After the Danish offshore wind sector experienced challenges from a lack of bidders for the tender at the end of 2024, the government moved quickly to adjust its strategy to attract more bidders. In order to increase the attractiveness of the tender, Denmark will launch a new round of 3GW offshore wind power tender and reduce the tender capacity from the original 6-9 GW to 2-3 GW, divided into two or three times. This move aims to reduce the difficulty and risk of enterprises bidding, and improve the success rate of bidding. Wood Mackenzie analysts pointed to the downsizing of tenders as one of the key factors behind the increased likelihood of companies bidding for future tenders.

The Danish government has not only adjusted the tender capacity, but also considered opening the door to subsidies to further attract bidders. Climate, Energy and Utilities Minister Lars Aggard said the government would review the tender criteria and take a holistic approach to ensure initiatives reduce risk and uncertainty in tenders. While specific subsidy measures have yet to be determined, they are likely to include contracts for difference (CFDS) and the withdrawal of some "negative" moves from previous tenders. In addition, the EU's requirement to include a 30% non-price criterion in tenders also opens up the possibility of more complex tenders that may present deadlines challenges, but also bring other benefits. The government plans to provide more details on the tender framework this year and set a deadline for the tender process in spring 2026.

In addition to adjusting the bidding strategy and considering subsidies, the Danish government is also actively pursuing other related projects. The Green Hydrogen Pipeline project, which will build the pipeline to Denmark by the end of 2030, has received funding of 7.5 billion kroner over 30 years and operational assistance of 8 billion kroner. In addition, the Bornholm Energy Island project has also received support from the EU of DKK 4.8 billion, although there is still a funding gap, but the government said it will proceed with the project. However, as most of the energy will be shipped to Germany, the Bornholm Energy Island project will be suspended until after the German election.

These initiatives by the Danish government are important to Denmark's decarbonization goals. Although the announced plan will not have a material impact on the 70 percent reduction in greenhouse gas emissions by 2030, the government said it will continue to work on projects to achieve its long-term development goals. Wood Mackenzie believes most of the government's 2030 offshore wind targets are likely to be missed, but lowering them and offering more favourable terms could help boost prospects. In addition, other governments have improved the offshore wind framework, with the European Union announcing that it will invest €1.2 billion in cross-border infrastructure, such as the Bornholm Energy Island project. These initiatives will help boost Denmark's offshore wind sector and lay the groundwork for a future clean energy transition. Editor/Xu Shengpeng