7 February 2023
Pause to Danish offshore wind scheme is absurd
The Danish Government has put on hold Denmark’s “open door” offshore wind development procedure. Pausing this established and effective scheme creates investment uncertainty for 20 GW of offshore wind currently under planning and development. It seriously undermines Denmark’s 2030 targets for offshore wind, which are central to Europe’s wider targets. And it flies in the face of the EU’s commitment to facilitate (rather than obstruct) the accelerated build-out of renewables.
The Danish Government has surprisingly decided to put on hold its so-called “open door” scheme for offshore wind development– citing concerns over possible infringement of EU state aid rules as the reason.
That’s bad news for Europe’s energy transition. The EU wants to strengthen its energy and climate security with more home-grown renewables and less imported – and expensive – fossil fuels. REPowerEU, the EU’s new energy policy, has doubled down on the expansion of offshore wind to help power Europe’s future energy system. At two major summits in 2022 EU Heads of Government and the EU Commission President committed to ambitious targets for offshore in the North Sea and Baltic Sea: 76 GW and 20 GW by 2030 respectively. As a frontrunner in offshore wind, Denmark has committed to 13 GW by 2030, up from 2.3 GW today.
“Denmark has been making great progress on offshore wind so far. Many projects essential to delivering Denmark’s 2030 offshore wind target are already under planning or development. Pausing their established and effective “open door” approach to offshore wind development now will seriously undermine these targets. It will create uncertainty for more than 20 GW of wind farms currently under development”, says WindEurope CEO Giles Dickson.
The decision of the Danish Government to pause the scheme comes at a time when Europe is seeking more renewable energy to strengthen its energy security. “This decision is completely absurd – especially at a time when the EU is determined to facilitate rather than obstruct the build-out of renewables and is seeking a more flexible approach to what governments can and cannot do in support of this. The current Danish approach to offshore wind is perfectly workable and delivers exactly what citizens and companies all over Europe urgently need: more renewable electricity at low cost”, says WindEurope CEO Giles Dickson.
Just last week the European Commission announced changes to its state aid guidelines to support Member States on renewables – as part of the EU’s wider Green Deal Industry Pact.
Explainer: Denmark’s “open door” procedure to offshore wind development:
Under the “open door” procedure, developers of new offshore wind farms can currently apply for the development of offshore wind farms on their own initiative. This provides them with greater flexibility in choosing a project location, defining the generation capacity of their project and arranging its grid connection. Under the “open door” procedure developers can also locate their projects close to areas with large electricity demand to facilitate corporate renewable PPAs with industrial off-takers. In sum, this can lead to more cost-competitive projects and more efficient site selection. There is no public subsidy involved in the “open door” scheme.