Danish government secures major Power-to-X investment from the Netherlands
The Netherlands is to invest approximately DKK 1 billion (≈ EUR 134 million) in a large-scale Power-to-X project in Denmark according to an agreement signed on June 19, 2020, between the Dutch Climate Minister Eric Wiebes and his Danish counterpart Dan Jørgensen. The investment will be included in the subsidy pool for a Power-to-X project, which the Danish government has proposed in connection with its first draft action plan on climate action.
According to a statement from the Danish Ministry of Climate, Energy, and Utilities, all Danish electricity generation is to come from renewable energy sources by 2027. This will require more renewable energy and opens up the opportunity to develop new climate solutions based on green power.
Up to 100 MW PtX
The Danish government has specifically proposed establishing two energy islands, in the North Sea and on the island of Bornholm in the Baltic Sea, as well as investing in the development of new technologies that allow the green power to be used in several parts of society.
The Dutch investment will be used to establish a large-scale Power-to-X plant – up to 100 MW – in Denmark, to develop technologies for storing and converting green power into green fuels aka electro-fuels (e-fuels) for heavy-duty vehicles (HDVs), shipping, and aviation.
This is a huge vitamin injection for the green transition. The deal gives us around DKK 1 billion for the development of the green technologies of the future. We must utilize the large amounts of green energy from the energy islands for much more than we are used to. It can either be for storage or as fuel in trucks, cargo ships, and aircraft. It’s going to make a noticeable difference to the climate, said Danish Climate Minister Dan Jørgensen.
Builds on collaborative strengths and existing cooperation
A state financing pool will be established to support the setup of the PtX project. That is over five times the capacity of the largest PtX plant in the world today. The Netherlands is far ahead in terms of hydrogen production, while Denmark is far in wind power.
In Denmark, we have a really good starting point for developing Power-to-X. We have significant wind resources, a well-functioning energy system, and strong business skills. The Netherlands has a great deal of experience in hydrogen production. The partnership is not only a unique opportunity to finance some of our green ambitions, but it will also strengthen international cooperation and knowledge sharing in the field, said Minister Dan Jørgensen.
Denmark and the Netherlands already have cooperation in the field of energy, so the new agreement is a natural next step.
I really appreciate that Denmark is at the forefront of the green transition, especially in the field of hydrogen. The Danish-Dutch agreement is an expression of our shared green ambitions, which we will continue to work on in the future. I would like to thank Dan Jørgensen for the cooperation, said Dutch Climate Minister Eric Wiebes.
Transfer of RE share
The agreement also helps the Netherlands meet its current 2020 renewable energy target. EU rules allow Denmark, which over-fulfills its 2020 renewable energy target, to help the Netherlands meet its target. Denmark’s EU renewable energy target is 30 percent in 2020 and the forecast is that it will reach 41 percent in 2020.
The transfer does not however exempt the Netherlands from fulfilling the EU’s renewable energy target. According to EU rules, in the period 2021-2030, countries must not fall below their 2020 targets.
The Commission calls for statistical transfers to ensure a cost-effective deployment of renewable energy, taking into account the different geographical conditions and opportunities of the countries.
The specific design of the project and the grant scheme to manage the funds will be determined at a later date and will be discussed with the Netherlands, and the final implementation will depend on negotiations with the parliamentary parties.
The agreement also includes a Memorandum of Understanding (MoU), which covers the energy field in general and ensures closer bilateral cooperation in areas such as district heating, energy efficiency, and offshore wind.