Posted on February 8, 2023
Denmark is one of the friendliest jurisdictions in the world for offshore wind. It is home to top developers Orsted, Copenhagen Infrastructure Partners and Vattenfall, as well as turbine builder Vestas. Its energy agency is considered a model for European development permitting, and offers a “one-stop-shop” service for all government reviews of future wind sites. However, the department has had to shut down one of its most popular offshore wind application programs because of potential conflicts with EU law, it announced in a statement Monday.
In the 2000s, Denmark unveiled a new innovation in offshore wind permitting. Under its “open door scheme,” it would allow developers to propose to build new wind farms at locations of their choosing, unsolicited, without waiting for a lease area to be designated by the government – so long as their plans met certain criteria. The system has proven popular: last year the Danish Energy Agency received nearly 50 “open door” applications from interested developers.
However, the energy agency said Monday that it has discovered that the program could be in breach of EU law, and it has suspended application processing while it seeks clarification on legal issues.
“The Danish Energy Agency will clarify the questions that have been raised as soon as possible – with the assistance of relevant ministries,” the department said in an announcement.
The decision has upset Denmark’s offshore wind industry, which expected to build about 15 gigawatts of capacity through the “open door” program. Prominent open-door applications include a five-gigawatt, four-site joint venture planned by Orsted and Copenhagen Infrastructure Partners, which would be larger than all of Denmark’s current installed offshore wind capacity combined. Offshore wind developers now have to manage uncertainty over whether mega-projects like these will move forward.
“The government is suddenly slamming the door on the green transition with a bang, sending shockwaves through the entire green energy sector. Companies have done a huge amount of groundwork and are ready to build more green energy, and then the government pulls the plug on the ‘open door’ scheme at the 11th hour,” said Kristian Jensen, CEO of Green Power Denmark, in a statement Monday. “It is a break with the way we have historically conducted energy policy in Denmark and creates enormous uncertainty about green investments.”
