Photo by Kim Hansen. Postprocessing by Richard Bartz and Kim Hansen. | Wikimedia
By Jo Nova
““The green transition in Denmark has stalled right now”
Denmark was the posterchild for the wind industry. It has the largest share of wind power in its national grid, and is home to the industry giants, Vestas and Orstead — two of the world’s largest wind-manufacturers . Denmark is planning a large expansion in wind energy (or it was). But when the government offered up three areas of the North Sea that were described as “among the best in the world”, the deadline came and went last Thursday and not a single bid was received.
Wind energy is free and no one wants it…
This is a huge shift from the situation in 2021 when there were so many bids for one wind plant, it ended up being settled by a lottery.
Denmark Gets No Bids in Largest-Ever Offshore Wind Tender
By Sanne Wass and Will Mathis Bloomberg
High costs and power price risks made auction undesirable
The Danish Energy Agency didn’t receive a single offer by Thursday’s deadline in the tender to develop three offshore wind farms, it said in a statement. It will now initiate a dialog with the market to find out why.
Between the European Union and the UK, countries aim to have some 150 gigawatts of capacity by the end of the decade, more than quadruple today’s level. The failure of the Danish tender puts that goal further out of reach and similar struggles to attract new investment in neighboring Sweden show it’s not an isolated case.
“The green transition in Denmark has stalled right now,” Kristian Jensen, chief executive officer of industry group Green Power Denmark, said in a statement. “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 brown energy sources.”
One industry magazine is doing damage control, and blames the “Danish auction design”. But the key problem with their design apparently is that it doesn’t have billions of dollars of subsidies. The people of Denmark are not even paying for the grid connection…
So the free market is telling us that building wind towers in the ocean is a stupid way to make electricity.
No offshore bids in Denmark – disappointing but sadly not surprising
Wind Europe
Denmark’s latest 3 GW offshore wind auction round ended without any bids. That’s a huge disappointment for Denmark and for Europe’s wider energy security and electrification efforts.
Why did the Danish auction fail to attract bidders?
The main reason for the Danish auction attracting less industry interest than similar offshore wind auctions in Poland, the Netherlands and the UK lies in the Danish auction design.
The Danish auction system does not foresee any form of state support or revenue stabilisation model – such as the Contracts for Difference (CfD) used in many other European countries. Instead offshore wind developers are asked to pay for the right to build a wind farm. Denmark’s uncapped negative bidding creates an unhealthy race to the bottom and unnecessarily increases the upfront costs for offshore wind developers. On top of that Denmark does not pay for the grid connection to the offshore wind farms, instead developers have to take on these extra costs.
The European Union want to pave the oceans with wind turbines. At the end of last year they had 20GW of offshore wind, but they want that to grow to 60GW in just the next five years, and reach 300 GW by 2050.
If that’s going to happen, it will take monster subsidies to conquer the sea of apathy.
h/t Greg M