DENMARK Trends and Developments Contributed by: Jakob Østervang, Peter Østergaard Nielsen, Anders Hørlyck Jensen and Tejs Degn Leth Ernst, Accura Advokatpartnerselskab
icate frameworks. Vertical integration remains a stra- tegic possibility, particularly in segments where infra- structure constraints and offtake uncertainty create incentives for tighter control across the value chain. A key driver of future demand is the growing attrac- tiveness of LBG, especially within the maritime sector. As EU compliance requirements tighten – particularly under FuelEU Maritime – shipowners and fuel suppli- ers are increasingly seeking cost-effective, low-carbon alternatives. LBG qualifies for double-counting under FuelEU and is expected to benefit from high penalties for non-compliance starting in 2027. This regulatory pressure is accelerating interest in biomethane as a scalable and certifiable marine fuel, with potential to unlock new offtake channels and long-term contracts. Offshore Wind Offshore wind was once the flagship of Europe’s green transition, driven by large-scale auctions and zero- subsidy bids, however. But the market has shifted dramatically. Projects awarded three to five years ago were based on assumptions that no longer hold. Inflation, war in Ukraine, supply chain disruptions and falling electricity prices have eroded profitability and increased project risk. Construction risk in offshore is compounded by mac- roeconomic volatility and inherent complexity. Unlike solar or onshore wind, offshore wind projects are significantly more expensive and more technically demanding to develop. They require specialised ves- sels, deep-sea foundations, long-distance cabling and high-voltage transmission infrastructure – each with long lead times and limited global supply. These factors make offshore construction risk not only more capital-intensive but also more exposed to global dis- ruptions. On top of that, offshore projects face unpredictable variables such as tariffs, interest rates and geopolitical shocks. Supply chain pressures persist, especially in transformer and HVDC (High Voltage Direct Current) markets, though fears of vessel shortages have eased due to widespread project delays. Still, the com- pounded risk profile makes offshore wind uniquely vulnerable in today’s volatile environment.
Developers are now seeking joint venture partners to share risk and reprice projects under current condi- tions. Recent examples include Norges Bank’s invest- ment in the Thor project and Vattenfall’s divestment of its Norfolk project in the UK. Failed auctions in Den- mark and Germany underscore the problem: develop- ers are unwilling to commit capital without realistic frameworks for risk-sharing and financial viability. The M&A landscape reflects this shift. Fewer projects reach financial close, and many are sold at RTB stage to investors with construction capabilities. The market is now a buyer’s market – those with equity and con- struction expertise can acquire high-quality assets at discounted valuations. Offshore wind remains essential to Denmark’s (and Europe’s) energy mix, especially for PtX, datacentres and general electrification. But unless governments recalibrate their frameworks to reflect today’s realities, the sector risks stagnation. Solar Energy Solar energy has during the past five to ten years been the most widely deployed technology in Danish ener- gy project development, largely due to its low visual impact and relatively high success rate in municipal approvals. However, rising grid tariffs, long delays in grid connection and increasingly volatile electricity prices have made solar projects financially vulner- able. Because of the long delays in grid connection, projects with full permits risk missing grid connec- tion deadlines defined in the same permits, creating a serious mismatch between permit validity and project execution. This uncertainty has reshaped the financial structure of M&A transactions. Previously, milestone payments were standard – triggered by achievements such as zoning plans or grid connection agreements – but these have largely disappeared. Investors are reluc- tant to pay for development progress that cannot be realised within the permit period. Power Purchase Agreements (PPAs), once a reliable source of revenue, have become harder to secure and less attractive. Uncertainty around future electricity prices and the risk of negative spot prices make it
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