Commission approves €5 billion Danish State aid scheme to support offshore wind energy

This article is brought to you in association with the European Commission.

The European Commission has approved a €5 billion (DKK 37.6 billion) Danish scheme to support offshore wind energy in line with the objectives of the Clean Industrial Deal. This measure will contribute to the transition towards a net-zero economy and reaching the 2030 renewable energy target set at EU level. The scheme was approved under the Clean Industrial Deal State Aid Framework (CISAF) adopted by the Commission on 25 June 2025.

The Danish measure

Denmark notified to the Commission, under the CISAF, a €5 billion scheme to support the development of offshore wind energy and boost decarbonisation in the EU in line with the objectives of the Clean Industrial Deal. The scheme will run for 20 years.

The scheme will support the construction and operation of two offshore wind farms: Hesselø and North Sea I Mid. The Hesselø wind farm is expected to have a capacity of at least 0.8 GW, and to generate around 3.2 TWh per year. The North Sea I Mid wind farm is expected to have a minimum capacity of 1 GW, and to generate around 4.6 TWh per year. The combined annual production of these two wind farms will represent the equivalent of around 25% of last year’s total electricity production in Denmark.

Under this scheme, the aid will take the form of a monthly variable premium under a two-way contract for difference (‘CfD’). This will be calculated by comparing the bid price to a reference market price, weighted by the monthly capability of the offshore wind farm. The beneficiaries will receive payments when the reference price is below this bid price. When the reference price is above the bid price, the beneficiaries will have to pay the Danish authorities.

The Commission found that the Danish scheme meets the conditions of the CISAF (sections 3 and 4.1.2). In particular, the aid will be provided as direct price support, through a capability-based two-way CfD, which will be awarded via a competitive bidding process. The compensation will be granted for the potential electricity production that the wind farm could have produced rather than for its actual production. This design ensures that the market functions properly and that the scheme does not compensate producers for production in any periods in which the market value of that production is negative, in line with the EU’s electricity market design rules.

The Commission concluded that the Danish scheme is necessary, appropriate and proportionate to accelerate the transition towards a net-zero economy and facilitate the development of certain economic activities, which are of importance for the implementation of the Clean Industrial Deal. This is  in line with Article 107(3)(c) of the Treaty on the Functioning of the EU and the conditions set out in the CISAF.

On this basis, the Commission approved the aid measure under EU State aid rules.

Background

On 25 June 2025, the Commission adopted the CISAF to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Clean Industrial Deal.  

The CISAF allows the following types of aid, which can be granted by Member States in order to accelerate the clean energy transition:

• Measures accelerating the rollout of renewable energy and low-carbon fuels(sections 4.1 and 4.2). Member States can set up schemes for investments in all renewable energy sources as well as energy storage, with simplified tender procedures. Specific rules are also provided to accelerate the roll-out of low-carbon fuels.
• Measures allowing temporary electricity price relief for energy-intensive users to ensure the transition to low-cost clean electricity (section 4.5). Before the decarbonisation of the EU’s electricity system fully translates into lower electricity prices, such measures will help to avoid the risk, that due to high costs, industrial activities relocate outside the EU to regions where environmental and climate regulations are absent or less ambitious.
• Measures facilitating the decarbonisation of industrial processes (section 5). Member States can support investments in the decarbonisation of industrial activities to reduce dependency on imported fossil fuels. This can happen through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
• Measures to ensure sufficient clean technology manufacturing capacity (section 6). Member States can grant investment support for strategic projects in line with the Net Zero Industry Act (such as batteries, solar panels, wind turbines, heat-pumps, electrolysers, and carbon capture usage and storage). This also includes the production of key components and the production and recycling of related critical raw materials.
• Measures to de-risk private investments required for the roll-out of clean energy, industrial decarbonisation, clean tech manufacturing, certain energy infrastructure projects, and projects supporting the circular economy (section 8).

The non-confidential version of today’s decision will be made available under the case number SA.118363 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

For more information

Green Deal Industrial Plan

Clean Industrial Deal State Aid Framework

Clean Industrial Deal

New State aid framework enables support for clean industry