The farm, Horns Rev 3, is set to be constructed for a historic low price. The Swedes guaranteed a price of 10.31 euro cents per kilowatt hour, which the Danish Climate Ministry said would save Danish consumers around 2.7 billion Swedish kronor (295 million euros) over the next 12 years.
"The construction of Horns Rev 3 is an important step towards both Denmark’s and EU’s goals to reduce carbon dioxide emissions, goals that stipulate that 30 % of the total energy consumption in 2020 shall origin from renewable energy sources," Vattenfall's CEO Magnus Hall said in a statement.
"This large, planned offshore wind farm will affect Vattenfall’s ambitions concerning wind power and especially our focus on offshore wind farms. Today we are the second largest operator of offshore wind power farms in the world and one of the largest operators of on shore wind power in Denmark. That gives us even better ways and means to develop sustainable energy production to become both profitable and competitive – in benefit of the Danish consumers," he added.
Denmark is already a global leader in wind energy. In 2014, the nation set a record by producing 39 percent of all electricity through wind power. By 2020, the Danish government plans to have half of all electricity produced by wind power.
The Danish Climate ministry said that although direct comparisons were difficult, the Horns Rev 3 project is likely to be the cheapest wind farm in Europe and one of the cheapest in the world.
“With Horns Rev 3, Denmark is making windmill history through realizing a significant reduction in the cost of establishing offshore wind farms. There is no doubt that the power from offshore wind turbines will continue to be an essential part of the green transition and contribute effectively to reducing CO2 in the atmosphere," Climate Minister Rasmus Helveg Petersen said in a statement.
Vattenfall beat out three other companies for the Horns Rev 3 bid. Construction on the wind park is expected to be completed by January 1st, 2020 and will produce enough electricity to power more than 450,000 homes.
The firm is also currently building, together with Stadtwerke München, two offshore wind farms in the German part of the Nordic Sea: Dan Tysk and Sandbank. Vattenfall is developing the wind farm Kentish Flats in the UK.
The company's latest Danish project is still subject to final approval from the European Union and Danish parliament.