EU Approves €5bn Danish Offshore Wind Support Plan

The European Commission has given approval to a €5 billion ($5.7 billion) Danish support program aimed at expanding offshore wind capacity, helping advance the European Union’s goal of reaching net-zero emissions by 2030.

The initiative will run for 20 years and is designed to fund the development and operation of two offshore wind projects: Hesselø and North Sea I Mid.

The Hesselø project is expected to deliver at least 800 MW of capacity, producing around 3.2 TWh of electricity annually. Meanwhile, North Sea I Mid is projected to have a minimum capacity of 1 GW and generate approximately 4.6 TWh per year.

Together, the two wind farms are anticipated to produce enough energy to account for roughly 25 percent of Denmark’s total electricity output from the previous year.

Under the program, financial support will be provided through a monthly variable premium based on a two-way contract for difference. This mechanism compares a pre-agreed bid price with a reference market price, adjusted according to each wind farm’s monthly performance.

If the market price falls below the agreed bid price, operators will receive payments. Conversely, if the market price exceeds the bid price, operators must repay the difference to Danish authorities.

“With this €5bn scheme, Denmark will be able to deploy offshore wind capacities faster, in line with the Clean Industrial Deal. It will also help Denmark and the EU reduce their dependence on fossil fuel imports and increase their share of renewable energy, while ensuring that any potential competition distortions are kept to a minimum,” said Teresa Ribera, EVP for Clean, Just, and Competitive Transition.

The scheme is part of broader efforts to accelerate renewable energy development across Europe while maintaining a balanced and competitive energy market.