Denmark “Disappointed” as it Receives No Bids in New Offshore Wind Tender
The Danish Energy Agency is reporting that it received no bids in its new tender which was for three offshore sites in the North Sea. It is the latest tender that failed to generate interest in an industry that continues to be challenged by changing finances, as well as supply and installation challenges.
"This is a very disappointing result – and not at all what was expected when we entered into the offshore wind agreement,” said Lars Aagaard, Minister for Climate, Energy and Utilities. “There could be many explanations for today's result, and I have therefore asked the Danish Energy Agency to engage in a thorough dialogue with market players. We need to know the exact reason why the market has not bid so that we know how best to act politically.”
After two years of planning, Denmark hailed the tender in April 2024 as the largest in the country’s history with the potential for at least 6 GW and possibly 10 GW or more depending on the plans of the winning developers. Denmark opened bidding including three sites in the North Sea collective known as North Sea I which is over 12 miles from the Jutland coast and consists of over 53,000 acres. Bidding closed on the North Sea portion of the tender today with no companies having submitted proposals.
Denmark had proposed that it would retain a 20 percent minority interest in each project. It was not providing a subsidy to the developers.
Leading developers including Ørsted and Vattenfall however said they had decided not to proceed with offers. The companies said after studying the projects that the financials did not support the required investment.
The second phase of the current tender is open until April 2025. It is for additional sites located in the Kattegat and the Baltic. Each would have the potential for a further 1 GW or more. Like the tenders that ended today, the expectation is that all these sites would be in operation by 2030.
“Today's result obviously does not give rise to great optimism for the next three parks, but there may be other players and business models at play, and we will not know the answer until April,” said Aagaard. “Let me be very clear. More offshore wind must be built in Denmark. That was the government's objective yesterday, and it is still the case today."
Denmark has a long heritage in wind energy and was the pioneer in offshore wind power launching its first offshore wind farm in 1991. The agency reported in April 2024 that Denmark has a total installed capacity of 2.7 GW of offshore wind power with one additional wind farm under construction to add another 1 GW in 2027. Denmark was one of eight North Sea countries in October that recommitted to a pledge to build 120 GW of offshore power by 2030 and at least 300 GW by 2050. Denmark has a target for 14 GW of capacity by 2030.
The Danish Energy Agency looks to engage with the industry to understand the challenges and why it received no bids in the current round. The minister acknowledged that “The circumstances for offshore wind in Europe have changed significantly in a relatively short time, including large price and interest rate increases.” Denmark had been expected to launch another tender for a second sub-area in the North Sea.
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