Denmark has established a new support scheme based on the contract for difference (CfD) model for the up to 1GW Thor offshore wind farm.
Wind Denmark said the CfD approach means wind resources in Denmark can be “harvested in a cheap and competitive way”.
The trade body added that a similar model has previously been used for Danish offshore wind, but the “model for Thor entails something new that the investor and the state share risk and possible financial gains on Thor”.
Investors will bid with a price per cent per kilowatt-hour, with the lowest bid price winning, it added.
“If the market price of electricity is below the bid price, the state must pay the difference, while wind turbine owners must pay the state if the market price of electricity is above the bid price,” Wind Denmark said.
Wind Denmark director Jan Hylleberg said: “Politicians should be commended for listening to the sector’s arguments and prioritising a model that provides healthy competition for which market player can produce the cheapest electricity from Thor.”
The winning developer will also bid for the first time for the full scope of a project, including not just the wind farm but also the links to the mainland grid, Wind Denmark said.
“Therefore, the network connection will be included in the settlement price that is being offered,” it said.