A broad political agreement in Denmark aims to revitalize offshore wind energy by establishing three new offshore wind farms, backed by a massive state guarantee of up to DKK 55.2 billion (approximately EUR 7.4 billion). The agreement, which includes the Danish government and multiple parliamentary parties, seeks to solve a persistent obstacle: fluctuating electricity prices that have discouraged companies from bidding on offshore wind projects.
Guaranteed electricity prices to attract investors
To tackle price volatility, the deal introduces a price guarantee on electricity. This mechanism ensures that companies building the new offshore wind farms will receive a minimum price for their electricity, thereby reducing financial risk and incentivizing participation. While the estimated cost to the Danish treasury is around DKK 27.6 billion (EUR 3.7 billion), a cap has been set at DKK 55.2 billion to limit fiscal exposure.
The initiative includes 3 gigawatts of new capacity, distributed across three offshore wind farms. Each installation is expected to feature 150 turbines of 20 megawatts each, with the first two parks scheduled for completion by 2032 and the third by 2033.
Impact on Denmark’s CO2 accounting
Despite the scale of the investment, the new wind farms will not directly reduce Denmark’s domestic CO2 emissions, according to Climate Minister Lars Aagaard. “In isolation, it doesn’t reduce anything in Denmark, because we do not expect to produce electricity from fossil fuels by 2030,” he told Ritzau.
However, the electricity generated will be integrated into the European power market, supporting the transition to renewable energy across the continent. Aagaard noted potential long-term CO2 benefits, as industrial sectors may shift away from gas and oil, thanks to increased availability of green electricity.
Strategic importance for Europe and the energy market
This landmark deal underscores Denmark’s strategic role in the European green transition and energy security. By enabling large-scale offshore wind production, the country contributes to stabilizing electricity prices and reducing dependence on fossil fuels—goals that resonate strongly across Europe amid energy market uncertainties and climate imperatives.
With price guarantees, clear timelines, and significant state backing, Denmark sets a precedent for public-private collaboration in the renewable energy sector, hoping to re-ignite investor interest and keep the offshore wind momentum alive.
