A year ago, the desolate bidding seats were still vividly remembered, but now the outline of a windmill has once again been erected on the waves of the North Sea. Denmark has used a mechanism innovation to pull offshore wind power back from the neglected track of competition, providing Europe with a green transition to a reigning engine.

Implementation of bidding results

The latest offshore wind power bidding results in Denmark have been released. Swedish energy company Vattenfall has successfully won the bid for two major projects in the central North Sea and Hessler, with a total minimum installed capacity of 1.8GW. It is expected to be fully put into operation before 2032, and the annual power generation can meet the electricity needs of 1.8 million households in Europe, becoming an important turning point for the recovery of the Danish wind power market.

The 2024 Denmark 3GW wind power tender had zero bids due to lack of market confidence. The active participation of bidding companies in this round confirms the significant effectiveness of Denmark's policy adjustments. The Vattenfall quotation is competitive, with electricity prices of 67.6 euros/MWh and 72.7 euros/MWh respectively, both of which enjoy a 20-year two-way contract price guarantee.

New Policies Resolve Industry Difficulties

A 20-year long-term pricing mechanism effectively mitigates the risk of electricity price fluctuations, stabilizes project cash flow, and significantly improves the financing feasibility of offshore wind power projects. The low quotation this time also reflects the continuous improvement of the construction cost and investment environment of offshore wind power in Europe. The difference in competition intensity between the two projects is significant, with the Hessler project facing even more intense competition. All winning contracts still need to pass regulatory compliance audits by the Danish Energy Agency.

Previously, due to the impact of cost, financing, supply chain price increases, and electricity price uncertainty, Danish wind power investment has cooled down. To this end, the local government has reformed the bidding mechanism, introduced two-way CfD price difference contracts, relaxed project construction periods, and reasonably shared market risks, effectively boosting industry investment willingness.

The industry model is highly instructive

The total scale of this round of bidding is 2.8GW. Currently, the development entities for the two major projects have been determined, and the remaining 1GW project in the southern part of Beihai will continue to be tendered until October 2028. This winning bid further consolidates Vattenfall's leading position in Nordic offshore wind power and helps it deepen its cultivation in the regional new energy market. Keywords: Denmark, offshore wind power, new energy

Denmark's transition from zero bidding to market-oriented competition provides an important model for the European wind power industry. The new policy does not rely on high subsidies, but activates the market by optimizing risk allocation, stabilizing expected returns, and improving project financing. The reform ideas are in line with the iteration direction of wind power in the UK, providing feasible references for European countries to improve their wind power bidding systems.Editor/Gong Ziwei