RWE, Germany, won on Wednesday a tender to construct Denmark’s largest wind farm, according to The Danish Energy Agency. It will also be the first offshore wind farm constructed with actual payments to Denmark.
After several bids at a minimum price were received, the lottery was used to draw the winner. This is a setback for Orsted in Denmark, the largest offshore wind developer in the world.
This tender demonstrates the fierce competition for renewable investment in mature markets, where costs have been driven down enough to compete with fossil fuels. It is possible to phase out subsidies for certain projects.
RWE will pay Denmark the first year of production until the cap of 2.8 billion Danish crowns ($426.48million) is reached. This cap is expected to be within a few more years.
The energy agency released a statement stating that “it is the first offshore wind farm constructed with payments to the state.”
One of the three largest offshore wind farms Denmark plans to build before 2030 is Thor, which will produce 1 gigawatt (GW), of renewable electricity. This is part of Denmark’s plan to reduce carbon emissions by 70% from 1990 levels by 2030.
Thor is expected to start producing electricity in 2026. Total investment costs are estimated to be 15.5 billion Danish crowns ($2.36 million).
Siemens Gamesa’s head warned that the decade-long race for lower costs to generate wind power cannot continue. This would make it less feasible for turbine producers to invest in new technologies.
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