The European Commission has approved a €5 billion (DKK 37.6 billion) state aid scheme notified by Denmark to support the development of offshore wind energy, in line with the objectives of the EU’s Clean Industrial Deal. The decision was adopted under the Clean Industrial Deal State Aid Framework (CISAF), which the Commission introduced on 25 June 2025.

The scheme, which will run for 20 years, aims to accelerate the deployment of offshore wind and contribute to the EU’s 2030 renewable energy targets and its broader transition to a net-zero economy.

Under the measure, Denmark will support the construction and operation of two offshore wind farms: Hesselø and North Sea I Mid. The Hesselø project is expected to have a capacity of at least 0.8 GW and generate around 3.2 TWh annually, while North Sea I Mid is projected to reach at least 1 GW of capacity and produce approximately 4.6 TWh per year. Together, the two projects are expected to generate electricity equivalent to around 25% of Denmark’s total electricity production recorded last year.

The aid will be granted in the form of a monthly variable premium through a two-way contract for difference (CfD). Under this mechanism, payments are determined by comparing a bid price with a reference market price. Beneficiaries will receive compensation when the market price falls below the agreed bid price, while they will have to pay back the difference when market prices exceed it.

According to the Commission’s assessment, the scheme complies with the conditions set out in the CISAF, particularly regarding competitive bidding procedures and market-based design. The compensation will be based on the potential electricity production capacity of the wind farms rather than their actual output, ensuring alignment with EU electricity market rules and avoiding overcompensation during periods of negative market prices.

The Commission concluded that the measure is necessary, appropriate and proportionate to support the development of offshore wind and facilitate economic activities aligned with the Clean Industrial Deal. The approval is granted under Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows state aid to support certain economic activities under specific conditions.

The CISAF framework, under which the scheme was approved, enables EU Member States to implement support measures aimed at accelerating the clean energy transition. These include incentives for renewable energy deployment, industrial decarbonisation, clean technology manufacturing, and mechanisms to de-risk private investments in sustainable infrastructure.

The non-confidential version of the decision will be published under case number SA.118363 in the European Commission’s State aid register once confidentiality issues are resolved, according to information provided by the Commission.