The European Commission announced today that it has approved a €5 billion state aid program by Denmark aimed at supporting the construction of new offshore wind farms capable of generating energy representing as much as 25% of the state’s electricity production.
The Commission’s approval was made under the new Clean Industrial Deal State Aid Framework (CISAF), designed to enable Member States to provide support for goals including clean energy development, industrial decarbonization and clean technology.
Adopted in May 2025, CISAF allows for quicker approval of State aid measures for the roll-out of renewable energy and ensure sufficient manufacturing capacity of clean tech. The framework forms part of the EU’s Clean Industrial Deal, aimed at accelerating decarbonization initiatives while supporting manufacturing in Europe, and addressing key challenges including climate change and industrial competitiveness.
According to the Commission, the Danish aid program will support the construction of two offshore wind farms, Hesselø and North Sea I Mid, with a combined capacity of 1.8 GW and generation of 7.8 TWh per year – the equivalent of a quarter of last year’s total electricity production in Denmark.
Under the scheme, the aid will be provided as direct price support in the form of a monthly variable premium under a two-way contract for difference (CfD), calculated by comparing the bid price to a reference market price and weighted by the monthly capability of the offshore wind farm, with the beneficiaries receiving payments when the reference price is below this bid price, and paying the Danish authorities when the reference price is above the bid price.
The Commission said that the Danish scheme aligns with the conditions set out in the CISAF, noting that the program “is necessary, appropriate and proportionate to accelerate the transition towards a net-zero economy and facilitate the development of certain economic activities, which are of importance for the implementation of the Clean Industrial Deal.”
Teresa Ribera, EU Commission Executive Vice-President for Clean, Just and Competitive Transition, said:
“With this €5 billion scheme, Denmark will be able to deploy offshore wind capacities faster, in line with the Clean Industrial Deal. It will also help Denmark and the EU to reduce their dependence on fossil fuels imports and enhance their renewable energy share, while ensuring that any potential competition distortions are kept to the minimum.”
