Episode 8 – Denmark’s Legal Challenge, Australia’s Auction Launch & Hybrid Foundations – WindLogix Offshore Wind Podcast

Bahzad Ayoub   0:011
Welcome to episode 8 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. It’s been another eventful few weeks with the offshore wind sector, with developments ranging from legal challenges and project cancellations, through to auction activity and new strategic partnerships. To make sense of it all, I’m joined once again by Westwood Senior Offshore wind Analysts Peter Lloyd Williams and Hui Min Foong. Hi everyone.

Peter Lloyd-Williams   0:41
Hi, everyone.

Hui Min Foong   0:43
Hello, everyone.

Bahzad Ayoub   0:46
In today’s episode, we’ll start by looking at the legal challenge surrounding Denmark’s offshore wind state aid approvals before turning to Australia and the latest developments in the country’s offshore wind offtake auction process. Staying in the APAC region, we will discuss the cancellation of the Yodue offshore wind project in Taiwan, along with Taiwan’s progress towards launching its first floating offshore wind auction.

We will then examine Masdar’s recently announced MOUs with Luxcara and RWE, before wrapping up with a preview of Peter’s upcoming briefing on hybrid foundation technologies. So plenty to get through. Let’s get started.

Now, beginning with Denmark, recent news has come out that the offshore wind sector is facing a legal challenge relating to state aid approvals. Peter, can you explain what the challenge is about and why it matters?

Peter Lloyd-Williams   1:35
Of course, Baz. So this concerns a case launched in July of this year in the European Court of Justice by Dansk Vindenergi, which is a local onshore wind developer, essentially challenging Denmark’s new two-sided Contract for Difference scheme. And this was the scheme used to award projects to Vattenfall just last month.
the North Sea Central and the Hessler sites. There are limited details available about the legal arguments being made at the moment, but the general thrust is that the European Commission should not have approved the CfD scheme under EU state aid rules.

Bahzad Ayoub   2:14
Now, what impact could this have on projects currently progressing through development? And is there potential for wide implications up across Europe?

Peter Lloyd-Williams   2:24
So I think it’s too early to tell until we start seeing details of what’s actually being argued. While the case does constitute a risk for the projects in question, it’s not unusual for projects to go forward in the face of pending legal challenges, quite common in fact. So some early reporting also suggests that the principal concern from the Danish complainant was how the new CfD-backed projects will impact their position in the Danish market, the complainants that is. So, it seems unlikely that the broader role of CfDs for offshore wind projects will come into the question, but of course we’ll have to wait and see. Certainly, the broader policy direction from EU states is clear.

Bahzad Ayoub   3:08
Thank you for that, Peter. So yeah, we’ll keep an eye on this and see if this impacts the offshore wind projects in Denmark and further afield across Europe. Now, Hui Min, let’s move across to Australia, where the state of Victoria has now launched its long-awaited offshore wind offtake auction. Can you start by giving us an overview of the auction and the key details our listeners should be aware of?

Hui Min Foong   3:31
Yeah, so this has been a much-anticipated development, kicking off Australia’s first offshore wind auction after several delays. The state of Victoria is seeking bids for 2GW of projects targeting the Gippsland region, and the auction will remain open for almost a year until August of 2027, with contracts then planned to be awarded in 2028.

One notable feature of this auction is its relatively long timeline, which is longer than what we’ve seen in other offshore wind markets, where auctions typically stay open for several weeks to months. The longer time frame plan for Australia’s first auction allows for more buffer for other relevant details to be ironed out. Projects will be bidding for contracts and the State of Victoria is planning to integrate these contracts into the National Electricity Services Entry Mechanism, or ESEM. Which is designed to provide longer-term revenue support for projects. The ESEM is still being developed and it is intended to support renewable projects following the wind down of the capacity investment scheme, which is scheduled to issue its final tenders in 2027.

Bahzad Ayoub   4:46
Thanks for that overview. And how significant are these developments for offshore wind developers and investors looking at the Australian market?

Hui Min Foong   4:54
It is a major development, and the launch of the RFP process is a confidence booster for prospective developers. However, further clarity around the ESEM mechanism for revenue support is needed and the availability of transmission and port infrastructure remain concerns. Earlier this month, Victoria identified a preferred transmission route to connect these first offshore wind projects to the state grid, and a public consultation on that design is scheduled for early 2027.

So, these market design and infrastructure frameworks are being developed alongside the auction process itself. Therefore, developers will need to track this progress closely as the auction continues over the next year. It’s also worth remembering the scale of the prospective project pipeline in Australia, and specifically in the Gippsland area, with over 18GW across nine prospective projects. Now, these projects are at varying stages of development, and not all are expected to bid. Regardless, these include projects like the planned 2.2GW Star of the South,
the 1GW Blue Mackerel and 2.8GW Gippsland 1 projects. That’s a sizable pipeline of projects lined up to potentially compete in this auction, which has an initial target of 2GW.

Bahzad Ayoub   6:17
Well, it’s great to see progress being made in Australia, and yeah, as mentioned, you know, we’ll keep an eye on what happens and which projects win in the offtake auctions if it becomes successful.

 

Now, moving on to Taiwan, the cancellation of the Youde offshore wind project has been a big story that has come out since the last episode. Hui Min can you start by explaining what happened and the factors that led to the project’s cancellation?

Hui Min Foong   6:42
Yeah, so the Taiwanese Energy Administration is terminating the contract for the Youde project. And for those who have been watching the Taiwan market closely, this may not come as a huge surprise. Shinfox Energy, the project developer, was facing financial stress and was delisted from the Taiwan Stock Exchange in June 2026.
The company missed several deadlines for paying the full share of its performance bond, which led to the Energy Administration’s decision to terminate its contract.

Bahzad Ayoub   7:15
And looking beyond this individual project, what does the cancellation tell us about the current challenges facing offshore wind developers in Taiwan?

Hui Min Foong   7:24
The Youde project highlights the additional challenges that local developers with less experience or less capital may face. And with the drive to localise supply chains, this can create additional pressure for developers. However, the cancellation of the Youde project is not necessarily a wider reflection of Taiwan’s offshore wind industry.
While many projects from the Round 3.2 auction have now been stalled, the remaining projects are Hai Guang 6 and Fengmiao Phase 2, which remain in planning phase and are pushing ahead, having awarded various early contracts, including for surveys, installation, and power offtake.

So, while the cancellation highlights real challenges, I would be cautious about viewing it as a representation of the wider offshore wind industry in Taiwan as a whole.

Bahzad Ayoub   8:18
And finally, keeping an eye on future rounds, auction rounds in Taiwan, do you think this development could influence auction design, qualification requirements, the level of developer participation going forward?

Hui Min Foong   8:31
Perhaps not specifically a direct result of this Youde development, Taiwan’s current Round 3.3 auction already focuses on developer track record and financial capability, and the auction results are anticipated to be announced very soon at the end of September. Several bids are anticipated, although it is very possible that the total bidding volume may fall short of the auction targets. Now, if round 3.3 targets are not met, this would have a stronger impact on Taiwan’s future design considerations for the next auction.

Bahzad Ayoub   9:06
Thanks for that great overview. Staying in Taiwan, there has also been further developments regarding floating offshore wind. Hui Min, can you talk us through the latest announcements and timelines?

Hui Min Foong   9:17
Yes, so earlier this year, Taiwan announced its plan to launch a floating demonstration program. This has now proceeded with the launch of a competitive selection process earlier this month, targeted to conclude as early as the third quarter of 2027.

The Energy Administration plans to select two to three projects with a target scale of 100 to 200MW per project, which maintains the programme at a relatively more pragmatic demonstration scale rather than pushing for large floating projects.
Additional details around evaluation criteria have been announced, providing greater clarity for bidders. However, critical details remain to be released, for example, around the renewable feed-in tariff, which is anticipated to be drafted by the end of this year.

Bahzad Ayoub   10:11
And in terms of importance, how important do you see floating wind becoming within Taiwan’s wider offshore wind strategy?

Hui Min Foong   10:19
It is promising to see that a renewed focus has been placed on the floating demonstration scheme. A viable feed and tariff rate will be critical in order to support these early projects and that’s it on a wider scale. Taiwan’s offshore wind strategy remains clearly focused on expanding fixed bottom capacity first with floating wind acting more as a compliment in the longer term.

Bahzad Ayoub   10:44
Thank you, Hui Min. Now, before we move on to our final topic, which is a preview of a briefing Peter will be releasing soon, I’d like to touch on a couple of strategic partnerships that have been announced recently. So, Masdar has signed offshore wind MOUs with both Luxcara and RWE. Peter, can you provide an overview of these agreements and why they stand out?

Peter Lloyd-Williams   11:07
Thanks, Baz. So, these were agreements announced as part of a state visit by the president of the UAE to Germany earlier this month, Masdar being the state-owned renewables investor of the UAE. Essentially, there are two separate MoUs with two significant players in the German energy sector. The first is a Masdar RWE MoU about participating in next year’s German offshore wind lease auctions, which has an indicative investment value of around EUR3 billion, according to the companies. So that could either be for the re-tender of sites N10.1 or N-10.1 and N-10.2, which is 2.5GW combined. Or sites N-13.1 and N-13.2, which is 1.5GW combined. Masdar purchased 49% of RWE’s Dogger Bank South projects back in 2024.
So this is a continuation of an existing close relationship.

As for the Luxcara agreement, that’s an MoU, and in their words, to establish a strategic partnership focused on battery energy storage and offshore wind projects in Germany and beyond, with joint investment potential in excess of EUR5 billion across batteries, offshore wind and other projects, so there’s less clarity there on what exactly that will mean, but it wouldn’t be a surprise to see Luxcara making moves in those technologies soon.

Bahzad Ayoub   12:40
Thank you, Peter. So yeah, it’ll be interesting to see if and how these agreements progress.

 

Now, for our final topic today, we’re going to look ahead to one of Westwood’s upcoming briefings on hybrid foundation technologies. To start, Peter can explain what we mean by hybrid foundations and why they’re receiving increasing attention across the industry.

Peter Lloyd-Williams   13:06
Yes, so we’re essentially talking about turbines that are neither solely fixed bottom or floating, which in very simple terms tends to mean a central structure fixed to the seabed and that’s supported by mooring. So essentially combining elements of the two existing foundation types, the fixed bottom column of the fixed bottom foundations, obviously, and the moorings of the floating foundations. So that’s a very basic working definition to give you an idea of what we’re talking about.

Bahzad Ayoub   13:40
And from a developer’s perspective, what are the potential benefits and challenges associated with adopting these hybrid technologies?

Peter Lloyd-Williams   13:50
The main selling point is that hybrid foundations should be deployable in water depths in excess of 60m, up to perhaps 100m or more, and different designers advertise different capabilities. The technology is supposed to be cheaper than the floating foundation alternative, so commercialising it would essentially enabled developers to move beyond the 60m water depth limit without needing to get involved with the complexities and costs of floating wind.

In Northern Europe in particular, where a lot of areas which are traditionally thought of as floating wind only zones were around 100m water depth, hybrid foundations would open up large areas for development without the need for floating technologies. Now, this technology, hybrid foundations, is still in a fairly early stage, though, and there aren’t any demonstrators currently in the water, for example.

Bahzad Ayoub   14:49
And finally, do you think that there is a danger that these hybrid foundations could slow down the development of the floating wind market?

Peter Lloyd-Williams   14:58
That’s an interesting question. Certainly, they offer different opportunities for countries looking to develop in the 60 to 100m water depth range. If you assume cost reductions for floating wind will come on a fairly simple learning curve basis, so the more units that we get produced overall globally, the lower the cost per unit generally becomes, then it could have an impact. Taking volumes out of the floating wind pipeline could reduce the speed of cost reduction there.

 

However, that makes certain assumptions about the extent to which you can standardise floating wind fabrication which not necessarily everybody agrees with. And moreover, floating wind is generally a much more advanced concept than this hybrid foundation concept, with a lot more load hours already demonstrated around the world out at sea in various configurations.

Bahzad Ayoub   15:55
Thank you, Peter. Now that brings us to the end of today’s episode. My thanks as always to both Peter and Hui Min for joining me and sharing their insights. Thank you as well to everyone listening.

 

We hope you found today’s discussion informative and insightful. And as always, if you’d like to learn more about any topics discussed today or access Westwood’s offshore wind research and market intelligence, please visit our website at Westwood Energy.com.

 

Until next time, thank you for listening to the Wind Logics Offshore Wind Podcast. I’ve been Bahzad Ayoub on behalf of the team at Westwood, goodbye.

 

 

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