Denmark plans giant €37bn ‘energy islands’ as part of green programme

Denmark plans to build two giant “energy islands” as part of the world’s most ambitious offshore wind project, as the Scandinavian country increases its green programme in the face of the coronavirus crisis.

The project, which will cost up to €37 billion, will be the "biggest single infrastructure investment in the history" of Denmark, climate minister Dan Jorgensen said. "For us it is a new paradigm."

The offshore wind project was the centrepiece of a new climate package unveiled on Wednesday by the Danish government that aims to cut the country’s emissions by 70 per cent within a decade. Mr Jorgensen said the pandemic had only increased the government’s determination to boost green investments, adding that the climate plan would create thousands of jobs.

“Even though we are in the middle of an unprecedented health crisis, that doesn’t mean that the climate change problem is smaller. We are also in a climate crisis,” he said. “It shows us that we are all in the hands of nature, at the bottom line.”

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Mr Jorgensen said the island project would be financed through public-private partnerships, with the majority of the funding coming from private investors.

Under the proposal, Bornholm in the Baltic Sea and a new artificial island in the North Sea would be transformed into hubs for multiple large wind farms.

The government plans to build at least 2GW of new offshore wind power around each island by 2030, which would triple Denmark’s offshore wind capacity. The North Sea island site has the potential to expand to 10GW over time, and could eventually include factories that produce hydrogen using to wind power, the government said.

World leader

Denmark in 1991 built the world's first offshore wind farm, and in recent years it has become a world leader in the industry. It is home to two of the world's largest wind companies, developer Orsted and Vestas, the turbine maker.

The Danish initiative will be a shot in the arm for a sector that has suffered from construction delays due to the virus. Renewable energy installations in Europe this year will be one-third lower than 2019 – the biggest drop since 1996, according to the International Energy Agency.

However, renewable energy is still growing, even if at a slower pace than expected. The IEA said renewables were the only part of the energy sector that will grow in 2020.

The new energy islands will present an opportunity to test out island-based designs that have long been studied in the wind industry, but never built in real life. Denmark said it would work with other countries – including Poland, Sweden, the Netherlands and Germany – with the view that these countries might use some of the power from the new project.

If the two islands are built out to their full capacity – a combined 12GW – it would represent a 54 per cent increase in Europe’s current offshore wind capacity.

Giles Dickson, head of the Wind Europe lobby group, said the news was a “very positive development” and the biggest such concrete project in the world. “This is all about making sure that when we build new offshore wind farms, as many countries as possible can benefit from the electricity they are going to be generating,” he said. – Copyright The Financial Times Limited 2020