The Danish government has postponed the launch of a tender to establish a North Sea energy island project due to high costs, the country's ministry of energy said on Wednesday.
The project included the construction of an artificial island in the North Sea that would serve as a hub to gather and distribute power generated by surrounding offshore wind turbines.
The government will consider alternative options in order to cut costs, the Danish ministry said.
Denmark approved the plan to build the world's first energy island in early February 2021, which it said could produce and store enough green energy to cover the electricity needs of three million European households.
The ministry of energy and the Danish energy authority have since developed the initial concept and now estimate that the government's cost for the project would amount to more than 50 billion Danish crowns ($7.35 billion).
"The project is thus far from being profitable, which is a clear condition for the project in the political agreements," the energy ministry said in its statement.
The government added that it remains committed to the construction of the energy island, but said it was necessary to explore alternatives that could make the project viable in light of current economic concerns.
The decision on how to push the project forward and the publishing of the tender documents will be postponed until later this year, the ministry said.
($1 = 6.8013 Danish crowns)
(Reuters - Reporting by Louise Breusch Rasmussen; Editing by Terje Solsvik and Jan Harvey)