Global Onshore Wind Market Report

The importance of renewable energy has increased due to rising energy prices caused by geopolitical developments and ambitious national clean energy targets. In Q1 2022, Denmark announced a new reform proposal called “Denmark Can do More II”. This proposal outlines measures to accelerate the transition to a more sustainable energy system and decrease reliance on Russian gas. The measures include speeding up the permitting process, especially for subsidy-free renewable project development, with the goal of quadrupling the total volume of electricity generated by solar energy and onshore wind by 2030 (European Commission, 2023).

In Denmark, authorities are progressively implementing robust funding plans to encourage renewable usage. In June 2022, the government and Danish Parliament reached agreements covering a green investment fund, an enhanced unified carbon tax, and a renewable energy package, providing the necessary momentum to achieve the 2030 capacity targets. The fund covers EUR7.2 billion in investments between 2024 and 2040, prioritising larger and longer-term investments in climate, clean energy, and the environment (Ministry of Foreign Affairs Denmark). Additionally, in May 2021, the European Commission approved a support package of EUR400 million proposed by Danish authorities to support sustainable energy production from onshore and offshore wind, tidal power, hydroelectric power, and solar PV (European Commission, 2021).

In Denmark, the repowering of old wind projects presents a significant market potential, given the country’s status as the home of the world’s oldest fleet of wind turbines. Between 1978 and 2020, Denmark experienced a total loss of approximately 7.85TWh of wind energy production due to faults, failures, and age-related asset performance degradation (Renewables Now, 2022). Repowering these ageing assets has emerged as a cost-effective alternative to life extension and holds substantial promise for expanding the installed capacity base.

In 2022, noteworthy repowering initiatives included a 10-year power purchase agreement (PPA) between dairy cooperative Arla and renewables developer Eurowind Energy for a 39.6MW unsubsidised wind farm (Renewables Now, 2022). This repowered wind farm is expected to generate 137GWh annually. Repowering old projects has become crucial for Denmark to achieve its clean energy capacity targets, especially in the face of challenges such as limited land availability and local opposition to new onshore wind projects.

Despite these challenges, Denmark has seen a rise in subsidy-free renewable projects facilitated through the PPA route, driven by technological advancements and the increasing cost competitiveness of wind projects. Notably, the country witnessed its first utility-scale subsidy-free wind park, the 17MW Hirtshals Havnefond project, securing a 3-year PPA with Energi Danmark (AA Energy, 2019).

Hybrid projects integrating solar and wind energy have gained momentum in Denmark, primarily due to their efficient land use. Danish renewable company GreenGo has announced plans to partner with Ringkøbing-Skjern Municipality to develop a green Energy Park comprising 4GW of hybrid solar and wind energy, with an estimated investment of around DKK60 billion (€8 billion), projected to be operational before 2030 (Power Technology, 2023). Additionally, Eurowind Energy revealed plans to construct wind-solar hybrid capacity at five onshore energy centres in Denmark, totalling 2.5GW, with battery storage to provide grid services (WindFair, 2022).

Considering the rapid growth of hybrid projects, the seasonal variability in renewable energy production, and the grid’s limited capacity to handle excessive wind power, energy storage solutions, particularly battery-based systems, hold significant potential in the Danish market. Developers are increasingly integrating battery storage into new power plants to address these challenges. Moreover, innovative and eco-friendly storage technologies like Molten Salt Storage (MOSS), as explored by companies like Hyme Energy, can potentially revolutionize energy storage, offering sustainable and cost-effective solutions for the wind energy industry (State of Green, 2022). These developments reflect Denmark’s proactive approach to tackling challenges and leveraging emerging technologies to advance its renewable energy sector.