The recent failure of Denmark’s 3GW offshore wind auction to attract any bidders is being described as a “huge setback” for the country’s green energy transition. According to Green Power Denmark, the trade group representing the industry, this outcome could delay Denmark’s goals for energy independence.
Setback for Denmark’s Green Transition
The auction, which was the largest ever conducted by Copenhagen, closed without any entries for the three sites available. Kristian Jensen, CEO of Green Power Denmark, emphasized that the current situation signifies a stall in the green transition. He stated, “Too few wind turbines are being built both at sea and on land, and if that situation does not change, we will continue to depend on electricity from black energy sources.”
Economic Pressures and Market Conditions
Jensen pointed to various factors contributing to the auction’s failure, including rising costs of wind turbines due to inflation and increasing commodity prices. Higher interest rates have further pressured the economics of renewable energy projects. However, he noted that economic conditions alone do not explain the lack of bids.
Countries like the UK, Poland, and the Netherlands are currently running successful tenders, often with favorable terms such as state-funded grid connections and potential state aid for investors. In contrast, Denmark’s market uncertainty regarding energy pricing has left investors hesitant.
Urgent Need for Action
Jensen highlighted the urgency of transitioning heating systems and industrial production to electricity, noting a lingering uncertainty about the feasibility of selling electricity in hydrogen form. The trade group warned that the lack of bids for offshore wind farms in the North Sea creates a critical situation for the wind turbine industry, tying Denmark to fossil fuel imports longer than anticipated and weakening competitive electricity pricing for businesses and consumers.
Future Tenders and Recommendations
The 3GW tender in the North Sea is the first part of a larger 6GW offshore wind initiative. The remaining 3GW will be tendered in inland waters, with a bid deadline set for April 1. Green Power Denmark urges the government and Danish Parliament to assess the situation as soon as the results of the inland tender are known to ensure the country’s green ambitions are not compromised.
Sources
- Green Power Denmark – Industry Insights
- Danish Energy Agency – Offshore Wind Initiatives
- Reuters – Renewable Energy News
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