The Bornholm Energy Island (Energiø Bornholm) is set to move forward after Denmark and Germany reached a long-awaited agreement on how to share the public support needed for the project, announced at the North Sea Summit in Hamburg on 26 January 2026. The deal aims to unlock a competitive tender for 3 GW of offshore wind in the Baltic Sea and to build a power hub on Bornholm that can send electricity to both countries.
What Denmark and Germany actually agreed on
The agreement focuses on the support scheme for the offshore wind capacity connected to Bornholm Energy Island, after months of negotiations over how the costs and benefits should be divided.
According to Denmark’s Ministry of Climate, Energy and Utilities (Klima-, Energi- og Forsyningsministeriet), Germany will cover 70% of the offshore wind support costs and Denmark 30%. The project will be tendered with a two-sided Contract for Difference (CfD), meaning developers would be compensated if market prices fall below an agreed strike price, while paying money back if prices rise above it.
The ministry’s fact sheet also sets out the scale of the financial framework: Denmark’s estimated support need is DKK 23 billion (about €3.1 billion), while the joint support cap is DKK 139 billion (about €18.7 billion) with a Danish share of DKK 41.7 billion (about €5.6 billion). The cap is presented as a maximum “insurance” against higher costs or lower revenues, not as the expected final bill.
Why the project needed a new support model
Bornholm Energy Island was designed in an era when developers in parts of Europe were still bidding for offshore wind without subsidies. That market has shifted.
Denmark’s wider offshore wind programme took a major hit in late 2024, when the Danish Energy Agency announced it had received no bids for any of three North Sea offshore wind sites in a major tender. The failure underscored how higher interest rates, supply-chain pressures and electricity price uncertainty have changed the economics of large offshore projects.
Against that backdrop, the Bornholm project’s new model is meant to reduce risk for investors while ensuring that the country expected to consume more of the electricity—Germany—also shoulders more of the support burden.
How the 70/30 split and the two-sided CfD would work
Danish officials have framed the agreement as a precedent: two countries jointly financing the support for a single offshore wind development.
In practice, the two-sided CfD is intended to stabilise revenues for the developer and limit taxpayer exposure when prices are high. If wholesale power prices are low for a long period, the two states would compensate the developer up to the strike price. If prices are higher, the developer would pay the difference back to the states.
The cost split is presented as reflecting expected electricity flows and the distribution of benefits. Technically, the setup is built around a hub on Bornholm and high-voltage direct current infrastructure: a cable link to northern Germany and a separate link to Zealand, allowing power to flow to where it is most valuable in the market.
What the grid link means for Bornholm, Zealand and northern Germany
Bornholm Energy Island is both an offshore wind build-out and a major grid project.
The EU executive, the European Commission, describes it as a first-of-its-kind scheme that connects 3 GW of offshore wind generation to both the Danish and German grids—turning offshore wind from a national resource into a shared European one.
On the Danish side, the project is closely associated with hopes of strengthening supply and easing price pressures in eastern Denmark, including Zealand, by increasing the amount of power that can be routed into the region.
Operationally, the project is being developed by the transmission system operators Energinet (Denmark) and 50Hertz (Germany). Industry reporting has described the connection as designed for 2 GW of transmission to Germany and 1.2 GW to Denmark via Zealand.
EU money, Energy Highways and the wider Baltic Sea push
Bornholm Energy Island is not only a bilateral project: it has been prioritised at EU level as cross-border infrastructure.
The European Commission has backed the project with a €645 million grant from the Connecting Europe Facility (CEF)—described as one of the largest CEF energy infrastructure grants. Danish authorities put the EU support at DKK 4.8 billion (about €645 million), with Denmark expected to receive the largest share of that funding.
In January 2026, the Commission framed the Denmark-Germany agreement as an early delivery of its Energy Highways initiative, part of the European Grids Package presented in late 2025. For Brussels, the project is a test case for how offshore wind hubs and interconnectors can support energy security and electrification across borders.
What happens next in the Folketing and in Berlin
The agreement reached in Hamburg does not close the file.
Danish Minister for Climate, Energy and Utilities Lars Aagaard has said he will seek backing from the political parties behind earlier Danish energy island agreements. The two governments also plan to work in the coming months on the detailed tender design—including the CfD parameters and bid cap—to ensure a competitive process.
For Denmark, the next steps include securing domestic political support and aligning the tender timeline with grid and permitting work. For Germany, the project is tied to broader efforts to accelerate offshore wind and strengthen grid links to neighbouring countries.
If the tender succeeds, Bornholm Energy Island would become a practical benchmark for future cross-border offshore wind projects in the Baltic and the North Sea—especially at a time when European governments are trying to scale renewables while keeping costs, industrial competitiveness and energy security on the same page.
