RWE Wins Danish ‘Luck of the Draw’ Offshore Wind Tender
The Danish Ministry of Climate, Energy and Utilities and the Danish Energy Agency (DEA) have announced that Thor Wind Farm I/S (owned by RWE AG, RWE Renewables GmbH, and RWE Renewables Management UK Limited) has won the tender for the 1,000 MW Thor project, Denmark’s largest offshore wind farm to date.
Earlier this year, the Danish Energy Agency pre-qualified six companies and consortia to bid for the Thor offshore wind farm, which was tendered with a capacity from 800 MW to 1,000 MW.
The shortlisted developers were: Ørsted; Vattenfall; a consortium of Total and Iberdrola; RWE-owned Thor Wind Farm I/S; a joint venture of SSE Renewables and Thor OFW K/S, which is owned by Copenhagen Infrastructure IV Thor OFW ApS and Andel Holding; and Swan Wind P/S, a joint venture between Eneco and European Energy.
The developers had until mid-March to submit their preliminary bids. The call for final bids was then issued in August and remained open until November.
On 25 November, the DEA reported that more than one bidder had offered to build the Thor offshore wind farm to the maximum capacity of 1,000 MW at the minimum price of DKK 0.01/kWh, and the tender would therefore be decided by a lottery draw, which is in accordance with the tender specifications.
Denmark plans to have Thor’s grid connection ready by 1 January 2025, while the wind farm itself must be fully commissioned by 31 December 2027. Once fully operational, Thor will be capable of producing enough green electricity to supply the equivalent of around 1.4 million Danish households.
Under the current rules, RWE will carry out the installation of the offshore wind farm, including the offshore substation and the grid connection from the offshore substation to the substation on land.
A license for the electricity production and authorisation will be granted for 30 years with the possibility of a five-year extension, if allowed under the applicable regulation.
With the expected electricity prices from 2026 onwards, when the 1 GW Thor is scheduled to produce first power, the bid winner is anticipated to have paid the state DKK 2.8 billion (around EUR 376 million) within only a few years. After that, in practice, there will be no financial balance between the state and the bid winner, and the wind farm will be run on purely commercial terms, without support, for the rest of its 30-year lifespan.
Thor will thus be the first offshore wind farm in the world to be built with payments to the state, the DEA said.
The Danish Energy Agency will soon convene a meeting with the concession winner to discuss the process for the near future and expects to sign the concession agreement with Thor Wind Farm I/S within four to six weeks.
Sven Utermöhlen, CEO Wind Offshore of RWE Renewables, said: “We look forward to working with the Danish government and all other stakeholders to take our new offshore wind development project forward. In the coming months, we will prepare for the permit application and focus on the soil investigations”.
The 1 GW Thor project is the first of the three offshore wind farms agreed to be established in the Danish Energy Agreement from 2018 and will become Denmark’s largest offshore wind farm, once built.