| Project Detail |
The project concerns the design, implementation and operation of a 1000MW offshore wind farm, including offshore substation and export cable, in the North Sea West of Nissum Fjord, at about 20 km from Jutland shore.
Additionality and Impact
This operation consists of the construction and operation of a new offshore wind farm that will contribute to (i) the achievement of the 2030 decarbonisation targets set out in the National Energy and Climate Plan (NECP) of Denmark and (ii) the REPowerEU Action Plan.
The financing of this project contributes to Banks lending priority objectives on Energy (Renewable Energy), Climate Action (transversal) and Environmental Sustainability.
In terms of addressing market failures, the offshore wind farm primarily reduces carbon and air pollution externalities, through the reduction of carbon emissions and air pollution.
The project will mainly rely on revenues from the market (the wholesale market and unsubsidised commercial power purchase agreements), as the 20-year support from the contract for difference support scheme is on a near-zero subsidy basis. Multiple developers bid in the 2021 auction at the lowest possible ("near zero") price (0.01 øre/kWh, or ~1.3 cEUR/MWh) for the Thor concession. It thereby contributes to the policy objective of supporting market integration of renewable energy projects.
The operation is expected to yield very good quality and results, thanks to avoided GHG emissions, knowledge externalities, fair employment creation and governance arrangements. Overall, the financing through the EIB will strengthen the promoters capability to increase its capacity of renewable energy, complement other financing sources and improve its credit risk profile by extending the debt maturity profile. EIBs favourable customised terms are highly appreciated by the company. Therefore, the loan is expected to provide a positive signalling effect in the market and crowd in complementary financing sources.
Objectives
The offshore wind farm will primarily reduce carbon and air pollution emissions, which are externalities the market fails to address. It will rely on revenues from the wholesale market, as the 20-year support from the contract for difference support scheme is on a near-zero subsidy basis. The project will therefore improve market efficiency and competition.
Sector(s)
Energy - Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 1200 million
Total cost (Approximate amount)
EUR 3235 million |
