Denmark's largest offshore wind auction yet received 0 bids last week. What are the key reasons and what will the result mean for the ongoing next auction with deadline 1 April 2025?
The long-awaited result of the first stage of the largest Danish offshore wind auction yet was announced last Thursday, 5 December. However, the Danish government received no bids for the three North Sea I sites (with a combined capacity of 3 GW), which sent a wave of disappointment across offshore wind stakeholders.
While many have already pointed toward the general notion of challenging economics, an assessment of the many risk factors such as high delay penalties and route to market that characterized the Danish auction framework, is less discussed.
Aegir Insights' newly published report, accessible for our clients, analyzes a series of the most important risk factors from the Danish auction framework and assesses their impact on the overall business case, which among others have contributed to the auction result.
While a market dialogue started for the first unsuccessful auction, the next three projects of min. 2.8 GW are still scheduled to be auctioned on 1 April 2025 under the same auction conditions.
Interested in getting a glimpse of our new analysis?
Reach out to us here to learn more.
Warning signs ahead of auction
Back in September Aegir Insights’ Co-founder and CCO Rikke Winther Nørgaard had a conversation with Finans about the North Sea I offshore wind auction in Denmark, discussing bid requirements, and how the auction's attractiveness compares to other ongoing opportunities in the North Sea.
You can listen to the podcast here [in Danish].
Ahead of the auction result, there have been some warning signs that Denmark's largest offshore wind auction yet could be at risk. Aegir Insights' analysis and bid simulation using our techno-economic tool Aegir Quant showed that returns could be as low as 3 to 6% on even prime sites.
Reach out to us to learn more about Aegir Insights' advanced commercial tool kit which helps governments and developers make the best investment decisions.
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