The 5th of December marked the deadline for bids in the first round of Denmark’s 6 GW offshore wind auction, aimed at accelerating the country’s energy transition. However, the Danish Energy Agency confirmed that no bids were received for the three sites offered in the North Sea, a significant setback for the sector.

The Minister for Climate, Energy and Utilities, Lars Aagaard, has tasked the Danish Energy Agency with engaging in dialogue with industry players to understand the reasons behind this outcome. This follows initial interest expressed by several companies during pre-auction consultations earlier this year.

The three wind farms auctioned in the first round (North Sea I A1, A2, and A3) were designed to leverage the exceptional conditions of the North Sea, known for its steady winds and shallow waters, which facilitate turbine installation. However, the absence of bids highlights the challenges currently facing the offshore wind sector, including rising turbine costs, inflation, and high interest rates.

Kristian Jensen, CEO of Green Power Denmark, described the result as «a major setback for Denmark’s green ambitions», adding: «This failure delays the goal of energy independence and hampers the country’s green transition.»

Background on the offshore wind initiative

Denmark, a leader in renewable energy, currently has an installed offshore wind capacity of 2.7 GW. The 6 GW auction, divided into two rounds, represents the country’s most ambitious effort to expand this capacity.

In the first round, the three North Sea wind farms were offered without state subsidies and required a 30-year annual concession payment. Additionally, the Danish government planned to retain a 20% minority ownership stake in each project. While these terms emphasised sustainability and social responsibility, they appear to have deterred potential investors.

The second round includes three wind farms located in Danish coastal waters (Hesselø, Kattegat, and Kriegers Flak II) with a combined capacity of between 2.8 and 3.2 GW. The deadline for bids in this phase is the 1st of April 2025.

Lessons from successful international auctions

Green Power Denmark noted that, while economic factors play a role, «the lack of state incentives is equally significant». Countries such as the UK and the Netherlands have secured successful offshore wind auctions by offering subsidies and state-funded grid connections. These measures have created more favourable conditions for investors.

«In Denmark, investors face uncertainty over whether they can sell electricity at a reasonable price,» said Jensen. This insecurity is compounded by the slow transition to electrified heating systems and industrial processes, as well as limited clarity in the hydrogen market.

Impact on green goals and the future of the transition

The lack of bids poses a critical challenge to Denmark’s ambitions of achieving 100% renewable electricity by 2030. «The green transition will continue, but Denmark risks falling behind,» Jensen warned. He added that this setback would prolong reliance on fossil fuels and undermine the competitiveness of wind energy.

In light of this, Green Power Denmark has urged policymakers to «recognise that wind turbines are not cash machines but essential tools for ensuring energy independence and combating climate change.»

Next steps 

The Danish Energy Agency and Parliament are already evaluating measures to prevent a repeat of this failure in upcoming auctions. Industry stakeholders are calling for state-funded grid connections and financial guarantees to attract investors.

Meanwhile, bids for the second round, representing another 3 GW of offshore capacity, will remain open until 2025. The outcomes of this phase will be critical in determining whether Denmark can reclaim its leadership in the global energy transition or whether existing barriers will continue to hinder its progress.