Danish consortium raring to bankroll North Sea energy island
- Business & Finance
A consortium including three of the largest Danish pension and energy companies is ready to finance and operate the recently approved energy island in the Danish North Sea.
Earlier this week, the Danish parliament approved a new Climate Action Plan which calls for the development of two energy islands, one in the North Sea and one in the Baltic Sea, with a combined capacity of 5 GW by 2030.
The new plan also approves the development and construction of one more wind farm in the Baltic Sea with the capacity of up to 1 GW.
The largest of the new energy islands is going to be an artificial island in the Danish North Sea.
The island is going to be established by 2030 at the latest with 3 GW offshore wind connected through it.
In time, the island will connect 10 GW offshore wind and host electricity storage and power-to-X, as well as housing, O&M facilities, and HVDC converters for transmission and interconnectors.
PensionDanmark, PFA, and SEAS-NVE are ready to finance the energy island, initially with up to €50 million to develop the project.
The partners are assisted by the green infrastructure investment company, Copenhagen Infrastructure Partners (CIP).
The consortium plans to finance and develop the project entirely without government funding.
“The energy island in the North Sea is a very visionary project which will play an important role in the economically sound expansion of offshore wind capacity,” said Torben Möger Pedersen, CEO of PensionDanmark.
”At the same time, developing and constructing the island will create many new Danish jobs that will help the Danish economy in recovering from the effects of COVID-19. It is therefore our hope as investors that the process going forward will be fast and inclusive, making it possible for industrial players to mitigate the risk associated with such a huge infrastructure project.”
The partners see the state’s ambition of an energy island as very visionary and value-adding for Danish offshore technology. Design and construction of the energy island is a large and demanding project, but can be implemented with the existing technology, the consortium said.
“A wind island in the North Sea will add even more momentum to the green transition, and the concept has global potential. That is why we at PFA are ready, together with the partners in the consortium, to lift this historic project and thereby ensure that PFA’s 1.3 million customers’ savings are put to good work in the best possible service,” said Kasper Ahrndt Lorenzen, Group CIO of PFA Pension.
The energy island will be developed in stages in line with increasing Danish electricity demand, the development of electricity storage technology or, for example, Power-to-X, as well as the connection of the island to other countries around the North Sea.
“In the future, society’s energy supply must be covered to a greater extent by renewable energy if we are to succeed with the green transition,” said Jesper Hjulmand, CEO, SEAS-NVE.
”SEAS-NVE has a long tradition of taking considerable responsibility for developing the Danish energy system. A development that is driven by strong professional insight. Among other things, this is the knowledge we will bring into play in connection with the energy island. Most recently, we have specific experience from energy storage experiments.”