Denmark has temporarily paused the ambitious energy island project in the Baltic Sea near Bornholm, as well as all ongoing tenders for offshore wind farms, after failing to attract any bidders for its latest auctions. Climate and Energy Minister Lars Aagaard announced that the government will revise its funding rules, acknowledging that current market conditions make it unfeasible to build offshore wind turbines without subsidies.
The Baltic Sea energy island was envisioned as a key component of Europe’s renewable energy transition, supplying large parts of Germany with green electricity. The project, with a projected output of 3.3 gigawatts, was initially scheduled for completion by 2030. However, the framework necessary to proceed with the next phase was not finalized in time.
Aagaard also pointed to Germany’s political uncertainty as a contributing factor. He said, “As soon as a new German government is in office, Denmark is ready to enter into a dialogue on how Danish offshore wind energy can best contribute to meeting the new German government’s demand for green electricity.”
The project’s progress has been further hampered by a dispute over financing the undersea cable infrastructure needed to transmit electricity to Germany. Denmark sought to renegotiate terms with Germany due to rising costs, while the German transmission operator, 50Hertz, highlighted uncertainties about which country would compensate wind farm operators for potential losses in case of line failures.
In an effort to salvage the project, the European Union has stepped in with €645 million in funding from its Connecting Europe program. These funds will support the development of the world’s first hybrid direct current interconnector between Denmark and Germany, a crucial element of the project.
This setback follows earlier delays to Denmark’s larger North Sea energy island project, which was recently postponed until at least 2036 due to cost and logistical challenges. Despite these issues, Denmark remains a leader in renewable energy but faces growing financial and political hurdles in its offshore wind ambitions.
Minister Aagaard expressed optimism that adjustments to funding models and renewed cooperation with Germany could revive the Baltic Sea project, but no definitive timeline has been set. For now, Denmark’s energy transition efforts face significant obstacles as it grapples with balancing market conditions and international collaboration.
