IN Brief:
- Hesselø and North Sea I Mid have minimum capacities of 800MW and 1,000MW respectively.
- Reserved grid capacity and a two-sided contract for difference reduce early development uncertainty.
- Both projects must be completed by 2032, with detailed engineering and procurement now beginning.
Vattenfall has secured development rights for the Hesselø and North Sea I Mid offshore wind projects in Denmark, giving the company at least 1.8GW of new capacity to progress. Hesselø carries a minimum capacity of 800MW, while North Sea I Mid carries a minimum of 1,000MW, with reserved grid capacity for both developments.
Hesselø is planned in the Kattegat, around 30km from the Danish coast between Denmark and Sweden. North Sea I Mid is located approximately 20km offshore near Hvide Sande. Both projects must be completed by the end of 2032, although the tender framework allows final installed capacity to exceed the stated minimums.
The grid arrangements remove an early uncertainty that has delayed or weakened other large offshore developments. Denmark has reserved connection capacity and identified an onshore connection point around 50km inland, allowing offshore design and transmission planning to proceed against a defined network interface. The project rights run for 30 years, with an option for a further ten-year extension.
The awards follow a redesign of Denmark’s offshore wind tender model after an earlier 2024 process failed to attract bids for three offered areas. The revised framework uses a two-sided, capability-based contract for difference, giving developers greater revenue certainty while requiring payments back to the state when market prices exceed the agreed level. It also provides greater flexibility on project size and reallocates some early development risks.
Higher financing costs, constrained installation capacity, and more expensive turbine, cable, and foundation packages have weakened the economics of several European offshore wind projects. Denmark’s revised structure accepts that project risk cannot simply be transferred to developers without affecting participation. The result is two awarded projects rather than another tender ending without credible bids.
The procurement includes requirements extending beyond price and capacity. Tender conditions cover sustainability, social responsibility, recyclable turbine blades, and cybersecurity compliance, while Hesselø must incorporate a nature-inclusive design. The Danish Energy Agency can also request evidence that the projects meet the relevant cybersecurity requirements as development progresses.
Vattenfall already operates five offshore wind farms in Denmark with around 1.5GW of combined capacity. The company reports annual generation of approximately 6.5TWh from those assets, equivalent to the electricity consumption of about 1.5 million homes. Hesselø and North Sea I Mid would more than double the minimum capacity of its operating Danish offshore portfolio if both reach completion at their tendered scale.
Development now moves into surveys, environmental assessment, turbine selection, foundation engineering, cable design, port strategy, and supply chain contracting. The distance between the offshore arrays and the inland connection point makes export cable routing and onshore network work a central part of both programmes, rather than a package that can be finalised after turbine procurement.
The combined scale will create future demand across turbines, foundations, array and export cables, substations, protection systems, monitoring equipment, installation vessels, and long-term operations. A common 2032 deadline may concentrate procurement across a market already managing several large North Sea and Baltic projects. Reserved capacity on the transmission system does not shorten manufacturing lead times for cable, switchgear, transformers, vessels, or trained personnel.
Early coordination between generation and connection design should reduce interface risk, but the physical route still requires consent, detailed engineering, construction, and energisation. Offshore projects lose time when turbine and cable packages advance faster than reinforcement at the landing point. Denmark has identified the connection capacity and location; the remaining task is to deliver the assets that make those reservations usable.
Financing will remain sensitive to construction cost, power-price assumptions, and the final support terms applied to each project. The two-sided contract for difference limits part of the revenue exposure, but it does not remove risks attached to turbine availability, vessel scheduling, cable manufacture, weather delays, or connection delivery. Those risks will be reflected in supplier contracts and lender conditions as the projects move towards investment decisions.
The projects will also have to demonstrate compliance with environmental and technical conditions throughout development. Surveys and design work may alter turbine layouts, foundation choices, cable routes, and construction methods before final consent. The permitted flexibility on capacity gives Vattenfall room to optimise the schemes, although any increase above the minimum rating will still have to fit the reserved connection and approved environmental envelope.
Vattenfall will now work with Danish authorities and project partners to progress both schemes through consent, procurement, and financing. The tender has restored momentum to Denmark’s offshore pipeline, but the delivery test is fixed: at least 1.8GW must be engineered, connected, and commercially operable by the end of 2032.
