Denmark Completes Successful Offshore Wind Farm Tender Using New Approach

Denmark offshore wind farm — Denmark completed it first tenders in two years after reworking its approach

The Danish Energy Agency awarded two new contracts for offshore wind farms to Vattenfall, marking a critical success after it reworked its contracts. It is the first time in two years that Denmark has successfully completed tenders after winning government approval for a revised approach to encourage greater industry participation.

The last tender, which was launched in 2024 for six areas, failed to attract bids. The Danish Energy Agency was forced to cancel the tender, as it reported that, as the deadline approached for the first three sites, it had not received bids. It launched a political debate that resulted in two agreements in 2025 and the adoption of the Contract for Difference (CfD) approach, where the state guaranteed a fixed price for the electricity. If the price falls below the contract, the government will provide a subsidy, and if it exceeds the price, the operator reimburses Denmark.

The approach has worked successfully in the UK, and more countries were encouraged to adopt it to address the challenges in the offshore wind energy sector. When the Danes relaunched the tender in November 2025, they said the CfD, along with other changes, provided greater flexibility for developers and reduced the risks to increase the likelihood of bids.

"The Danish Energy Agency has conducted an extensive market dialogue and tender process on the construction of two new offshore wind farms in the North Sea and Kattegat. It is very pleasing that we have now reached an important milestone with a positive result, where we can announce the winners of the tenders," says Deputy Director General of the Danish Energy Agency, Stig Uffe Pedersen.

The agency reported on August 4 that it had received two bids for Hesselo, an 800 MW site in the Kattegat. Nordsøen Midt, a site in the North Sea that can support 1 GW, received five bids. The government is offering 20-year leases from completion and requiring the projects to be completed by the end of 2032.

Hesselo will be located approximately 19 miles from the coast. Nordsøen Midt will be located approximately 12.5 miles offshore.

Vattenfall was selected as the winner for both projects. For Nordsøen Midt, it bid 504 kroner per MWh ($77.75), and for Hesselo it bid 542 kroner ($83.60). These were the lowest of the bids for each location. In addition, the bids required sustainability and social responsibility components, including a requirement to recycle turbine blades. Hesselo must also establish a so-called nature-inclusive design.

Vattenfall said the projects would strengthen its offshore portfolio. The company currently operates five offshore wind farms in Denmark, generating around 6.5 TWh of electricity annually. It reports that the grid connections have been reserved for the two new projects, saying the consent will be granted for 30 years with an option to extend it by a further 10 years.

Denmark has a long history with wind energy, and it was the first country to host an offshore wind farm, which was commissioned in 1991. Currently, it has a total installed capacity of 2.7 GW of offshore wind power, with one additional wind farm under construction to add another 1 GW in 2027. As part of this current tender, it also offered a third site, Nordsøen Syd, which will have a capacity for a minimum of 1 GW, and it has a bid deadline of October 2028.