Danish Offshore Wind Grid Connections[Draft]

Denmark’s offshore wind grid connection model has undergone a fundamental evolution. Early projects used a TSO-build model where Energinet constructed offshore substations and export cables, with costs socialised through grid tariffs. From the Thor tender (2021) onwards, Denmark shifted to a developer-pays model where the wind farm developer is responsible for the entire offshore grid connection.

Denmark’s offshore wind tender system has evolved dramatically, from government-directed projects (Horns Rev 1) through competitive subsidy auctions (HR3, Kriegers Flak) to negative bidding (Thor) to the current two-sided CfD model (2025 tenders). The 3 GW tender failure in December 2024 triggered a fundamental restructuring.

Denmark’s offshore wind prices followed a dramatic downward trajectory from negotiated feed-in tariffs through the world’s first subsidy-free/negative-bid offshore wind tenders. Horns Rev 3 (77 øre/kWh, 2019) and Kriegers Flak (37.2 øre/kWh, 2021) set successive records. Thor was awarded at effectively zero subsidy (0.01 øre/kWh) after a lottery among multiple zero-subsidy bids. The subsequent 3 GW failure demonstrated that pushing developers to pay the government was unsustainable.

Denmark operates a genuine one-stop-shop permitting model through the DEA (Energistyrelsen), which is widely regarded as one of Europe’s most streamlined frameworks. Three sequential permits cover the full project lifecycle.

Denmark’s open-door scheme, which allowed developers to propose their own offshore wind sites outside government-designated areas, was suspended on 1 February 2023 due to EU state aid concerns. As of 2026, it remains suspended with no confirmed reinstatement timeline.

Energinet publishes regular system development plans covering both onshore grid reinforcement and offshore grid connection infrastructure. Under the current developer-pays model, Energinet’s primary role is providing the onshore connection point and any required grid reinforcement.

Denmark’s maritime spatial plan (havplan), adopted under the Maritime Spatial Planning Act, designates areas for offshore wind development. The plan considers navigation routes, Natura 2000 sites, military areas, oil and gas infrastructure, fishing grounds, and submarine cable corridors.

The transition to HVDC is driven by the energy island concept, which requires high-capacity, long-distance transmission. The Bornholm Energy Island will use HVDC connections to both Denmark and Germany.

Denmark pioneered the energy island concept — offshore hubs that aggregate power from multiple wind farms and distribute it to multiple countries via HVDC connections. Two projects are planned: Bornholm (advancing) and the North Sea island / VindØ (delayed due to cost escalation).

Denmark is a founding member and one of the most active participants in the North Seas Energy Cooperation. Key contributions include: hosting the Esbjerg Declaration (May 2022), co-chairing NSEC in 2024, pioneering energy island concepts that have shaped NSEC thinking on offshore grid architecture, and deploying the world’s first hybrid interconnector (Kriegers Flak CGS).

The December 2024 tender failure forced a fundamental rethink of Denmark’s offshore wind policy. The government responded by abandoning the negative bidding model in favour of two-sided CfDs with a DKK 55.2B support cap. The 20% mandatory state co-ownership requirement was also removed to improve investor appeal.

The shift from TSO-build (Energinet bears grid costs) to developer-pays (developer bears grid costs) remains a key policy question. While developer-pays reduces public spending, it increases developer risk and bid prices. The sustainability of this model will be tested by the outcomes of the November 2025 CfD tenders.

The Bornholm Energy Island is advancing through development and tender preparation, but the North Sea island (VindØ) faces a critical juncture. Cost estimates exceeding DKK 200B have prompted the government to reassess the project scope. A phased approach or pivot to distributed hub-in-the-sea platforms may replace the original single-island concept.

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