Procedures and permits for offshore wind parks

Legislation
The conditions for offshore farms are laid down in the Promotion of Renewable Energy Act. It provides in its chapter 3 that the right to exploit energy from water and wind within the territorial waters and the exclusive economic zone (up to 200 nautical miles) around Denmark belongs to the Danish State. In total 3 licences are required to establish an offshore wind project in Denmark. All licences are granted by the Danish Energy Agency, which serves as a "One-stop-shop” for the project developer in relationship to the many, often opposing, interests connected to the establishment of offshore wind power projects:

1. License to carry out preliminary investigations
2. Licence to establish the offshore wind turbines (only given if preliminary investigations show that the project is compatible with the relevant interests at sea) 
3. Licence to exploit wind power for a given number of years, and – in the case of wind farms of more than 25 MW – an approval for electricity production. (given if conditions in licence to establish project are kept)

The 3 licences are given successively for a specific project, and if the project can be expected to have an environmental impact an EIA must be carried out. This has been the case for all the existing Danish offshore wind farms.  The specific procedure for the Environmental Impact Assessment (EIA) regarding offshore electricity producing installations is described in Executive Order no. 815 of 28. August 2000 that also includes sections that implement the EU EIA directive (97/11/1997).  

The establishment of offshore wind turbines can follow two different procedures: a government tender procedure run by the Danish Energy Agency; or an open-door procedure. For both procedures, the project developer must obtain all 3 licenses.

Goverment call for tenders
In the government tender procedure, the Danish Energy Agency announces a tender for an offshore wind turbine project of a specific size, e.g. 200 MW , within a specifically defined geographical area. A government tender is carried out to realise a political decision to establish a new offshore wind farm at the lowest possible cost. Depending on the nature of the project, the Danish Energy Agency invites applicants to submit a quotation for the price at which the bidders are willing to produce electricity in the form of a fixed feed-in tariff for a certain amount of produced electricity, calculated as number of full-load hours. The winning price will differ from project to project because the result of a tender depends on the project location, the wind conditions at the site, the competitive situation in the market at the time, etc. 

The winning price of the tendered project has generally been higher than the feed-in tariff that is paid for an open-door project, which corresponds to the feed-in tariff for new onshore wind turbines.
The technical and financial capacity of the bidding companies or consortia to implement the project are assessed. Only companies with capacity to complete the project can win a tender. Based on the experiences of the Rødsand II offshore wind farm, where the winner of the first tender ultimately chose not to implement the project due to changed market conditions, the Danish Energy Agency has tightened the conditions in the latest tenders so that the project developer has to pay a fine if the project is not implemented as planned or is delayed.

In projects covered by a government tender, Energinet.dk owns both the transformer station and the underwater cable that carries the electricity to land from the offshore wind farm. 

Open-door procedure
In the open-door procedure, the project developer takes the initiative to establish an offshore wind farm of a chosen size in a specific area. This is done by submitting an unsolicited application for a licence to carry out preliminary investigations in the given area. The application must as a minimum include a description of the project, the anticipated scope of the preliminary investigations, the size and number of turbines, and the limits of the project’s geographical siting. In an open-door project, the developer pays for the transmission of the produced electricity to land.

An open-door project cannot expect to obtain approval in the areas that are designated for offshore wind farms in the report Future Offshore Wind Power Sites – 2025 from April 2007 and the follow-up to this from September 2008.

Before the Danish Energy Agency actually begins processing an application, as part of the one-stop shop concept it initiates a hearing of other government bodies to clarify whether there are other major public interests that could block the implementation of the project. On this basis, the Danish Energy Agency decides whether the area in the application can be developed, and in the event of a positive decision it issues an approval for the applicant to carry out preliminary investigations, including an EIA.  

If the result of the preliminary investigations show that the suggested project can be approved, the project developer can obtain a licence to establish the project.