Is hydrogen production the answer to cutting billions for Energy Islands?

24.08.2023

As part of the Danish climate agreement for energy and industry in June 2020, it was decided to build the world's first two Energy Islands in Denmark, which marked a groundbreaking step in the green transition.

The Energy Islands are considered visionary projects that can speed up and realize an unprecedented expansion of offshore wind turbines. But since early spring 2023, the tender for the Danish Energy Island in the North Sea has been postponed indefinitely, with the aim to circumvent the current financial challenges associated with the Danish Energy Islands.

These challenges have been addressed in a new concept analysis by COWI and Brinckmann, zooming in on what can conceptually be gained if Energy Islands are thought of as integrated energy systems, with a focus on system optimization and transport of energy such as hydrogen, rather than as production hubs for electricity.

The results indicate that a significant portion of the 50 billion DKK earmarked for the North Sea Energy Island can be cut if most of the island’s 10 GW capacity is transformed into green hydrogen within the area itself.

It is shown that an integrated energy island with green hydrogen (PtX) facilities can potentially reduce construction costs by 20-30 billion DKK.

The current case the Danish government has been working on focuses on distributing clean electricity to Denmark, Belgium, Germany, and the Netherlands. This significantly increases the project's cost with electrical systems and connections covering such long distances.

Jan Behrendt Ibsø Co-author of the analysis and Senior Market Director in COWI

Out of the expected 10 GW of energy production from the upcoming North Sea Energy Ssland, Denmark can transport approximately 2 GW to the mainland. The remaining portion must then be transmitted to other countries such as Belgium, Germany, and the Netherlands or sent to the mainland and converted into green hydrogen there.

But electricity transmission is costly when building power cables that stretch to Germany, Holland, and Belgium. Conversely, the infrastructure for transporting hydrogen to both Denmark and abroad is much cheaper, and it's here - in the construction costs - that the 20-30 billion DKK savings can be found.

It is overall much cheaper to produce green hydrogen on the energy island, 100 km out in the North Sea, and transport the hydrogen through pipelines than to transport electricity via transmission cables. Converting to hydrogen directly on the energy island and very close to where the green power is produced minimizes losses and will optimize the utilization of the energy system.

 Jan Behrendt Ibsø