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Danish offshore wind scheme ‘on pause’
15/2/2023
News
The Danish government has put on hold its ‘open door’ offshore wind development procedure, a move that will cause investment uncertainty for 20 GW of offshore wind currently under development and potentially undermine Denmark’s 2030 targets for offshore wind, according to WindEurope.
The scheme has been put on hold amidst government concerns over possible infringement of European Union (EU) state aid rules. With the EU wanting to strengthen energy and climate security with more home-grown renewables and less imported – and expensive – fossil fuels, the announcement from Denmark is unwelcome news, says WindEurope.
REPowerEU, the EU’s new energy policy, has doubled down on the expansion of offshore wind to help power Europe’s future energy system. At two major summits in 2022, EU heads of government and the EU Commission President committed to ambitious targets for offshore in the North Sea and Baltic Sea: 76 GW and 20 GW by 2030 respectively. Denmark has committed to 13 GW by 2030, up from 2.3 GW today.
Giles Dickson, Chief Executive, WindEurope, comments: ‘Denmark has been making great progress on offshore wind so far. Many projects essential to delivering Denmark’s 2030 offshore wind target are already under planning or development. Pausing their established and effective “open door” approach to offshore wind development now will seriously undermine these targets. It will create uncertainty for more than 20 GW of wind farms currently under development.’
Under the ‘open door’ procedure, developers of new offshore wind farms in Denmark can currently apply for the development of offshore wind farms on their own initiative. This provides them with greater flexibility in choosing a project location, defining the generation capacity of their project and arranging its grid connection. Under this procedure, developers can also locate their projects close to areas with large electricity demand to facilitate corporate renewable power purchase agreements (PPAs) with industrial off-takers. This can lead to more cost-competitive projects and more efficient site selection.
Dickson concludes: ‘This decision is completely absurd – especially at a time when the EU is determined to facilitate rather than obstruct the build-out of renewables and is seeking a more flexible approach to what governments can and cannot do in support of this. The current Danish approach to offshore wind is perfectly workable and delivers exactly what citizens and companies all over Europe urgently need: more renewable electricity at low cost.’
