winners of the tenders," said Deputy Director General of the Danish Energy Agency Stig Uffe Pedersen. The tenders offered two-sided contracts for difference (CfD), where the state ​guarantees offshore wind producers a fixed price for ​their electricity. This comes after a previous subsidy-free round had failed. North Sea Mid ‌received ⁠two bids, and Vattenfall won with an offer of 67 euros (US$78) per megawatt-hour (MWh). Hesselø attracted five bids, and Vattenfall's winning offer came in at 72 euros (US$83) per MWh, the agency ​said. A third proposed offshore project, the 1 GW Nordsøen Syd has a bid deadline of October 2028. 

Denmark: Offshore Wind Pioneer

According to Europe's wind energy association WindEurope, Denmark is the birthplace of offshore wind energy with the world's first offshore wind farm, Vindeby, built there in 1991. Today, the country has over 3 GW of installed offshore wind, supplying around a quarter of its power. Combined with onshore wind, wind energy supplies almost 60% of the country's electricity. The country is targeting 14 GW of offshore wind capacity by 2030 and at least 35 GW by 2050. WindEurope welcomed the auction results for the new windfarms: "Denmark held a successful offshore wind auction for two sites with a total capacity of 1.8 GW. It shows that auction design matters. The last Danish offshore auction came with uncapped negative bidding. It failed to attract any bidders. This auction round had an improved auction design, offering two-sided Contracts for Difference. It provided developers with the visibility and risk allocation they need to invest in offshore wind."

Key Takeaways

• Denmark awards contracts for two offshore windfarms to Sweden's Vattenfall.
• The projects will have a combined generating capacity of 1.8 GW. 
• Wind energy supplies almost 60% of the country's electricity. 

About Industrial Info Resources
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