German energy company to build Denmark’s largest green project – got the contract after the draw
On Wednesday, it was decided that the German energy company RWE will build Denmark’s largest green project to date – an offshore wind farm which has been nicknamed Thor and which will be located outside Thorsminde on the west coast of Jutland.
However, in competition with, among others, Danish Ørsted, Swedish Vattenfall and a Total Energies-led consortium, it was the German giant that secured the contract. On the other hand, RWE was not chosen because they had the best bid, but simply because they won a draw that was held on Wednesday.
– Thor will not only be Denmark’s largest offshore wind farm to date, but also one of the world’s largest parks, and will help lift Denmark into a new era, says Climate Minister Dan Jørgensen in a press release according to the newspaper Berlingske.
The park will also be the first not to receive state support, and could supply one million Danish households with electricity. It is scheduled to be completed in 2027.
According to Berlingske, the investment costs must be estimated at more than DKK 15 billion.
Pays billions
In total, six companies or consortia offered to build the wind farm to the full capacity of 1000 megawatts, and to the lowest possible electricity price of 0.01 Danish øre.
It was decided by a lottery because all the bidders had a bid for maximum capacity at the lowest price.
Berlingske writes that the project will be a goldmine for the Danish state when the power starts to fly, due to the contract model that has been chosen. According to the newspaper, the “Contract for Differences” means that when the market price of electricity is below the bid price, the state will pay the difference to the company that built the park.
However, if the market price of electricity is above the bid price, the company behind the park must pay the difference to the state. Given that the bid price is 0.01 Danish øre, RWE will pay up to 2.8 billion Danish kroner, Berlingske writes. After this sum is paid, the profits will go into the pocket of RWE for up to 30 years.
Matched the bid
Danske Ørsted tells the newspaper that they are annoyed that they have lost the draw.
– We matched the winning bid, so we are naturally disappointed that the draw did not go our way, says regional director Rasmus Errboe in a written statement to Berlingske.
The drawing of lots was carried out under the auspices of the Directorate of the Danish Energy Agency and under the supervision of an independent auditor, as well as the Chamber Advocate. The latter is the Danish state’s permanent lawyer. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our stuff using a link that leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For further terms see here.