Governing green transformative transmission (mega)projects: The case of the Danish energy islands

Abstract

A major challenge to realizing offshore wind (OSW) energy’s global decarbonization potential is grid integration—delivering power from hundreds of gigawatts of installed OSW capacity to end users. This paper presents a qualitative case study of the Danish energy islands, a potentially transformative government-led project that constitutes the world’s first attempt at implementing a coordinated offshore transmission solution, where multiple OSW farms connect to shared, HVDC transmission infrastructure linked to scarce onshore points of interconnection (POIs). This approach enables OSW expansion in the North Sea from tens to hundreds of gigawatts. To support the case study and assess policy implications, we draw on the emerging mission-oriented innovation policy (MOIP) literature, developing a framework of four government functions critical for fostering transformative innovation. We propose integrating MOIP with insights from megaproject management, as practitioner interviews emphasized the importance of conceptualizing the energy islands as a ‘megaproject’ and government as a ‘megaproject manager.’ The interviews revealed six governance challenges revolving around state resource allocation and capabilities, high levels of risk and uncertainty, supply chain bottlenecks, contested timelines, and international cooperation. The most pressing issues are limited state administrative capacity and reluctance to make high-risk public investments, driven by profitability concerns and business-oriented decision-making. To effectively govern OSW expansion through (mega)projects, policy should focus on: (1) reformulating ‘mission’ objectives to reflect core social challenges, clarify conflicting motivations, and ensure realistic, co-developed timelines; (2) shifting from business- to mission-driven resource allocation; and (3) building public sector capacity and capabilities. 

Keywords: Coordinated offshore transmission, Energy islands, Offshore wind energy, Mission-oriented innovation policy, Transformative innovation, Megaproject management