Denmark's North Sea Energy Island is again delayed by high costs

A government minister announced on Wednesday that Denmark would delay construction by at least three years of the planned North Sea Energy Island to provide renewable energy to three million European homes. The delay is due to rising costs and interest rates.

Energy Minister Lars Aagaard said that the projected investment exceeded 200 billion Danish crowns (29.81 billion dollars) and required about 50 billion crowns of state support. Energy Minister Lars Aagaard declined to reveal how much the costs had risen from initial projections.

Denmark had announced, just over a year before, that the project was being delayed due to cost. The island is intended as a hub designed for collecting and distributing energy generated by offshore wind turbines.

It was originally planned as a Danish and Belgian project.

Aagaard stated that the project was no longer feasible due to increases in raw material prices and interest rates. However, it could be redesigned so as to include power cables linking to Germany. The earliest completion date is 2036, up from an earlier estimate of 2033.

Aagaard stated that "the prerequisite was that the project could be implemented without subsidies, and that both Belgium and Denmark would benefit from it. But reality has changed so much that we no longer can see this case."

Aaagaard added that he was hopeful Germany would contribute to the financing.

The German economy ministry didn't immediately respond to an inquiry for comment.

Denmark has been a leader in renewable energy for many years. It is home to the industry leaders Vestas (a turbine manufacturer) and Orsted (a turbine operator).

Cost increases and disruptions in the supply chain have put pressure on this sector. ($1 = 6.7102 Danish crowns)

(source: Reuters)