Denmark - Construction work - Hesselø Offshore Wind Farm

The Danish Parliament has in recent years agreed to a large expansion in offshore wind farms in Denmark. The aim is to ensure the green transition and strengthening the future security of supply of energy in Denmark. The political agreements that this procurement concerns are: - Climate Agreement from 29 June 2018, - Climate Agreement from 22 June 2020, - the Financial Act from 4 December 2022, - Climate Agreement regarding green electricity and heat from 25 June 2022 - Additional Agreement on the procurement details regarding 6 GW offshore wind and Energy Island Bornholm from May 30 2023, and - Agreement on procurement frameworks for three offshore wind farms from 19 May 2025 as adjusted on 7 November 2025. This procurement concerns the establishment of one (1) new large-scale offshore wind farm named Hesselø, pursuant to the directive 2014/24/EU on public procurement as implemented into Danish law by the Danish Public Procurement Act, cf. consolidated act no. 116 of 3 February 2025 with later amendments (in Danish: Udbudsloven). The procurement procedure applicable to this procurement constitutes an open procedure, cf. section 56 of the Danish Public Procurement Act. The Concessionaire is granted a right and obligations to utilise the concession area for the establishment and operation of an offshore wind farm with a minimum capacity of 800 MWh for the purpose of producing and distributing electricity at the sole risk and expense of the Concessionaire. Notwithstanding the foregoing, the concessionaire of Hesselø Offshore Wind Farm, will be economically supported for the electricity produced from the minimum capacity by a capability based two-way contract for difference (“CfD”) scheme for a period of 20 years. Under the capability-based two-way CfD scheme, the Concessionaire must make payments to the Danish State in months where the strike price (equal to the “bid price” of the Successful Tenderer) is lower than the reference price (to be calculated by the DEA as the weighted monthly average of the day-ahead prices, weighted by the maximum power production capability of the turbines or “Available Active Power” as further set out in the procurements material). There is no cap on the payments from the Concessionaire to the Danish State, and the Concessionaire has no option to opt out of the capability-based two-way CfD scheme. Correspondingly, in months where the strike price is higher than the reference price, the Concessionaire will receive subsidies up to cap of 21.9 billion DKK excl. VAT (2025-prices) in the form of payments from the Danish State. Reference is made to the Annex F (Concession Agreement) and Appendix 3 (Capability-Based Two-Way Contract for Difference) for an overall description of the principles in capability-based two-way CfD scheme. The scheme constitutes State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union (TFEU). Please note that the name of the offshore wind farm can be changed by the Danish Energy Agency (“DEA”). Such change will not affect the geographical location of the offshore wind farm. Hesselø will in the following be called “the Offshore Wind Farm”. The minimum capacity of the Offshore Wind Farm shall be established no later than 31 December 2032. The concessionaire will in special cases be entitled to an extension of this deadline. Connection of the Offshore Wind Farm to the Danish transmission grid is voluntary for the concessionaire. The Concession Agreement further enables the Concessionaire to establish overplanting capacity in excess of the required minimum capacity within the concession area, i.e. it is optional for Concessionaire to establish more than 800 MW capacity within the Concession Area. Furthermore, the Concessionaire may exploit the production capacity of electricity from the Offshore Wind Farm for energy production, such as but not limited to innovative energy production (e.g. Power-to-X), if this is otherwise possible within the applicable legislation. With the sole exception of the capability-based two-way CfD scheme, the Concessionaire bears all commercial risks associated with the establishment, operation and decommissioning of the Offshore Wind Farm, including any potential overplanting capacity. Such commercial risks include but is not limited to, legislative changes and general market conditions and demands. Additionally, the Concessionaire is responsible for the commercial risks related to any innovative energy production (e.g. Power-to-X facility). The Concessionaire shall bear the costs as stipulated in the construction permit and/or procurement material. Please note that contrary to earlier procurements rounds concerning offshore wind the Concessionaire shall not bear the actual cost of the temporary and permanent preventive measures, which by decision of the Danish Defence must be implemented by the Concessionaire to prevent deteriorations in the quality of the current military radio communication and radar surveillance caused by the Offshore Wind Farm. Such costs will be borne by the Danish Defence. Furthermore, contrary to earlier procurements rounds for offshore wind, the Concessionaire shall not pay the cost of the offshore preliminary investigations performed by Energinet, cf. section 23 (3) of the Renewable Energy Act (RE Act), statutory order no. 132 of 6 February 2024. Such costs will be borne by the Danish State. The location site of the Offshore Wind Farm is further stated below under section "Place of Performance" as well as in the procurement material Appendix 2 (Location of the Concession Area). Reference is further made to the regulation in the Procurement Specifications, Annex F (Concession Agreement), Appendix 1 (Project Specification), and the procurement material as a whole.