Denmark Rejects Several Offshore Wind Project Applications

The Danish Energy Agency has rejected several applications for new offshore wind farm projects under the open door scheme as they overlap with the areas that have been identified and reserved for future state auctions.

In the period between the beginning of April 2022 and 20 June 2022, the Danish Energy Agency has received a total of 27 applications for new offshore wind projects under the open door scheme.

At least 15 applications have been submitted by four developers: Andel, Anker Development ApS, European Energy A/S, and Wind Estate A/S, the agency told offshoreWIND.

The agency has found that a large number of projects for which the applications for feasibility study permits have been submitted overlap with the areas pre-reserved for government calls for tenders.

The applications in question have been proposed in areas such as Aalbæk Bay, Esbjerg, Falster, Hanstholm, Hirtshals, Stevns, Tønder, and Djursland.

Denmark’s law on the promotion of renewable energy states that projects submitted under the open-door scheme cannot completely or partially overlap with the areas previously identified and reserved by the state for future tenders and must be rejected by the Minister of Climate, Energy, and Utilities.

On that basis, the Danish Energy Agency has canceled the authority hearings on the offshore wind farms at Hanstholm, Stevns, and Falster.

Under the open-door scheme, developers can apply to build projects at a location of their choice, instead of competing to build a project at a specific location and of a specific size, which is typically offered through dedicated state tenders.

Through this procedure, project developers can submit an unsolicited application to obtain permission to carry out feasibility studies in their selected area.

To build the projects, offshore wind developers need to obtain three permits from the Danish Energy Agency: the feasibility study permit, a construction permit, and a permit for electricity production, with each permit being a prerequisite for the next as the project progresses.

In the first step, the project developer must submit an unsolicited application for a license to carry out preliminary investigations in the given area. The application must as a minimum include a description of the project, the anticipated scope of the preliminary investigations, the size and number of turbines, and the limits of the project’s geographical siting. In an open-door project, the developer pays for the grid connection to the land.

An open-door project cannot expect to obtain approval in the areas that are designated for offshore wind farms, the Danish Energy Agency said.

Electricity produced by wind farms under the open-door-procedure will receive a price premium at the same level as onshore wind turbines. The premium is DKK 250/MWh (EUR 33.6/MWh) on top of the market price. If the market price added to the subsidy exceeds DKK 580/MWh, the subsidy will be reduced accordingly.

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