Posted on February 3, 2025
HIGHLIGHTS
Plans to replace with new 2-3 GW tender offering subsidies
Follows failed 3-GW offshore wind auction late 2024
Vows to start hydrogen pipeline exports to Germany by 2030
The Danish government is to redraw the country’s offshore wind framework, pledging to cancel an ongoing 3-GW auction and replace it with a new process at “more attractive terms,” while also vowing to progress plans for green hydrogen pipeline exports to Germany by 2030, it said Jan. 31.
The new offshore wind tender, earmarked for 2-3 GW of capacity, will include the option of state subsidies and “more flexibility for the bidders,” the Danish Ministry of Climate, Energy and Utilities said in a statement.
The move comes after a 3-GW offshore wind auction in Denmark in late 2024 failed to attract any bidders.
The energy ministry said the result was down to a “combination of rapidly increasing prices, supply chains under pressure, and uncertainty about the speed of demand growth of green energy.”
Market participants also highlighted the lack of state support and that bidders were on the hook to pay for the grid connection as reasons for the no-show.
Another auction round had been due to follow the unsuccessful tender, with three 1-GW sites — Kattegat, Kriegers Flak II and Hesselo — on offer with a bid deadline of April 5.
However, the government said it had agreed to cancel the tender and draw up a new auction framework in dialogue with other political parties.
It plans to publish a new tender in 2025, with bids due in spring 2026.
“The Danish Government will go all in to establish the conditions that can enable a rapid scale-up of Danish offshore wind,” Minister for Climate, Energy and Utilities Lars Aagaard said in a statement. “I hope that the parties of the Parliament will agree on the reasoning behind the possibility of bringing state subsidies back, so we can ensure a green Danish energy supply.”
Industry welcomes move
Henrik Andersen, CEO of Danish wind turbine maker Vestas, welcomed the government’s move to respond to the “clear signal” from December 2024’s failed tender.
“It is right to cancel tenders for offshore wind projects with terms that are not up to date,” Andersen said in a Jan. 31 post on LinkedIn. “Denmark needs safe, green energy and Vestas supports a new tender in 2025 with less risk for those who want to set up offshore wind. The Danish wind turbine industry is ready to deliver.”
The CEO added that the government must go further and map out a longer-term road map for its offshore wind industry.
“We must move away from taking one tender at a time,” Andersen said. “The wind turbine industry needs clarity in the long term with annual offshore wind tenders of at least 1 GW.”
Hydrogen pipeline to Germany
The Danish government also signaled its commitment to progressing its nascent renewable hydrogen infrastructure, committing to pipeline exports to Germany by 2030.
The country stands to be a significant green hydrogen exporter, backed by its renewables potential, and the government said it was increasing funding for the planned pipeline network.
In October, the government said it was working to limit delays to its planned hydrogen backbone after grid operator Energinet flagged a delayed timeline for the project.
Energinet said that its timeline had slipped to end-2031 at the earliest for the “Lower T” segment of the planned network, from a previous timeline of 2028 for the first cross-border connection to Germany.
“We now increase government funding and present the initiatives to enable the establishment of the first stretch of the pipeline,” the minister said. “This is the beginning, not the end.”
Specific terms have not yet been established, but the government is proposing reducing booking requirements to 0.5 GW to “realize the first phase of the pipeline based on one project.”
The government said the hydrogen backbone plans included expansion to the north and east towards Fredericia.
“However, meeting the 2030 ambition requires a dedicated focus on building the first stretch of the pipeline from Esbjerg to the German border,” it said.
Denmark is to provide over DKK1 billion ($140 million) in funding to establish the hydrogen pipeline between Esbjerg and the German border.
Energy island plans
Denmark also said it had not been possible to establish the legal framework to continue with the planned next phase of the Bornholm Energy Island.
The future energy island is to consist of offshore wind farms south of Bornholm with up to 3.8 GW capacity as well as high-voltage grid installations on Bornholm and Zealand, with export connections to the Danish mainland and Germany.
The project received Eur645 million ($670 million) in EU funding under the Connecting Europe Facility on Jan. 30.
Co-developers 50Hertz and Energinet welcomed the support in a Jan. 31 statement, and called for a regulatory path for the project to be defined.
“The discussion on how Denmark can support the German need for green electricity will continue when a new German government is in place,” the Danish government said.
