BAKU, Azerbaijan, June 11. Denmark and Norway hold important pieces to solve the European energy puzzle, reads the article by András Simonyi and Morten Svendstorp, published by the Atlantic Council, Trend reports.
The article reveals that first, Norway is the largest net exporter of electricity in Europe, surpassing even the EU’s largest economies such as Germany and France. However, as hydropower produces 86 percent of Norway’s electricity, any new offshore wind power could be used for hydrogen production. An important factor will be the combination of the fluctuating wind power and the use of Norway’s hydropower as a “battery” that will allow the country to utilize the electricity surplus as a cheap and reliable source of power for electrolysis.
Second, both countries have substantial potential to expand their offshore wind energy capacity. Denmark has pledged to build 35 GW of offshore wind power capacity by 2050 that could power 53.66 million households. However, as Denmark only has 2.8 million households, the expansion of offshore wind power will create a significant surplus of electricity which the country intends to export to its neighbors and use to produce hydrogen. Norway also recently launched a plan to develop 30 GW of offshore wind power by 2040, which calls for an expansion of its grid connections to the UK, Germany and Netherlands.
Third, the Danish government has set a goal of building up to 6 GW of electrolysis capacity by 2030. Norway has yet to set a goal for its hydrogen production capacity, but its government’s hydrogen roadmap, published last year, calls for the construction of two industrial hydrogen plants. More importantly, as the Norway’s sovereign wealth fund boasts $1.2 trillion (more than the total GDP of Mexico or Indonesia), the country could play a significant role in the hydrogen economy by providing risk finance both at home and abroad.
Fourth, despite the hype about “Nordic socialism” in the US, both Denmark and Norway are strong market economies that attract considerable foreign investment. In fact, the World Bank most recent Ease of Doing Business Index ranked them fourth and ninth globally (the US was placed sixth). This bodes well, as almost 7 GW of electrolysis capacity is under planning in Denmark right now.
Ending the EU’s reliance on Russian fossil fuels will require a massive scale-up of renewables as well as faster electrification and replacement of fossil-based heat and fuel in industry, buildings and the transport sector. The clean energy transition will help lower energy prices over time and reduce import dependency. Additional investments of €210 billion are needed between now and 2027 to phase out Russian fossil fuel imports, which are currently costing European taxpayers nearly €100 billion per year.
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