Seeking to rekindle the interest of developers for new offshore wind ventures in the country, Danish authorities have now changed course. In an announcement today, Danish authorities have proposed to re-introduce state support for offshore wind projects in future tenders, reflecting the needs of an industry having faced significant cost increases and difficult market conditions the last couple of years. This follows the results from late last year, when no bids were submitted from developers for project areas offered in the North Sea. The round drew criticism for industry stakeholders, pointing out that the round did not reflect the new cost reality of building offshore wind projects, and that there were limited offtake opportunities.

In the same announcement, it was revealed that the ongoing round for the three offshore wind sites Kattegat II, Hesselø and Kriegers Flak II, with a combined total of around 3 GW, have been cancelled, and the government will now work on re-launching a round offering 2-3 GW of capacity, including a model for state support. The Bornholm energy island project has also been put on hold, where authorities have expressed a wish to wait for the German elections to conclude before taking a final call on the project.

The moves follow a broader trend seen in the last couple of years, where a number of markets are adjusting and introducing new measures to remain attractive to developers. Similar moves have been seen in the UK, Poland and Japan, all choosing to update and increase the subsidy support on offer. The UK chose to adjust the subsidy strike price in the AR6 round, after no bids were placed in AR5. Similarly, Poland has chosen to adjust support after site characteristics and Japan for cost increases experienced during the development phase.

Image Credit: Ørsted