Denmark offshore wind auction results: Vattenfall sweeps both sites

Vattenfall won both the Hesselø and North Sea I Middle sites in the first phase of Denmark's offshore wind auction, totaling 1.8 GW.

After the 2024 auction failed to attract a single bid, the Danish government abandoned its zero-subsidy model in favor of a support scheme that reduced developer risk. The shift paid off: Vattenfall was awarded two of the three sites, adding 1.8 GW to Denmark's offshore wind pipeline.

Budget size, not site conditions, decided where bidders competed hardest

Bidder interest was strong but uneven. The auction drew seven bids, five for Hesselø and two for North Sea I Middle. Vattenfall emerged as the lowest bidder for both sites.

Hesselø's comparatively larger support budget outweighed North Sea I Middle's stronger site conditions, resulting in a more attractive business case. The outcome suggests that while winning bids were lower than expected, developers in general remain selective about lower-return projects.

Vattenfall reinforces its position as the leading developer in the Danish offshore wind market

Vattenfall already has a strong presence in the Danish offshore wind market with ownership of close to 40% of the operational and under-construction project capacity.

Aegir's analysis shows the winning strike prices are aggressive relative to recent European offshore wind auctions. The outcome reinforces Vattenfall's leadership in the Danish market, where existing O&M infrastructure and ownership of both sites create valuable synergies. However, the bids still appear to reflect a strategic move to strengthen its market position.

Remaining auction site, North Sea I South, remains economically challenged at current cost levels

The two awarded projects are scheduled to start construction by December 2031 at the latest and reach COD by the end of 2032 to avoid delay penalties. However, the auction imposes relatively modest penalties for delays during the first two years, leaving some flexibility for schedule slippage. This contrasts with the previous unsuccessful Danish offshore wind auction.

The bidding window for North Sea I South remains open until October 2028, allowing potential bidders time to evaluate the auction outcome and monitor market developments over the coming years. With a significantly smaller budget than North Sea I Middle and Hesselø, the project is likely to require overall cost reductions and improved investor confidence to become commercially viable.

Read the full analysis

Aegir Insights clients can read the full insight, including the winning strike prices, Aegir Quant™ project IRRs for both sites and the European return benchmarks, on the Aegir Platform: Vattenfall sweeps Denmark's 1.8 GW auction.

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