Government spending on the energy island will amount to nearly DKK 50 billion, so new models must now be considered, says Danish Energy Minister Lars Agard.
Energy Islands must be profitable. This was the motto when the political agreement was launched around the large-scale and pioneering concept. However, it had been clear for some time that this would not be the case for the Baltic Energy Island, while it has now been announced that the North Sea project would not be as profitable as it is now.
In fact, the Danish Energy Authority estimates government costs for the current project to be “in excess of DKK 50 billion”.
Therefore, the decision to start buying again is postponed. This was announced by the Ministry of Energy.
– We must take advantage of the large offshore wind potential in the North Sea, and the government stands firmly on the ambition to create an energy island in the North Sea. Energy Minister Lars Agard (M) says the project is important both for Denmark’s and Europe’s green transition and for security of supply.
– When we plan projects of this magnitude, we must of course also make sure that we choose the most responsible solutions. We’ll now take more time to do that so we can make a decision later this year.
Originally, the procurement process was supposed to actually start in September. However, it was pushed back a year until September this year – before being pushed back again, with the announcement that the process would begin in the spring.
Looking at the form
However, the first delay did not occur due to the struggling economy. Then it was more about how the bid met the very different visions for projects that CIP and Orsted had for the Energy Island consortium.
Now it’s time to look at the form again. However, this time it is not so much the technical aspects as it is the financial aspects, as they are looking for “alternatives that can make the project profitable,” because the state’s costs in its current form are “too high and the risks are too many.”
The Department of Energy does not provide a specific timeline for this work, but stated that the decision will be postponed “until later this year.”
Source: Danish Ministry of Energy
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