Construction of Denmark’s North Sea energy island delayed again

Denmark will delay construction by at least three years of its planned North Sea Energy Island, which is set to supply three million European homes with renewable energy, a government minister announced Wednesday, citing rising costs and interest rates.

Energy Minister Lars Aagaard said the projected investment exceeded 200 billion Danish kroner ($29.81 billion) and required about 50 billion crowns in state support. Energy Minister Lars Aagaard declined to say how much the costs had increased compared to the original forecasts.

Denmark announced a little over a year earlier that the project was delayed because of costs. The island is to be a hub designed to collect and distribute energy generated by offshore wind turbines.

It was originally a Danish-Belgian project.

Aagaard said the project is no longer feasible due to rising commodity prices and interest rates. However, it could be redesigned to include power cables connecting to Germany. The earliest completion date is 2036, up from an earlier estimate of 2033.

Aagaard stated that “the precondition was that the project could be implemented without subsidies and that both Belgium and Denmark would benefit. However, the reality has changed so much that we can no longer see this being the case.”

Aaagaard added that he hoped Germany would contribute financing.

The German Economic Ministry did not immediately respond to a request for comment.

Denmark has been a leader in renewable energy for many years. It is home to industry leaders Vestas (turbine manufacturer) and Orsted (turbine operator).

Cost increases and supply chain disruptions are putting pressure on the sector. (1 dollar = 6.7102 Danish kroner)

(source: Reuters)