Danish open-door offshore wind scheme labelled 'state aid' and rejected again

The Danish Energy Agency (Energistyrelsen) has re-rejected applications for offshore wind ‘exploration’ or ‘feasibility study permits’ under the country’s former open-door scheme, arguing that granting permits under the system would amount to illegal state aid under EU rules.

The agency this week issued decisions to 37 applicants for projects under the open-door scheme, rejecting the plans once more.

"It would be illegal state aid to grant a preliminary exploration permit that gives the applicant exclusive rights to a given sea area if the permit has value for the applicant and there has been no competition for the area,” said Stig Uffe Pedersen, deputy director general at the Danish Energy Agency.

“Ultimately, it is about complying with EU state aid rules.”

This week’s assessment is based on the bidders' willingness to pay in connection with the tender for the Thor offshore wind farm in 2021 and a subsequent sharply increasing interest in the open-door scheme, the Danish Energy Agency argued.

“It does not change the assessment that no bids were received for the areas in the North Sea in 2024, or that it has been decided to introduce a support model in the upcoming tender for 3GW offshore wind turbine projects,” Pedersen said.

“The terms of the government tenders with significant delay penalties and withdrawal penalties are more restrictive than the terms under the open-door scheme, and the assessment is therefore that it is still valuable to obtain a feasibility study permit for new commercial offshore wind projects under the open-door scheme.”

Wind power lobby Green Power Denmark had no comment on the decision.

In neighbouring Sweden, offshore wind permits are still being granted without a previous tender, but the system for years failed to foster the construction of new offshore wind farms.