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Denmark to Establish Energy Islands in the North and Baltic Seas

Denmark is among the countries with the most active development in wind energy and was one of the first to build an offshore wind farm. The country is also home to many experienced offshore wind companies which benefit from the country’s suitable location for exploiting this technology. Now, the government and the industry are planning a cooperation to launch a truly impressive project.

In 2021, following the Climate Agreement for Energy and Industry of the 22th of June 2020 the Danish Government has agreed to take wind power one step further and construct two energy islands with a total capacity of 5 GW of offshore wind in Denmark. By definition, the concept of energy islands comprises either an existing island, the construction of an artificial island, or an island based on a platform, which are used as hubs for electricity generation from surrounding offshore wind farms. The islands will be connected to the grid and deliver energy to Denmark as well as neighbouring countries. It is also planned for them to host other structures for producing energy, such as, for example, hydrogen or electrolysis plants, or equipment for energy conversion (for instance PtX).

Experts estimate that the construction of the islands will be completed by 2030. One of the energy islands with a capacity of 3 GW will be built in the North Sea. This island will be extended in stages, as power demand is likely to increase when the grid will be expanded to include neighbouring countries. The other island will be established on the island of Bornholm with a capacity of 2 GW.

The bigger island, situated 80km from the Jutland peninsula in the North Sea, will serve as a hub for 200 giant offshore wind turbines. It is expected to have a total area of 120.000 square metres and be able to provide 3m European households with electricity. This is the biggest construction project in the history of Danish wind power, with an estimated cost 210bn of kroner (€28bn).The island will be protected from North Sea storms on three sides by a high sea wall, with a dock for service vessels on the fourth side. A public-private partnership between the Danish state and private companies will finance the project. The State will own the majority of the project, holding a 51% stake. Private companies will be responsible for its technical aspects concerning innovation, flexibility, cost-effectiveness and business potentials. The smaller energy island, situated in the Baltic Sea, to the east of mainland Denmark (Bornholm), meanwhile, will, among other things, be used to easily supply energy to countries such as Germany, Belgium, and the Netherlands.

The history of wind-power in Denmark dates back to the late 19th and early 20th century when the countrywas among the pioneers of developing electricity-producing wind turbines. The modern phase of Danish wind power, however, started after the oil crisis in 1973 and was initiated by small industrial entrepreneurs supported by the government. During the eighties the development of wind power slowed down a bit, as the costs of installing turbines increased due to technological advancements, while the investment subsidies from the state were gradually phased out. Also, conflicts between utilities and wind power producers over tariffs arose. In
addition, many local municipalities set up administrative barriers for wind turbines. These barriers were removed by government intervention in the early nineties when favourable feed-in tariffs were introduced as well as easy access to the grid. As a result, wind power became a quicklyexpanding branch of industry in the Danish market. This development was also favoured by the decision of the Danish government to minimize carbon emissions by 22% from 1988 until 2005, as well as imposing a ban on constructing nuclear power plants in 1985.

The two energy hub projects create a lot of opportunities for the development of efficient and sustainable energy structures: first and foremost, they can be easily combined with other energyrelated infrastructure, comprising, for example, a harbour and facilities for storage and direct conversion of green electricity from the nearby wind turbines in the sea. Via subsea cables this energy can then be sent not only to Denmark, but also to neighbouring countries and support them to reach their climate targets sooner.

The government is planning to enter into discussions with wind farm developers and other companies and investors as soon as possible in order to develop a legal framework for tendering the remaining 49% stake. Construction of the islands is expected to start in 2026, with the next five years spent signing up private sector partners, carrying out environmental impact assessments on the seabed, and signing deals to connect the two energy islands to other countries.