Background
An exciting and interesting 2024 has started within the energy and offshore sectors in Denmark, and a number of initiatives, projects, funding and new legislative measures can be expected.
To us “energy and offshore” comprises a number of interrelated sectors, activities, value chains and products, such as
- on- and offshore wind,
- electricity production, transmission and distribution,
- offshore oil and gas exploration and production,
- capture, transport and storage of CO2 (CCS)
- hydrogen production and transport and power-to-x (PtX)
- energy island
In this newsletter we provide an outlook for 2024 on some of the above segments of the energy industry in Denmark, and how WSCO will monitor developments and continue to play a leading role as a legal and commercial advisor to key players in the industry in Denmark.
Energy and offshore in Denmark
With oil and gas as a notable exception, Denmark prides itself of being an industrial and technological frontrunner in energy and offshore, in particular renewable energy in all its forms as well as the green transition in general.
The last few years have witnessed a number of political agreements in Danish parliament with associated funds in the Danish annual budget to support the development and implementation of green measures. However, the plans have not been without hiccups as the dropped idea of an energy island in the Danish sector of the North Sea is a testament to.
Outlook for 2024
In 2024 we can expect the following within the most importanct energy sectors in Denmark.
Wind
In offshore wind, the large tenders in offshore wind to establish appr. 6 GW of offshore wind capacity before 2030 are currently being carried out, with market dialogues ongoing and the authorities updating tendering and contracting terms. The deadline for comments under the current marked dialogue is 8 February 2024.
Within onshore wind, developments will probably continue to be sparse, and there will be a continuing discussion on how to smoothen, expediting and streamlining permitting processes (as there will be – and is – for offshore wind).
WSCO is a key player in offshore wind advising major developers and contractors and suppliers on offshore wind development and operations in Denmark and in the North Sea area.
Oil and gas
In offshore oil and gas, the license for the dormant Hejre field was extended in 2023 to 2047 and the license holder now has a development and production permit for exploiting the (mainly) gas reserves in the field.
An environmental impact assessment has been prepared, and it will be interesting to see if the operator of the field will now complete the development of the field that started in 2011 but was suspended in 2016.
WSCO has many years of experience in advising companies active in offshore oil and gas in Denmark and internationally.
CCS
Within carbon capture and storage (CCS) tenders are ongoing for both onshore and offshore storage and the authorities have on 17 January 2024 announced that large emitters, whether privately or municipality owned, can look forward to broader rights for CO2 capture.
In addition, the act on transport of CO2 via pipeline will be brought forward and is expected to enter into force by mid-2024.
WSCO advises on CCS in Denmark, and together with Dansk Offshore, EVIDA and TotalEnergies we are hosting and speaking at the webinar on the act on transport of CO2 via pipeline on 1 February 2024.
Hydrogen and PtX
Within hydrogen and power-to-x (PtX) ambitions are to establish 4-6 GW electrolysis capacity in 2030. This probably requires an ambitious financing plan for the sector in 2024 and the first steps were taken in late 2023 with the award of contracts at a total value of DKK 1.3 bn from the Danish government to a number of industry players to build a total capacity of appr. 180 MW.
Investments in PtX and hydrogen infrastructure are expected to rise over the next years and WSCO will continue to monitor and report on developments within this sector.
Energy island
Energy island (Bornholm) is currently the only active energy island project in Denmark after the government and interested consortia in 2023 had to realize that an energy island in the North Sea was not financially viable, at least not under the current conditions.
Feasibility studies, reports and the initial scoping documents for the energy island programme and environmental impact assessment have been prepared, and the first steps in development infrastructure on and around Bornholm have been taken.
It will be interesting to see how the project progresses in 2024. WSCO advises on all matters relevant to project scoping, development, tendering and contracts related to major infrastructure projects.
