Denmark delays North Sea Energy Island project due to rising costs

Denmark has announced a delay of at least three years in constructing its North Sea Energy Island, citing rising costs and high interest rates. The artificial island is intended to serve as a hub for collecting and distributing electricity from offshore wind turbines, aiming to supply around three million European households with renewable energy.

Danish Energy Minister Lars Aagaard stated that the investment cost for the energy island now exceeds DKr200 billion ($29.81 billion) and requires nearly DKr50 billion in state funding. The project, initially set to proceed without subsidies and funded by Denmark and Belgium, has faced economic challenges due to increased interest rates and the high cost of raw materials.

Efforts to secure additional funding have so far been unsuccessful, with Belgian authorities declining to contribute further. A possible redesign to include a power link to Germany could bring additional funding, but this would push the project’s completion to 2036.

The delay follows a previous postponement announced in June 2023 for similar financial reasons. Despite these setbacks, the energy island remains a significant part of Denmark’s renewable energy ambitions. GlobalData forecasts a compound annual growth rate (CAGR) of over 9% in global wind power capacity, which was 827.3 GW in 2021, by 2030.