Denmark Plans to Offer Up to $8.3 Billion in Subsidies for Offshore Wind

Denmark's energy ministry announced on Monday that it will offer offshore wind tenders for a maximum of 3 gigawatts (GW), which is enough to power up to three million homes. The subsidies offered to developers could reach as much as $55.2 billion Danish crowns (8.32 billion dollars).

Three tenders are scheduled to open this autumn, covering two areas of the Danish North Sea as well as one area in the waters between Denmark and Sweden.

The two tenders are expected to close in spring 2026, and the other in autumn 2027. Both will be completed by 2032 or 2033.

Due to the lack of interest in tenders and rising costs, offshore wind has been struggling with soaring interest rates, supply chain bottlenecks and higher costs.

In a press release, Energy Minister Lars Aagaard stated that "we need green energy and power more reliable to make Denmark and Europe energy independent from Russia."

The level of subsidy required will be determined by the bids submitted in the tender. A cap has been set at 55,2 billion crowns for a period of 20 years.

The ministry stated that the price of the bid and the evolution of the electricity prices will determine whether or not money is needed to support projects.

In January, Denmark announced that it would stop all offshore wind tenders in progress to revamp its model. It said a framework with no subsidies offered was not working under the existing market conditions.

The Nordic country failed to receive any bids a month ago in its largest offshore wind tender. Analysts attributed this to an auction model that was rigid and the failure to adapt to new economic realities for renewable energy projects.

Denmark is a leader in onshore and off-shore wind energy. It's home to the largest offshore wind developer Orsted and turbine manufacturer Vestas. Reporting by Louise Rasmussen, Nora Buli and Terje Solsvik. Editing by David Evans and Terje Evans.

(source: Reuters)