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REGIONS EUROPE


THIS ISN’T JUST DEVELOPMENTALONGTHE CONTINUUM – THIS IS REALLYAPATHBREAKER


Energyislands: thekey to net-zero T


DENMARK’S FIRST-OF-ITS-KIND OFFSHORE WIND HUB IS A BLUEPRINT FOR EUROPE, ASIA AND BEYOND. DANIELLE MYLES REPORTS


he momentum gained by the transition to clean energy is proving many doubters wrong,


even in one of the world’s pioneers in renewable energy, Denmark. “When we first shared this idea in 2017, peo- ple called it Never-Never Island,” recalls Hanne Storm Edlefsen, vice


president of Danish grid operator Energinet. “They said it was too early and would be too dif- ficult, technologically.” Just four years later, the project once consid-


ered aswhimsical as Peter Pan’s imaginary, fara- way land is becoming reality. In February, Denmark’s government gave the green light to build theworld’s first energy island, an artificial landmass located80kmoff theDanish coast that upends the current approach to offshore wind. With a capacity of 10GW, it will dwarf the


world’s existing and planned offshore wind pro- jects, which seldom exceed an installed capacity of 1GW. Until now, offshore wind farms have been constructed as individual units that con- nect directly to a single country. The island in the North Sea, however, will collect power from upto 600 wind turbines scattered across an area the size of 64 football pitches, and transmit it to Denmark, Germany, Belgium and the Netherlands. The island itself will feature a har- bour, operation and maintenance facilities, accommodation and, further down the line, a ‘power-to-X’ plant to generate electrofuels such as green hydrogen or ammonia. Exactly 30 years after building the world’s


first offshore wind farm,Denmarkis once again taking the industry to the next level. “This isn’t just development along the continuum—this is really a pathbreaker,” says Thomas Dalsgaard, a partner at Copenhagen Infrastructure Partners (CIP) who is advising on the project.


Advanced real-estate investment The island, which will be run as a majority state-owned public–private partnership (PPP), is


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still in its infancy. The private partner will be selected in 2023 and power generation will begin in 2030. Even then, it will be 3GW flow- ing solely to Denmark, with more capacity and pipelines to other countries added over time. But the business case is compelling. Offshore wind is one of the most expensive


forms of energy and cables account for some 15%of total expenditure. Bundling power from multiple wind farms and sending it to shore via a single transmission cable cuts costs sub- stantially. Mr Dalsgaard says it is these savings, plus economies of scale and the benefits of a closer maintenance hub, that “brings this vision to life”. The othermajor selling point is a reduction


in intermittence. Excess power can be con- verted into electrofuels or stored in utility-scale batteries onsite, and dispatched when wind power is low. These processes, neither of which are feasible at conventional wind farms, make wind a more reliable source of electricity and eliminate the risk of prices dropping below zero when supply markedly outstrips demand. “From an investor perspective, [negative


pricing] is one of the main challenges of off- shore wind,” says Torben Möger Pedersen, chief executive of PensionDanmark, which pioneered pension funds’ investment in the sector a dec- ade ago. “Until now, we have thought of each wind farmas an isolated asset. But now we are thinking about offshorewindas part of a system by using these surrounding technologies.” PensionDanmark is part of a consortium


called VindØ, which is entering the race to become the government’s PPP partner. The entire venture is tipped to cost DKr210bn ($33bn), making it Denmark’s largest ever con- struction project, but Mr Pedersen downplays the magnitude of the task. The PPP does not extend to the wind farms themselves, but rather covers the construction and manage- ment of the artificial island. He estimates that this will cost around €1.2bn and describes it as


www.fDiIntelligence.com April/May 2021


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