The Danish Parliament has reached an agreement on a revised tender framework for 3 GW of offshore wind farms, incorporating state subsidies and aiming to adapt to current market conditions. This decision comes after the original tender for 6 GW failed to attract bids due to rising costs and market uncertainty.

The new framework includes a state guarantee of a minimum electricity price to ensure stable revenues for energy producers, as well as coverage of preliminary investigation costs and water surveillance. Direct state support of up to DKK 55.2 billion is planned, alongside expected corporate investments of DKK 57 billion. This contrasts with the original tender, which lacked state subsidies and required a concession payment to the state, along with 20 percent state ownership.

While the altered conditions have drawn criticism, an alternative approach focusing on tax incentives is proposed. The article suggests that leveraging the tax system could be a more effective way to stimulate investment and market adaptation compared to direct state subsidies. The European Commission has also noted that member states’ tax systems can hinder green energy development.

The article proposes several tax-based models: tax credits for green energy producers, accelerated depreciation rules similar to those used for oil and gas platforms, full deduction of financing costs, and allowing companies to fully offset carried-forward losses. These measures aim to reduce the financial burden on offshore wind projects, attract more capital, and enable quicker recoupment of investments without relying on direct state subsidies. By utilizing the tax system, market forces could play a greater role in determining who builds the plants, leading to a more economically sustainable approach.