For many years we have been talking about the ambitious Danish goal of 50% of electricity supply from wind power by 2020 and the vison of independence from fossil fuels for the country by 2050. Today electricity generation based on renewable energy sources (RES) constitutes almost 2/3 of the demand.
We are now very close to a successful fulfillment of the 2020 goal with help from the traditional toolbox for “horizontal integration”; strong transmission grids and interconnectors, international wholesale markets, flexible power plants and a proactive approach to system balancing in daily operations.
We have also realized that these tools will not suffice for the remaining transition towards independence of fossil fuels. A new change of paradigm is required, and we expect a “vertical integration” based on retail-markets, digitization and coupling of sectors to become the major enabler.
Recent studies published by Energinet show that the Power to X (PtX) technology is now becoming economically viable in a Danish context within the relevant time frame. With this scalable and in principle unlimited resource available, in combination with the vast offshore wind power resources around Denmark, we will also be able to realize the goals for 2050.
Vast wind power resources close to Denmark
The North Sea is the global center for development of large-scale offshore wind power. 11 GW – equivalent to 60% of the global offshore wind power capacity – is installed in the North Sea. Several scenarios indicate installed capacities by 2030 of more than 5 times today’s capacity, covering up to 10% of Europe’s demand for electricity. An analysis published by Windeurope indicates an economically viable potential of 350-400 GW by 2030, of which 80-100 GW is situated in the attractive Danish part of the North Sea with shallow waters and good wind resources. This would account for approximately half of Europe’s electricity demand.
Integration in the electricity system alone isn’t enough
The traditional horizontal integration in the electricity system will not enable the efficient utilization of wind power, when shares in the countries around the North Sea increase markedly as illustrated in the following figure with scenarios for 2030 and 2040.
The traditional electricity demand only constitutes around 20% of the energy demand. A massive integration of wind power, as illustrated, requires efficient sector coupling with substantial substitution of fossil fuel in other energy sectors.
Wind power must substitute fossil fuels in other energy sectors
An analysis from Eurelectric- the European electricity industry organization – (see Decarbonization pathways – European economy: EU electrification and decarbonisation scenario modelling. Eurelectric, 2018), points out that by 2050, the electrification in Europe may increase the direct electricity consumption to reach 40-60% of the total use of energy. The remaining 40-60% of the energy consumption will have to be covered by other energy carriers than electricity.
In addition to direct electricity for heating and transportation, we see a huge potential in transforming the renewable electricity into high value products via electrolysis. With electrolysis, electricity can be converted to hydrogen to be used directly, methanised to be injected in the natural gas system (PtG) or converted to other high-value products such as liquid fuels, fertilizers, plastics etc. (PtX).
“Green electrons” to “Green molecules”
The conversion of “green electrons” to “green molecules” via electrolysis provides a very valuable resource for flexibility and security of supply for the electricity system. Electric vehicles and heat pumps can provide limited flexibility with respect to storage and time-shifting of demand, but the electrolysis process can run with full flexibility according to the electricity price and availability of RE-generation. Electrolysis can operate at full load or be stopped for weeks, and the products can be stored indefinitely. The technology is scalable and capacities are unlimited.
The primary value for electrolysis is the conversion of large amounts of renewable electricity generation into demanded high-value products traditionally based on fossil oil and gas. An increasing international demand for RE-based alternatives has driven up the market prices for RE-fuels, RE-plastics, RE-methanol etc.
Potential for electrolysis/PtG/PtX in Denmark
Denmark has a number of strongholds in relation to production of RE-based high-value products for the international markets:
- Denmark’s access to vast wind power resources is expected to ensure competitive electricity prices for electrolysis
- Excess heat from the PtG/PtX-process can be utilized in the district heating systems
- Denmark has a comprehensive natural gas system including underground storage facilities and strong competences for handling of various gasses
- Denmark has substantial experiences with and political focus on coherent energy planning and cooperation across energy sectors
- Denmark’s green brand and high share of wind power supports the credibility of the RE-product
If we succeed in developing and implementing efficient solutions for utilizing the benefits from PtG/PtX processes, Denmark will be in a good position for converting the vast wind power resources in the North Sea region into high-value RE products to be offered in the international markets.
Interest from large commercial players
Recent press releases from the world’s largest offshore wind power generator Oersted and the world’s largest container shipping company Maersk clearly indicate that large commercial players also have identified the “green molecules” as interesting enablers for the development and green transition of their businesses. As part of its bid for Holland Coast South 3 & 4, Oersted is working to establish green hydrogen projects which will be linked to Ørsted’s Dutch offshore wind farms. Maersk will invest significant resources for innovation and fleet technology to improve the technical and financial viability of decarbonized solution with focus on new carbon neutral fuels and supply chains.
A Bright Future
Electrolysis is by no means a new revolutionary technology. For many years we have seen the obvious benefits in a VRE-based energy system, while waiting for a breakthrough with respect to economics and efficiency. We see this happening now, not only due to developments in the technology for electrolysis, but also due to a combination of the technological options, availability of vast wind power resources and Danish strongholds in coherent energy planning and coupling of energy sectors. As one of the older engineers in the TSO-business, I finally feel very comfortable with Energinet’s commitment to ensure a secure and efficient transition towards a fossil-free electricity system by 2030 and fossil-free society by 2050.
I would like to acknowledge the assistance of Anders Bavnhøj Hansen and Carsten Vittrup of Energinet in the preparation of this blog.
VP, Associated Activities