Danes detail Thor offshore wind farm tender

Danish Energy Agency (Energistyrelsen) plans to launch the tendering process for the Thor offshore wind farm in the third quarter of 2020 with the issuance of the contract notice and the tender documents.

The deadline for final bids and the appointment of the concession winner is scheduled for the fourth quarter of 2021, the agency said.

The Thor offshore wind farm will be located in the North Sea west of Thorsminde by Nissum Fjord at a distance of minimum 20 kilometres from the shore and with a capacity of between 800MW and 1,000MW.

The tendering model will be a negotiated procedure with pre-qualification. The concession owner of the wind farm will receive subsidies in the form of a price premium for a 20-year period. The subsidies will be granted in accordance with a Contracts for Difference (CfD) scheme designed for this tender. The scheme is a two-way CfD with caps on both the Danish State’s payment to the concession owner and the concession owner’s payment to the Danish State, which will prevent that neither one carries the full risk of the electricity price developing fundamentally different from the forecast, the agency said.

The concession winner will carry out the installation of the offshore wind farm, including the offshore substation and the grid connection from the offshore substation to the POC at the nearshore substation on land.

Prior to the submission of final bids, a strategic environmental assessment (SEA) of the plan for the wind farm will be conducted. Furthermore, supplementary surveys with a focus on benthic flora and fauna, marine mammals, fish and fisheries, underwater noise, safety of navigation, radar and radio interference, marine archaeology, visibility analysis and cumulative impacts, as well as a full EIA for the onshore project to be built by the Danish TSO, Energinet, will be carried out. All results will be published as they become available in due time before the submission of final bids.

The concession winner will be responsible for undertaking the environmental impact assessment (EIA) of the concrete project offshore after the signing of the concession agreement. Establishment of necessary nearshore facilities from POC and grid connection forward to the transmission grid at Idomlund will be provided by Energinet. The onshore grid connection will be built to receive 1,000MW in the POC and will be available to receive first power by the first quarter of 2025.

The financing of the installation of the offshore wind farm, including Energinet’s part of the onshore facilities (approximately € 83.7 million) is to be provided by the successful bidder.

A license for the electricity production and authorisation will be granted for 30 years with the possibility of a five-year extension if allowed under the applicable regulation. A penalty for defective performance will be applied and the concession owner will have to provide a guarantee for the penalty. The concession owner must connect 95 percent of the wind farm to the onshore POC by 31 December 2027 at the latest.

The estimated contract values are around € 1.8 billion for an 800MW project, € 2.1 billion for a 900MW wind farm, and € 2.4 billion for a 1,000MW project.

The potential operators are expected to be large operators or joint ventures with sufficient relevant references regarding the construction of offshore wind farms. The Danish Energy Agency recommends that smaller interested operators approach larger operators as potential subcontractors or alternatively form joint ventures to obtain the necessary financial and technical capacity.

As part of the Energy Agreement signed in 2018, the Danish government decided to establish three new large-scale offshore wind farms before 2030, which will expand the supply of energy from offshore wind by at least 2,400MW. The first of the three wind farms to be tendered is Thor.