The European Commission (EC) has approved a €5bn ($5.7bn) scheme by the Danish Government to support the construction and operation of two new offshore wind farms.
The decision is part of the Clean Industrial Deal State Aid Framework (CISAF), which took effect on 25 June 2025.
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This measure is intended to help Denmark expand its renewable energy capacity and assist the EU in reaching its 2030 renewable energy targets.
The approved initiative will run for 20 years and focuses on establishing the Hesselø and North Sea I Mid offshore wind projects.
Hesselø is expected to have a minimum capacity of 800MW and produce approximately 3.2 terawatt-hours (TWh) of electricity per year.
The North Sea I Mid offshore wind farm will have at least 1GW of capacity and is projected to generate around 4.6TWh annually.
Together, the two wind farms will account for roughly a quarter of Denmark’s total electricity output, based on last year’s figures.
Under the scheme, assistance will be provided as a monthly variable premium through a two-way contract for difference.
Payments are calculated by comparing each project’s bid price with a reference market price, adjusted monthly according to the wind farm’s capability.
If market prices drop below the bid price, operators receive payments from authorities; if prices rise above it, operators must pay the difference back to the Danish Government.
According to the EC, the scheme aligns with the CISAF, noting compliance with both competitive bidding and electricity market design rules.
The aid takes the form of direct price support linked to potential production values rather than actual generation, preventing compensation when production carries negative market value.
EU Commission Clean, Just and Competitive Transition executive vice-president Teresa Ribera said: “With this €5bn scheme, Denmark will be able to deploy offshore wind capacities faster, in line with the Clean Industrial Deal.”
