Denmark Launches Massive Offshore Wind Auction

Denmark has opened a new offshore wind tender, the country’s largest ever, offering a minimum of 6 GW of new capacity spread over six wind farms, with the overplanting option allowing for 10 GW or more of new capacity to be added.

The Danish Energy Agency published the tender for the wind farms located in the North Sea I, Kattegat, Kriegers Flak II, and Hesselø areas. The tenders follow the political agreement on tender frameworks from the spring of 2023.

The offshore wind farms must deliver at least 6 GW, and as a new element, there will be freedom to establish as much offshore wind as possible on the tendered areas, with the exemption of Hesselø with a maximum capacity of 1.2 GW.

If the market utilizes this freedom to optimize the usage of the areas, it could result in the construction of 10 GW offshore wind or more, the agency said.

The power produced by the new wind farms will be used not only for Danish consumption, but also for export to the neighboring countries and for green hydrogen production. This plan is in line with the political agreement made in the beginning of April on the financial framework for hydrogen infrastructure.

”Finally, we are able to publish the biggest offshore wind tender in Danish history. With hundreds of wind turbines, we are insuring ourselves against Putin’s black gas, and as of today Denmark is one large step closer to becoming Europe’s green power house. When the wind turbines are operating, we can cover all of Denmark’s power consumption with green electricity – and we can produce hydrogen and green fuels for ships and planes. It is projects of this scale that can make a big, green difference for the climate and our security. Not just for Denmark, but for all of Europe,” said Lars Aagaard, Denmark’s Minister for Climate, Energy, and Utilities.

The projects tendered in this round will be built without state subsidies and with a yearly concession payment. This means, that the bidders will participate in the tenders by bidding a yearly concession payment to the Danish state across a 30-year period, for the right to use the seabed.
The concession payment is combined with the Danish state co-owning each of the tendered offshore wind farms with a minority ownership of 20 percent.

”Now it is up to the market to take part in Denmark’s next big wind adventure. The next chapter will thus be written and carried out by the market – it is the market that must bring these tenders across the finish line,” said Minister Aagaard.

An offshore wind farm with 1 GW capacity is expected to require capital investments of around DKK 16 billion (around EUR 2.14 billion), and, according to calculations from market actors from 2020, around 9,500 workers.

The minimum capacity of all the offshore wind farms, of a total of 6 GW, has to be commissioned
before the end of 2030.

The tender also includes a number of requirements with regards to sustainability and social responsibility, including the obligatory use of recyclable wind turbine blades, unless a market analysis from the Danish Energy Agency deems that the requirement will prevent commissioning of one or more of the 6 GW before the end of 2030. If this is the case, it will instead be required that the blades are reused for other purposes at the time of decommissioning.

The developers will also have to monitor the offshore wind farm’s effect on nature and the environment. Two wind farms, one in the North Sea and one in Kattegat in internal Danish waters, will require a so-called nature inclusive design to provide a positive impact on the marine environment and biodiversity.

Denmark’s operating offshore wind farms currently have a capacity of 2.7 GW.