KPMG: Nearshore Wind Farms Cost-Cutters for Danish Industry

Developing nearshore wind farms brings significant savings to the community compared to offshore wind projects located more than 20km from the coast, according to an analysis done by KPMG for the Danish HOFOR and European Energy A/S.

According to the study, nearshore wind farms can help Denmark achieve a reduction of CO2 emissions by 70% by 2030 in a cost-effective manner.

The analysis, which sets out a number of scenarios where the upcoming 1GW Thor offshore wind farm is compared with five nearshore wind farms with a total corresponding capacity, shows a socio-economic gain of 2-14% for the combined nearshore wind farms when compared to the Thor project.

In particular, the development of nearshore wind farms is cheaper because of the shorter distance to the shore and lower water depth, as well as the connection to the electricity grid.

Additionally, local residents can become co-owners of turbines that are within 16km of the coast due to the purchase right scheme.

“From this analysis, it is reasonable from a socio-economic point of view, to establish nearshore wind as part of the Danish energy mix. The green transformation of our energy sector is a gigantic task that requires extremely large investments. Coastal sea wind can contribute to reducing the cost of future Danish offshore wind turbine capacity by billions,” said Jan Kauffmann, Director of Economics and Business at HOFOR.

The report also concludes that a setup of several smaller nearshore wind projects would increase the security of supply, as a breakdown of a cable connection to land will affect only one of the wind farms, as opposed to a large offshore wind farm where cable breakdowns can stop the supply of all electricity.

European Energy and HOFOR emphasize that it is obvious for Denmark to exploit the favorable wind conditions in the North Sea, but the country cannot count only on offshore wind to create the entire green transition as solar, onshore wind, nearshore wind farms and biogas have a natural place in the energy mix.

Last year, the Danish parliament unanimously voted for a new energy agreement which includes building three new offshore wind projects, the first of which is Thor, by 2030 with a total capacity of at least 2.4GW.

The up to 1GW wind farm will feature turbines with an individual capacity of between 13MW and 15MW and is expected to be commissioned between 2024 and 2027.