The European Commission has approved a €5 billion (DKK 37.6 billion) Danish state aid scheme to support two offshore wind farms, the organisation said.
The scheme will run for 20 years and is intended to support the construction and operation of the Hesselø and North Sea I Mid projects, the Commission announced on Monday.
Hesselø is expected to have a capacity of at least 0.8 gigawatts (GW) and to generate around 3.2 terawatt hours (TWh) of electricity a year.
North Sea I Mid is expected to have a minimum capacity of 1 GW and to generate around 4.6 TWh a year.
Together, the two wind farms are expected to produce the equivalent of around 25% of Denmark’s total electricity production last year.
How the support will work
The aid will be delivered through a “two-way contract for difference” (CfD) — a mechanism that tops up revenue when market power prices are below an agreed level and requires paybacks when prices are above it, the Commission said.
Under Denmark’s model, support will be paid as a monthly variable premium calculated by comparing a bid price with a reference market price, weighted by the offshore wind farm’s monthly capability.
The Commission said the scheme will be awarded through a competitive bidding process and approved it under EU state aid rules.
