Denmark turns to UK-style CfD for 1GW Thor offshore wind

Contract-for-Difference support mechanism as nation plans largest project so far

Denmark will back its largest offshore wind farm – the up-to 1GW Thor development – with a UK-style contract-for-difference (CfD) in the first use of the mechanism in its build-out programme.

Thor, which will be a minimum of 800MW, will be the first of three large offshore wind projects planned by Denmark by 2030 under its national energy transition plan, agreed last year by politicians from across the spectrum.

Thor, up to 20km offshore in the Danish North Sea, has to be fully online by 2027 and will be Denmark's largest, surpassing the 600MW Kriegers Flak that's due in service in 2021 and 407MW Horns Rev 3, which began operating this year.

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The adoption of the CfD is revealed in draft documents released by the Danish Energy Agency (DEA) ahead of a presentation to market players on 25 November.

Under a CfD system, bidders compete on the basis so-called ‘strike prices’, with developers paying the Danish government – or vice versa – depending on whether power prices are higher or lower over the course of the 20-year contract.

CfDs, and the stability they offer developers and investors, have been widely hailed as a key factor in the huge interest in developing in the UK market, and in helping to drive down prices there.

Developers will also have to include the offshore substation and grid connection to Thor in their bids.

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