2 Danish Wind Projects Get European Commission Approval for $5.8B State Aid

The European Commission has granted clearance under European Union state aid rules for a EUR 5-billion ($5.78 billion) Danish package for two proposed offshore wind projects.

The projects are North Sea I Mid, planned to have a capacity of at least 1 gigawatt (GW) or about 4.6 terawatt hours (TWh) a year, and Hesselø, expected to have a minimum production of 0.8 GW or 3.2 TWh per annum.

"The combined annual production of these two wind farms will represent the equivalent of around 25 percent of last year's total electricity production in Denmark", the Commission said in a press release.

The support will be disbursed as a monthly variable premium under a two-way contract for difference (CfD). "This will be calculated by comparing the bid price to a reference market price, weighted by the monthly capability of the offshore wind farm", the Commission said.

"The beneficiaries will receive payments when the reference price is below this bid price. When the reference price is above the bid price, the beneficiaries will have to pay the Danish authorities".

"The Commission found that the Danish scheme meets the conditions of the CISAF (sections 3 and 4.1.2)", the Commission added, referring to the Clean Industrial Deal State Aid Framework. "In particular, the aid will be provided as direct price support, through a capability-based two-way CfD, which will be awarded via a competitive bidding process.

"The compensation will be granted for the potential electricity production that the wind farm could have produced rather than for its actual production. This design ensures that the market functions properly and that the scheme does not compensate producers for production in any periods in which the market value of that production is negative, in line with the EU's electricity market design rules".

The CISAF, which the Commission adopted June 25, 2025, allows state aids that aim to scale up renewable energy and low-carbon fuels, decarbonize industrial processes, expand clean technology manufacturing, temporarily hold down electricity prices and derisk private investments in the energy transition.

The two wind farm projects are among three that the Danish Energy Agency opened for bids late last year.

Along with North Sea South, the projects have a planned capacity of at least 2.8 GW in total, enough for about 3 million Danish and European homes, the agency said in a media release November 20, 2025.

Denmark initially offered six areas for tender in 2024. "By the end of the deadline for the first three areas, the Danish Energy Agency had not received any bids", the agency said. Subsequently it held several market dialogs that formed the basis of two political agreements last year.

"The new 2.8 GW offshore wind tenders are based on the agreements", the agency said.

It said the three projects must be completed between 2032 and 2034.

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