Landmark political agreement paves the way for the world's first offshore wind energy hub
On 4 February 2021, the Danish Government together with a broad coalition of parties in the Danish Parliament concluded an agreement which will pave the way for construction of the world's first offshore wind energy hub based around an artificial island to be constructed in the Danish part of the North Sea.
The project will include the construction of an artificial island 80 kilometres off the coast of Jutland and serve as a hub for up to 10 GW of offshore wind capacity as well as Power-to-X and battery storage technologies.
Below is a high level summary of the main elements in the political agreement:
- The project is intended to be a public-private partnership
- The Danish State will be the majority shareholder of the project, unless an upcoming market dialogue proves that a minority stake is of better interest to the Danish State
- One or more private parties will be invited to participate in a public tender for a minority ownership stake
- The Danish TSO, Energinet, will own and operate the transmission assets
- The artificial island will initially support 3 GW of offshore wind capacity connected to the island
- Offshore capacity connected to the island will gradually be expanded to 10 GW
3. Connected to Europe:
- The island is intended to be connected to one or more countries in Europe and will therefore also act as an export hub for both electricity generated from the surrounding offshore wind farms but also for liquid green fuels, e.g. hydrogen, generated from the electricity produced by the windfarms
4. Critical infrastructure:
- The island will be regarded as so-called critical infrastructure which means that we expect the potential minority owners will be subject to and have to accept certain restrictive selection criteria during the tender process
- The aim is for the artificial island and the first 3 GW of offshore wind capacity to be finalised by 2033
It will be interesting to follow the upcoming market dialogue and discussions with nearby countries about connection to the hub.
The next steps for the coalition behind the political agreement is to establish the required regulatory framework for the energy hub, including the framework of the tendering process to select the private sector partners for the project, the tender framework and conditions for the surrounding offshore wind farms to be connected to the hub.