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Who will win the lottery? Denmark’s Thor offshore wind concession to be decided next week
The Danish Energy Agency has confirmed it will award a licence to develop the €2.1Bn (US$2.3Bn) Thor offshore windfarm by means of a 1 December 2021 lottery
It is doing so because a large number of companies and consortia have bid to build the project and agreed to do so without a subsidy. They have also all bid to build the maximum capacity set for the windfarm, 1 GW. The Agency sought bids for a windfarm with a capacity ranging from 800 MW to 1 GW.
Drawing lots in the event of multiple compliant bids was set out in the tender conditions. According to those conditions, the concession is to be awarded to the bidder that offers the lowest bid price and, if there are several bidders coming in at the same price, the bidder proposing the windfarm with the largest capacity wins. If both bid price and windfarm capacity are the same, as has turned out to be the case, the tender is to be decided by drawing lots.
The process will be supervised by an independent auditor and the Danish state legal advisor, Kammeradvokaten,to ensure that it meets the procurement rules. A winner will be announced on the day the lottery process takes place.
In a statement, the Agency said a number of bidders offered the minimum price set for the project of Dkr0.01/kWh – which is to all intents and purposes a subsidy-free bid.
The companies and consortia that have qualified to participate in the lottery include: Iberdrola and Total; SSE Renewables and Copenhagen Infrastructure Partners; Eneco and European Energy; Vattenfall; Orsted; and RWE.
Thor will be Denmark’s largest offshore windfarm and is due to enter into operation in 2027. It is the first of the three offshore windfarms to be established under the Danish Energy Agreement of 2018. It will be built in the North Sea at least 22 km from the coast.
The grid connection window for Thor opens on 1 January 2025 and the windfarm must be fully established and connected to the grid by the end of 2027 at the latest. The concession authorises its operation for 30 years with the possibility of a five-year extension.
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