How Nordic wind and wealth can wean Europe off Putin’s gas – Atlantic Council
The European and transatlantic geopolitics of energy have changed dramatically over the last few months. Prior to the invasion of Ukraine, Russia provided the EU with 40 percent of its annual gas demand. Just three months later, the European Commission put forward REPowerEU, a bold plan to reduce its decades-long dependence on the supply of Russian fossil fuels to a minimum.
However, moving away from Russian gas will be particularly difficult and cannot be achieved quickly. While increasing energy efficiency and switching to other suppliers—including the United States—as well as ramping up LNG capacity both at home and in supplier nations are part of the short- to medium-term remedy, hydrogen will be critical to the long-term solution to the challenge.
Thus, it is encouraging that on the same day that the EU launched REPowerEU, Denmark, Belgium, the Netherlands, and Germany signed a declaration to build 65 gigawatts (GW) of offshore wind power capacity and 20 GW of hydrogen capacity by 2030. While German industry is poised to be the driver of demand for hydrogen, Denmark and Norway (though the latter is not an EU member) can play a key role in creating a reliable, sustainable, and profitable European hydrogen market. Although the two Nordic countries have a combined population of just 11.3 million people (less than Ohio), they are not only both founding members of NATO, but also hold important pieces to solve the European energy puzzle.
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 …….