Episode 7 – Denmark’s Auction Success, Taiwan’s Expansion & Germany’s Reforms

Bahzad Ayoub   0:13
Welcome to episode 7 of Westwood Global Energy Group’s WindLogix Offshore Wind Podcast. I’m Bahzad Ayoub, offshore wind manager at Westwood, and I’ll be your host for today’s episode. As always, I’m joined by two of Westwood senior offshore wind analysts, Peter Lloyd Williams and Hui Min Foong, who will be sharing their insights on the latest developments across the offshore wind sector.
Peter, Hui Min, welcome to the podcast.

Peter Lloyd-Williams   0:40
Hi, everyone.

Hui Min Foong   0:41
Hello, everyone.

Bahzad Ayoub   0:46
Now in today’s episode, we’ll start with the results of Denmark’s latest offshore wind lease auction and what they signal for the future of the market. We’ll then discuss the Morgan Wind Farm lease round in the UK. We’ll also examine the Philippines’ revised offshore wind auction timelines, as well as Taiwan’s updated offshore wind ambitions and targets through to 2039, before discussing the recently announced draft reforms to Germany’s Offshore Wind Energy Act. Finally, we’ll take a deep dive to Westwood’s latest Q2 offshore wind market quarterly report highlighting the key trends, investment signals and market developments shaping the global offshore wind industry. So plenty to cover across both Europe and Asia. Let’s dive straight in.

Peter, let’s begin with the results of Denmark’s latest auction results. Please can you provide us with an overview of the auction outcome?

Peter Lloyd-Williams   1:37
Of course, Baz. So here we’re talking about Denmark’s auctions for two sites, the 800MW Hessleo site off the east of the country and the 1GW North Sea central site, obviously in the North Sea of the west. And these tenders are notable because they’re the first since Denmark’s unsuccessful offshore wind auctions in 2024.
And the difference between now and 2024 is the fact that the government’s made revenue support available to projects this time. And the absence of such support was largely seen as the primary reason why no developers participated in the previous auction, which is, of course, a scenario we’ve seen play out in a number of markets.

 

This time, the Danish government brought in two-sided contracts for difference,
CfDs, to get the sites over the line, which is a very conscious effort to get the pipeline moving again, essentially. Vattenfall was the big winner, picking up both sites. North Sea Central for DKK504 per MW hour, which is about $76 per MW hour, and Hessleo for DKK542 Danish kroner per MW hour, which is about $81 per MW hour, and both of those were on twenty-year contracts.

Bahzad Ayoub   2:52
Now, based on these results, what do you think the implications are for future offshore wind leasing rounds, both in Denmark and across Europe more broadly?

Peter Lloyd-Williams   3:02
I think it highlights the importance of getting the right support schemes in place to allow projects to progress on a sound economic basis. Targets and tendering timelines are all well and good, but setting out ambition and goals, but ultimately it’s what’s behind that, the revenue visibility, the grid connection, the permitting risk.
and of course the costing side of all of that on the government part, which ultimately determines the bankability of these projects and whether they can be built and how quickly they can be built.

Bahzad Ayoub   3:36
Now, final question before we move on. What are the implications of Vattenfall being awarded the rights to both sides? In particular, does this raise any concerns around market concentration?

Peter Lloyd-Williams   3:48
So there are risks to having one developer pick up multiple sites in a tender, which is something we’ve seen elsewhere, in fact. After all, if Denmark were to decide 18 months down the line that these projects are no longer consistent with its strategy, which would ultimately be a question for its leadership and its shareholders,
and decide to relinquish them, Denmark would then be back to square one with these sites, so to speak.

 

This is the situation we actually saw play out in Japan over the last couple of years, where Mitsubishi picked up all three fixed button offshore wind sites which were on offer in the country’s first lease auction back in 202, but the company relinquished those sites a year ago due to cost concerns. Now those three sites which were initially auctioned in 2021 are now due to be re-auctioned and the results will probably come out next year, so that’ll be a full six years after the initial process is run.

Bahzad Ayoub   4:47
Thank you for that Peter. Now sticking to the topic of auctions, the Crown Estate announced has initiated a new tender for the Morgan Wind site located offshore England. Peter, please can you provide us with some insights around this tender?

Peter Lloyd-Williams   5:03
Yes, so this is the re-tendering of another site, Morgan, which was initially picked up by an EnBW-bp consortium in 2021 in the UK’s Round 4 auctions. BP stake was of course ultimately moved into the JERA Nex bp JV, which was set up in 2024.
And then in January this year, it was announced that JERA Nex bp and EnBW would both be exiting the site, essentially leaving it back with The Crown Estate and leaving The Crown Estate with another site on its hands to lease. Now, the interesting case here is that JV had actually already secured the DCO, a development consent order for the generation assets. So, an incoming developer, if it were to be successful in this new process that’s being run, would have the benefit of that, so long as they’re happy with the decisions made by the original developers and the design envelope and what’s permitted under the DCO as it stands.

So, it’s quite a unique lease opportunity in that sense. All the more so because the developer will pay the lease fee, whatever that turns out to be, over a 20-year period from when the lease commences, not in yearly intervals until FID, as has been the case with the past couple of rounds. And the The Crown Estate is hoping to conclude this new process by the end of this year.

Bahzad Ayoub   6:31
Thanks for that overview, Peter. Now, moving on to the Philippines. In our previous episodes, we discussed the suspension of the Green Energy Auction Programme. Since then, the Philippines government has announced a revised timeline for the auction process. Hui Min, could you please walk us through the latest updates, including the key milestones that have been announced?

Hui Min Foong   6:51
Yeah, so back in July, we saw the GEA5, Philippines’ first offshore wind auction, being put on hold. Since then, the government has announced a new target to relaunch the auction in December 2026. Based on current plans, the auction process is scheduled to continue until the end of June 2027.So, a total of seven months, which gives the government some flexibility in terms of timeline from the official auction launch to the final awards.

Revisiting the reason why the auction was suspended in the first place, the government wanted to review grid integration challenges, port infrastructure readiness, and supply chain constraints. These are all significant challenges to resolve, and it will be ambitious to recalibrate by December which is a tight time frame.

The Philippines has set some interim targets, such as final approval of the supplemental terms of reference by October. So, monitoring progress against these milestones will help to give an indication of whether the review process is proceeding according to schedule.

Taking a broader view, despite the setback in the Philippines itself, which was being viewed as a potential new market in the region, the wider Asia Pacific markets remain active.
Additional upcoming tenders are still anticipated this year in more established markets like South Korea and Japan, which will sustain the momentum across the region.

Bahzad Ayoub   8:28
Thank you for that, Hui Min. Sticking with the APAC region, the government of Taiwan has also announced new offshore wind deployment targets extending through to 2039. Hui Min, please can you talk us through the key details of these targets, how they compare with the previous ambitions, and what they signal for the future of Taiwan’s offshore wind market?

Hui Min Foong   8:48
Taiwan has announced a new set of targets extending to 2039. The 10.9GW target for 2030 has been maintained, and additional targets of 18.3 to 19.9GW in 2035, up to 24.7, to 27.9GW in 2039 have been introduced and these help to reinforce Taiwan’s long-term commitment to the offshore wind sector.

Based on the current project pipeline in Taiwan, projects like the Fengmiao projects and Formosa projects are still under progress from rounds 3.1 and rounds 3.2, but other projects like the Wei Lan Hai, Hai Ding and Hai Xia projects have been cancelled. Even if all remaining projects from Round 3.1 and 3.2 proceed, and this in itself is uncertain, Taiwan will need additional capacity from the Round 3.3 auction to commission by 2030 in order to reach that 10.9GW target.

Now to recap, Taiwan’s Round 3.3 auction was launched targeting 3.6GW of capacity. 1.2GW of expansion capacity was then introduced by including capacity from previously stalled sites. Target commissioning dates for round 3.3 range from 2030 to 2031. And with this in mind, reaching the 2030 target means that majority of this capacity will actually need to commission by 2030.

Regardless, Taiwan is currently the largest offshore wind market in Asia Pacific outside of mainland China, which is a significant achievement and sets a strong foundation for future development. While 10.9GW by 2030 can be seen as a stretch goal, Taiwan is a mature market with an established infrastructure and a proven project track record.
A quick note on floating wind as well. Taiwan has reintroduced a timeline aiming to launch a floating demonstration programme by the end of this year in Q4. Under this 2 + 1 programme, Taiwan is planning to kick off with floating projects sized 100 to 200MW, with completion dates targeted in 2032 to 2033.

So the key focus for Taiwan remains very much on fixed bottom rather than floating wind, but regardless, it is encouraging to see new details emerging around Taiwan’s ambitions for launching floating wind at a sizable demonstration scale.

Bahzad Ayoub   11:25
Thanks for that great overview, Hui Min. Interesting to see what happens with these new targets. Now, before we move on to our quarterly report, the final market topic we’ll be discussing today is Germany.

 

Now, Peter, the German government has proposed reforms to its offshore Wind Energy Act. Can you walk us through the key changes being considered and explain what they could mean for the future of offshore wind developments in the country?

Peter Lloyd-Williams   11:50
Thanks, Bahzad. So the headline reform is the proposed introduction of contracts for difference, CfDs, to get the pipeline moving again after two auctions concluded without bids last year, which is a similar situation to what we saw in Denmark, as we discussed a little earlier. The difference here is that the CfDs will only be available as a fallback option if no zero subsidy bids are received. So essentially running a two-stage process. And this decision has been criticised by the German offshore wind organisation because after all, it risks inevitable delay if it’s clear that no zero subsidy bids will be made in the first round. Another thing to note, I think, touches on something we discussed in our previous episode. What to do with non-pre-investigated sites awarded over the past few years, where developers have made it clear that they won’t be developing the sites as things stand. And to remind these are sites with large lease fees attached. And again, the noteworthy thing is that the proposals, as they stand at the moment, don’t contain any specific provisions for those sites. So it will be, so it’s still up in the air what will happen. At the moment, sort of the go-slow status quo seems set to continue.

Bahzad Ayoub   13:08
Thank you, Peter. It’ll be interesting to see what happens with these amendments currently in the draft process and under consultation in Germany. Now, for our final topic today, we’re going to take a step back from individual market developments we’ve discussed and look at some of the broader trends shaping the global offshore wind sector.

Now, Westwood recently published its Q2 2026 offshore wind market quarterly report. And Hui Min, could you begin by highlighting some of the key takeaways from the report and the trends that you think our listeners should be paying close attention to?

Hui Min Foong   13:45
Yes, Baz. 2Q has been a notable quarter. Capacity additions have exceeded 2GW this quarter, an eight-fold increase compared to the capacity additions in the previous quarter. More than half of those were located across Taiwan and France. With the commissioning of the Noirmoutier project and EolMed floating pilot in France, this is a rebound in activity in Europe specifically, following two consecutive quarters without any new projects coming online in that region. However, leasing activity remains muted and no lease capacity has been awarded in the first half of this year.

Meanwhile, three new construction vessels have been ordered, and these include one cable vessel and two heavy lift vessel orders outside of mainland China.
This is a positive signal, reflecting growing confidence in terms of industry sentiment regarding the upcoming construction and installation pipeline. This is in line with the focus on project delivery, as mentioned previously by Peter in episode 5, as more offshore wind projects move from the award and planning phase into execution stage.

Bahzad Ayoub   15:01
Thank you, Hui Min. Those are some really valuable insights and a fitting way to conclude today’s discussion. My thanks to both Peter and Hui Min for joining me and sharing their perspectives on the latest developments across the offshore wind sector. Thanks to everyone for listening. We hope you found today’s discussion informative and insightful. And if you’d like to learn more about any of the topics we covered, or access Westward’s offshore wind research and market intelligence, please visit our website at Westwood Energy.com. So, until next time, thank you for listening to the Wind Logics Offshore Wind Podcast. I’ve been Bahzad Ayoub, and on behalf of the team at Westwood, goodbye.

 

 

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