Denmark's Offshore Wind Tender Faces Setback: No Bids for 6GW Projects

Denmark, known for its leadership in renewable energy, has hit a roadblock in its offshore wind ambitions. The first phase of its 6GW offshore wind tender in the North Sea, touted as the largest in the country’s history, has failed to attract any bids.

No Bids for North Sea Offshore Wind Projects

The tender offered three offshore wind farms in the North Sea, with a collective capacity of 3GW, but the deadline for submissions passed with no developers stepping forward. Despite initial interest from multiple companies during market dialogues, the Danish Energy Agency received no formal bids.

Danish Minister for Climate, Energy, and Utilities, Lars Aagaard, expressed disappointment:

"This is a very disappointing result. The circumstances for offshore wind in Europe have changed significantly in a relatively short time, including large price and interest rate increases."

Challenges Impacting Offshore Wind Development

Key factors likely contributing to the lack of interest include:

• Rising Costs: Increased material prices and higher interest rates have created financial challenges for offshore wind developers.

• No Subsidies: Denmark’s tender offered no subsidies to bidders. Instead, developers were required to provide a fixed concession payment over 30 years for the right to develop the sites.

• State Co-ownership: The terms included 20% state co-ownership in each project, which may have discouraged private investors seeking more control.

  
  

Future Offshore Wind Projects in Denmark

The tender process isn’t over yet. Three additional offshore wind farms in Danish coastal waters—Hesselø, Kattegat, and Kriegers Flak II—are still open for bidding, with a deadline set for April 1, 2025. These sites, alongside the North Sea projects, could collectively add at least 6GW of capacity, potentially exceeding 10GW depending on the number of turbines deployed.

Currently, Denmark’s total offshore wind capacity stands at 2.7GW. Expanding this capacity is critical to meeting its ambitious renewable energy targets.

Reassessing the Strategy

In response to the setback, the Danish Energy Agency plans to engage in dialogue with the market to understand the barriers developers faced and reassess the tendering process.