Bornholm Energy Island onshore buildings 85% over budget

Denmark's flagship Bornholm Energy Island project has seen its onshore building costs balloon by 1.7 billion kroner, an 85% overrun, raising questions about cost control.

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The onshore construction budget for the Bornholm Energy Island has risen by 1.7 billion Danish kroner (about $260 million), an overrun of 85% on the approved figure. The increase applies only to the onshore buildings; the undersea cable and converter systems are unaffected.

Energinet, Denmark's transmission system operator, attributes the higher costs to four factors: rising construction prices, difficult soil conditions, tighter physical protection requirements, and the extra expense of working on an island. Geotechnical surveys for the onshore site were completed in December 2025 and January 2026, and their findings were incorporated into the updated tender package before final bids were submitted.

The onshore works contract went to Per Aarsleff A/S on 17 July 2026 for 3.7 billion DKK (about $565 million). Two companies bid for the job, and Aarsleff came in cheaper.

Climate Minister Samira Nawa informed the project's backing parties of the overrun on 21 July 2026, four days after the contract was awarded. She said no new political process is needed, but the ministry will instruct Energinet to cut costs and budget more carefully in future. Nawa has held the minister post since 3 June 2026, succeeding Lars Aagaard.

The Bornholm Energy Island is designed for 3 GW of offshore wind capacity. The onshore site is in southwestern Bornholm, about half a mile south of the villages of Nylars, Lobbæk, and Aakirkeby. Three of four large station buildings will be built on Bornholm, with the fourth at Lindehøj on Zealand; together they will house three converter stations in Denmark. Artelia is advising on the build, and C.F. Møller Architects designed the buildings and landscaping, per Dagens Byggeri.

The Denmark-side cable contract was awarded to NKT in September 2025 for about €650 million (about $740 million). NKT will supply a 525 kV HVDC cable stretching 124 miles offshore between Bornholm and Zealand, plus 10.4 miles onshore. The cable is being manufactured in Karlskrona, Sweden, and installation is planned using the cable-laying vessel NKT Eleonora, which is still under construction; work is expected to start in 2027. The German link runs under a separate framework NKT signed with 50Hertz in 2023.

Siemens Energy is building four converter systems under a joint order by Energinet and 50Hertz for turnkey delivery split across Bornholm, Zealand, and the German mainland, due by the mid-2030s. The line to the German coast near Lubmin is rated at 2 GW, and the line to Zealand at 1.2 GW. The Kriegers Flak combined grid solution between Denmark and Germany has been running since 2021.

Bornholm has a population of about 39,500 and is currently linked to the Swedish grid by a single sea cable rated at 60 MW, according to the European Commission's clean energy for EU islands programme.

In related news, European Energy has expanded its grid-connected battery storage in Denmark to 96.75 MW and more than 375 MWh as of 31 July 2026. The company's hybrid sites include a 10 MW / 40 MWh battery at Agersted, co-located with an existing 31 MW solar park that has been generating since 2022, and a 28 MW / 112 MWh battery at Stouby, paired with an 88 MW solar park that entered operation in September 2024. European Energy says it took the Agersted project from development to integration within a year. The battery provides grid services such as frequency regulation, balancing support, storing surplus solar, and discharging on demand. The company plans to soon inaugurate its first operational battery system in Lithuania.

Thorvald Spanggaard, EVP and Head of Project Development at European Energy, said: "Institutional investors are increasingly looking for renewable energy assets that combine stable production with operational flexibility and multiple revenue streams. Hybrid projects meet that demand by improving both asset quality and long-term resilience, making them increasingly attractive investment opportunities."