Historic offshore wind agreement passed
On May 30, 2023, the Danish government and several parties in Danish Parliament agreed on the tender framework for the largest offshore wind expansion in Denmark's history. The agreement covers up to 9 GW of offshore wind, which can potentially be expanded to 14 GW or more.
The agreement includes tender framework for 6 GW of offshore wind located in the areas Hesseloe, North Sea I (three areas), Kattegat II and Kriegers Flak II and in addition, tender framework for Energiø Bornholm of 3 GW. The 9 GW are placed as follows:
- Minimum 3 GW at Energiø Bornholm
- Minimum 3 GW in North Sea I
- Minimum 1 GW at Kattegat II
- Minimum 1 GW at Kriegers Flak II
- 0,8-1,2 GW at Hesseloe.
It is expected that the offshore wind projects will be able to supply green electricity to over 14 million Danish and European households. In addition to the minimum capacity, the concessionaires have the option in certain areas to establish additional capacity through overplanting. This option makes it possible to significantly increase the total capacity, support system integration in the grid and promote Power-to-X in Denmark.
The minimum capacity for each area must be fully established by the end of 2030. If the concessionaire wishes to overplant, the additional capacity must be fully established no later than two years after the minimum capacity deadline.
A notable part of the agreement is that for the first time, the Danish state will be co-owners of the offshore wind projects with a state ownership share of 20% of the tenders for the 6 GW located in the areas of Hesseloe, North Sea I (three areas), Kattegat II and Kriegers Flak II.
In addition, the offshore wind projects are offered without subsidies and with an annual concession payment as the payment model. This means that bidders participate in the tenders by offering a fixed annual concession payment to the state over the course of 30 years for the right to use the offshore area.
Focus on sustainability and social responsibility
The agreement introduces increased requirements for sustainability and social responsibility in connection with the tendering of the offshore wind projects, including the establishment of a nature marine fund. Price will be the only competitive criteria, however, there are a number of entry requirements that raise the standard in this respect compared to previous tenders.
The Danish Energy Agency has already announced that they will invite potential bidders to a market dialogue on the newly published tender framework. Plesner is following the development.
Read the press release (in Danish)
Read the agreement (in Danish)
Do you want to know more?
To learn more, contact Plesner's Energy and Infrastructure team.