Solutions must be developed to convert electricity from renewable sources into products that can be used to reduce emissions from those segments of the transport and industrial sector that have no cost-effective alternatives to fossil-based energy.
Denmark has a series of competitive advantages when it comes to green hydrogen: abundant wind resources, a highly integrated energy system as well as innovative actors across the whole hydrogen value chain. The Danish Government wants therefore to play a central role in creating the right framework for the development and deployment of green hydrogen technologies.
Achieving the goal of 70% reduction in emissions by 2030 will require innovative new tools and investments in the green technologies of the future, including green hydrogen. Denmark is facing an enormous challenge in having to find ways to bring down emissions in hard-to-abate sectors, such as heavy industry and especially heavy-duty transport such as long-haul road freight, shipping and aviation. Green hydrogen has a key role to play.
In spite of its huge decarbonization potential, there are still some challenges to tackle, such as lack of sufficient demand due to green hydrogen’s higher costs compared to fossil and bio alternatives. Although most of green hydrogen technologies are well known, there is currently no large-scale production – neither in Denmark nor abroad. This makes cost reduction, especially when it comes to investment costs (CAPEX), quite challenging.
Energy Compact Description
The Danish Government’s ambitions in the field of green hydrogen are described in general terms in the Agreement on Energy and Industry from 2020, a political agreement supported by a vast majority of the Danish Parliament. The agreement allocates min. 750 million DKK to a subsidy scheme aimed at supporting the establishment of large-scale Power-to-X plants. The subsidy scheme is financed by a partnership with the Netherlands on so-called “statistical transfers” of renewable energy shares.
In addition, a detailed and comprehensive national strategy for green hydrogen and hydrogen-based technologies (Power-to-X) will be presented by the end of 2021.
At European level, the Government is promoting a decarbonized European energy system by 2050 with particular focus on increasing the use of renewable energy and the electrification of fossil energy consumption, such as by using Power-to-X technologies for the production of green hydrogen and other hydrogen-based products (e-fuels).
In June 2021 the Danish government and a majority of the Danish Parliament also reached an agreement on allocating 850 million DKK to Danish participation in a European project of common European interest (IPCEI) on hydrogen.
Energy Compact Indicators
- National strategy on green hydrogen and Power-to-X launched by end of 2021
- Min. 750 million DKK to a tender for Power-to-X projects
- 850 million DKK to Danish hydrogen projects within the European IPCEI-framework
- Hydrogen and Power-to-X are among the four missions launched within the Government’s Green Research Strategy (2020)
“The capital cost of the hydrogen generation plant and Fuel Cell system is very high making P2P & energy storage solution unviable. For the overall system to become viable, ramping up of manufacturing capability and setting up of manufacturing facilities in India needs to be incentivized. The overall round-trip efficiency also needs to be improved by way of technical improvements to reduce the requirement of renewable power“