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European Commission approves support for Thor

By: Tom Russell 02/03/2021 European Commission

General Windfarms

The European Commission has approved, under EU state aid rules, support for the Thor offshore wind farm project, which will be located in the Danish part of the North Sea.

Denmark notified to the Commission an aid measure, with a total maximum budget of DKK 6.5 billion (approximately €870 million), to support the design, construction and operation of the new Thor offshore wind farm project. The project, which will have a capacity between 800-1000 MW, will include the wind farm itself, the offshore substation and the grid connection from the offshore substation to the point of connection in the first onshore substation.

The aid will be awarded through a competitive tender and will take the form of a two-way contract-for-difference premium of the duration of 20 years. The premium will be paid on top of the market price for the electricity produced.
The Commission assessed the measure under EU state aid rules, in particular the 2014 guidelines on state aid for environmental protection and energy.

The Commission found that the aid is necessary and has an incentive effect, as the Thor offshore wind project could not take place in the absence of the public support. Furthermore, the aid is proportionate and limited to the minimum necessary, as the level of aid will be set through a competitive auction. Finally, the Commission found that the positive effects of the measure, in particular the positive environmental effects, outweigh any possible negative effects in terms of distortions to competition, in particular, since the selection of the beneficiary and the award of the aid will be carried out through a competitive bidding process.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This Danish measure is a very good example of how Member States can provide incentives to companies to take part and invest in green energy projects, in line with EU State aid rules. The Thor offshore wind farm project will contribute to achieving the EU's ambitious energy and climate targets set out in the Green Deal, without unduly distorting competition in the Single Market.”

Thor is located 20 km off the west coast of Jutland in the North Sea, and will be the first of three projects included in the 2018 Energy Agreement to be built over the next decade. The site covers an area of 440 km2, west of Nissum Fjord. The authorisation is given for 30 years with the possibility of extension for five years.

Grid connection of the first turbine can take place from 1 January 2025, and Thor must be fully established and connected to the grid by the end of 2027 at the latest.

For more information on offshore wind farms worldwide, click here. You can also click here to view the project, and others worldwide, on 4C Offshore's interactive map.

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European Commission approves support for Thor

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