Feb 3, 2025
Denmark cancels the 3-GW offshore wind auction to redesign it and speeds up hydrogen exports.
The Danish government plans to revise the country's offshore wind policies by canceling an existing 3-GW auction and replacing it with a new process that offers 'more attractive terms.' They also aim to advance the development of green hydrogen pipeline exports to Germany by 2030, as stated on January 31.
The upcoming offshore wind tender will target 2-3 GW of capacity and will include options for state subsidies and greater flexibility for bidders, according to the Danish Ministry of Climate, Energy and Utilities.
This decision follows the failure of a 3-GW offshore wind auction in late 2024, which did not attract any bidders. The energy ministry attributed this outcome to a mix of rapidly rising costs, strained supply chains, and uncertainty about the growth of green energy demand.
Market stakeholders noted the absence of state support and the financial burden of grid connections on bidders as contributing factors to the lack of interest.
An additional auction was planned with three 1-GW sites—Kattegat, Kriegers Flak II, and Hesselo—set to close for bids on April 5. However, the government has decided to cancel this tender and will develop a new auction framework in consultation with other political factions.
A new tender is expected to be published in 2025, with bids anticipated in spring 2026. Minister for Climate, Energy and Utilities Lars Aagaard expressed a commitment to establishing conditions for a swift expansion of Danish offshore wind. He hopes that Parliament will recognize the rationale for reinstating state subsidies to secure a green energy supply for Denmark.
Industry leaders have welcomed the government's response to the clear message from the unsuccessful tender in December 2024. Henrik Andersen, CEO of Danish wind turbine manufacturer Vestas, expressed support on LinkedIn, stressing the necessity for updated tender terms. He argued that Denmark requires reliable green energy and supports a new 2025 tender that minimizes risks for offshore wind developers. Andersen called for a comprehensive long-term strategy, advocating for annual offshore wind tenders of at least 1 GW.
The Danish government is also committed to developing hydrogen infrastructure and plans to facilitate pipeline exports to Germany by 2030. With significant potential for green hydrogen exports, the government is increasing funding for the proposed pipeline network.
In October, the government aimed to expedite its hydrogen backbone project after grid operator Energinet indicated delays. Energinet announced that the timeline for the 'Lower T' segment of the network has been pushed to late 2031, a shift from the earlier target of 2028 for the first cross-border connection to Germany.
The government is enhancing funding and initiating steps to establish the first segment of the pipeline, emphasizing that this marks the start of the project.
While specific terms are still pending, the government is considering reducing booking requirements to 0.5 GW to advance the first phase of the pipeline based on a single project. Plans for the hydrogen backbone will involve expansion north and east towards Fredericia, with a focus on building the initial pipeline stretch from Esbjerg to the German border by the 2030 deadline.
Denmark intends to allocate over DKK1 billion ($140 million) for establishing the hydrogen pipeline between Esbjerg and the German border.
Additionally, Denmark has faced challenges in setting up the legal framework necessary for proceeding with the next phase of the Bornholm Energy Island project. The future energy island will consist of offshore wind farms south of Bornholm, with a capacity of up to 3.8 GW, alongside high-voltage grid installations on Bornholm and Zealand, and export connections to both the Danish mainland and Germany.
The project received Eur645 million ($670 million) in EU funding on January 30 under the Connecting Europe Facility. Co-developers 50Hertz and Energinet have welcomed this support, emphasizing the need for a defined regulatory path. The Danish government noted that discussions regarding how Denmark can meet Germany's demand for green electricity will continue once a new German government is established.
The upcoming offshore wind tender will target 2-3 GW of capacity and will include options for state subsidies and greater flexibility for bidders, according to the Danish Ministry of Climate, Energy and Utilities.
This decision follows the failure of a 3-GW offshore wind auction in late 2024, which did not attract any bidders. The energy ministry attributed this outcome to a mix of rapidly rising costs, strained supply chains, and uncertainty about the growth of green energy demand.
Market stakeholders noted the absence of state support and the financial burden of grid connections on bidders as contributing factors to the lack of interest.
An additional auction was planned with three 1-GW sites—Kattegat, Kriegers Flak II, and Hesselo—set to close for bids on April 5. However, the government has decided to cancel this tender and will develop a new auction framework in consultation with other political factions.
A new tender is expected to be published in 2025, with bids anticipated in spring 2026. Minister for Climate, Energy and Utilities Lars Aagaard expressed a commitment to establishing conditions for a swift expansion of Danish offshore wind. He hopes that Parliament will recognize the rationale for reinstating state subsidies to secure a green energy supply for Denmark.
Industry leaders have welcomed the government's response to the clear message from the unsuccessful tender in December 2024. Henrik Andersen, CEO of Danish wind turbine manufacturer Vestas, expressed support on LinkedIn, stressing the necessity for updated tender terms. He argued that Denmark requires reliable green energy and supports a new 2025 tender that minimizes risks for offshore wind developers. Andersen called for a comprehensive long-term strategy, advocating for annual offshore wind tenders of at least 1 GW.
The Danish government is also committed to developing hydrogen infrastructure and plans to facilitate pipeline exports to Germany by 2030. With significant potential for green hydrogen exports, the government is increasing funding for the proposed pipeline network.
In October, the government aimed to expedite its hydrogen backbone project after grid operator Energinet indicated delays. Energinet announced that the timeline for the 'Lower T' segment of the network has been pushed to late 2031, a shift from the earlier target of 2028 for the first cross-border connection to Germany.
The government is enhancing funding and initiating steps to establish the first segment of the pipeline, emphasizing that this marks the start of the project.
While specific terms are still pending, the government is considering reducing booking requirements to 0.5 GW to advance the first phase of the pipeline based on a single project. Plans for the hydrogen backbone will involve expansion north and east towards Fredericia, with a focus on building the initial pipeline stretch from Esbjerg to the German border by the 2030 deadline.
Denmark intends to allocate over DKK1 billion ($140 million) for establishing the hydrogen pipeline between Esbjerg and the German border.
Additionally, Denmark has faced challenges in setting up the legal framework necessary for proceeding with the next phase of the Bornholm Energy Island project. The future energy island will consist of offshore wind farms south of Bornholm, with a capacity of up to 3.8 GW, alongside high-voltage grid installations on Bornholm and Zealand, and export connections to both the Danish mainland and Germany.
The project received Eur645 million ($670 million) in EU funding on January 30 under the Connecting Europe Facility. Co-developers 50Hertz and Energinet have welcomed this support, emphasizing the need for a defined regulatory path. The Danish government noted that discussions regarding how Denmark can meet Germany's demand for green electricity will continue once a new German government is established.