Two new Danish offshore wind farms awarded to the Swedish energy company Vattenfall are expected to produce electricity equivalent to the annual consumption of at least 1.8 million households. The projects, located in the North Sea and the Kattegat, must be completed by the end of 2032.
The Danish Energy Agency (Energistyrelsen) announced on 4 August that Vattenfall had submitted the lowest bids for both Nordsøen Midt and Hesselø.
The two sites will provide a combined minimum capacity of 1.8 gigawatts. Nordsøen Midt will have a capacity of at least 1 GW, while Hesselø will provide at least 800 MW.
Where the new Danish offshore wind farms will be built
Nordsøen Midt will be located in the Danish section of the North Sea. Hesselø will be built in the Kattegat, north of the island of Hesselø.
The Danish Energy Agency initially stated that the second project would be located south of the island. It corrected the information on 6 August, two days after publishing the tender results.
Both wind farms must be fully operational by the end of 2032. Until then, Vattenfall will need to develop the final designs, conduct project-specific environmental assessments and obtain the necessary construction permits.
The estimate of 1.8 million households is a measure of expected electricity production rather than a description of who will receive the power. The Danish Energy Agency refers to the average consumption of Danish and other European households, reflecting Denmark’s integration into the wider European electricity market.
Vattenfall secured a guaranteed price for 20 years
Vattenfall offered a strike price of DKK 504 per megawatt-hour, approximately €68, for Nordsøen Midt. Its winning bid for Hesselø was DKK 542 per megawatt-hour, approximately €73.
Under the contracts, these prices will be guaranteed for 20 years after each offshore wind farm becomes operational.
The tenders use a two-sided contract for difference system. When the market price of electricity falls below the agreed strike price, the state compensates the producer for the difference. When the market price exceeds it, the producer generally pays the difference back.
The mechanism reduces the financial risk associated with fluctuating wholesale prices. According to the original tender conditions, the state’s net payments are capped at DKK 15.7 billion, around €2.1 billion, for Nordsøen Midt and DKK 21.9 billion, around €2.9 billion, for Hesselø.
The guaranteed price does not correspond to the amount paid by households. Consumer bills also include electricity market conditions, supplier charges, grid tariffs and taxes. The winning bids therefore do not automatically mean that electricity will become cheaper for Danish residents.
Competition was uneven between the two tenders
Five companies submitted bids for Hesselø, while the Danish Energy Agency received only two bids for Nordsøen Midt.
The difference reflects the continuing uncertainty surrounding large offshore wind investments. Rising construction and financing costs have made several European projects more difficult to develop under tender systems that transfer most commercial risks to energy companies.
Denmark revised its approach after an earlier offshore wind tender failed to attract any bids. The new tenders opened in November 2025 with public support, greater flexibility for developers and provisions intended to reduce their exposure to low electricity prices.
“It is very encouraging that we have now reached an important milestone with a positive result,” Stig Uffe Pedersen, deputy director-general of the Danish Energy Agency, said after the contracts were awarded.
A third offshore wind project remains open
Nordsøen Midt and Hesselø are part of a wider programme covering three offshore areas with a combined minimum capacity of 2.8 GW.
The third site, Nordsøen Syd, will provide at least 1 GW in the North Sea. The deadline for bids is scheduled for October 2028, and the wind farm must be completed by the end of 2034.
The two contracts awarded to Vattenfall give Denmark a clearer route towards expanding offshore wind production after the problems encountered by previous tenders. Their impact on consumers, however, will depend not only on the volume of electricity produced but also on future wholesale prices, grid development and the cost of the public support mechanism.
