Denmark's 2024 offshore wind auction failed. No awards were issued. Rising capital costs, higher interest rates, and continued pressure on manufacturers made the previous framework financially unworkable.
The 2025 redesign is a structural response. Three sites are on offer — Hesselø (0.8 GW), North Sea Mid (1.0 GW), and North Sea South (1.0 GW) — each with its own risk profile and competitive dynamics. The underlying CfD mechanism has been rebuilt from scratch.
Revenue Based on Capability, Not Production
The core innovation of the 2025 framework is Europe's first capability-based two-way CfD. Settlement is linked to Available Active Power (AAP) — a measure of what the wind farm *could* have produced given wind conditions and technical readiness, rather than what it actually delivered to the grid.
This matters for two reasons. First, curtailment and grid constraints no longer erode CfD revenue the way they would under a production-based mechanism. Second, negative market prices are treated as zero. Support is not paid during negative-price periods. The model improves revenue predictability and increases the commercial value of high turbine availability, strong SCADA systems, and accurate forecasting.
The implications run through the whole supply chain. AAP-based settlement elevates data quality, monitoring systems, and turbine control capability from operational considerations to bid differentiators.
The Critical Path Runs Through Brussels
Denmark submitted its EU State Aid notification on 30 June 2025. European Commission approval is expected no later than 1 March 2026. Awards cannot be issued before that decision.
For Hesselø and North Sea Mid, the bid deadline is 20 May 2026. That timeline is achievable — but only if approval arrives on schedule. Any delay shifts the award window, which in turn delays when financing can be closed and early supply chain commitments can be made. The critical path for the 2025 tender is a regulatory one, not a technical one.
North Sea South operates on a separate timeline. Its bid window does not open until 2028.
The full Denmark 2025 Strategic Brief covers the three sites in detail, AAP mechanics, the qualitative evaluation criteria, competitive landscape expectations, and supply chain implications. Get the brief →