Copenhagen Energy Islands (CEI) is a new company to develop energy islands globally. It was established by Danish investment fund Copenhagen Infrastructure Partners (CIP), which has considerable experience in offshore wind energy. He is currently using his expertise to develop 10 such island projects in the North Sea, Baltic Sea and Southeast Asia. CEI will focus on the development of the initial concept and the development of the investment at the initial stage. It then intends to sell projects to infrastructure funds for further development and construction. Who exactly is behind Copenhagen Energy Islands?
Copenhagen Energy Islands was established as part of Copenhagen Infrastructure Partners, the world’s leading renewable energy fund management company. CEI is an independent company majority-owned by CIP and a group of Scandinavian, European and North American investors with experience in implementing renewable energy solutions. Among them are: PensionDenmark, PFA, SEB and Andel. Why exactly did energy islands become the company’s focus?
We constantly hear that we need to increase energy production, preferably making it independent of fossil fuels. So we are developing RES technologies. Great potential is seen in offshore wind energy. The key factors are stable wind power and the ability to acquire larger areas for power plants than on land. With that said, it is not the construction of new farms that is the challenge now, but their large-scale integration into global energy systems, according to CIP founder and managing partner Jakob Baruël Poulsen. He said: “We see energy islands as a key tool in solving this challenge and realizing the ambitious goals of offshore wind around the world.”
So what are energy islands? These are large-scale offshore centers designed to store energy generated at wind farms and transmit it to destinations. Such an island may have electrolyzers to convert energy into hydrogen, which becomes an energy store and an easier medium to transport energy than electricity (due to its distance from land). Energy islands will enable the scaling of offshore wind power around the world. By combining proven technologies in innovative ways, they will make the construction and integration of offshore wind farms cost-effective and feasible on a much larger scale.
Over the past 10 years, the number of large wind farms has increased significantly (from about 100 MW to about 1 GW). This trend is expected to continue in the coming decade, as larger plants mean better utilization of offshore wind resources and a reduction in the levelized cost of electricity (LCOE). Another key trend is the commercialization of power-to-X technology to produce green fuels. They can be used to decarbonize sectors such as heavy industry and transportation. Projections say that by 2050. Global demand for green hydrogen and its derivatives will increase about 40 times.
Solutions including cross-border interconnections and sector linkages are needed to accelerate deployment and integration of offshore wind and power-to-X. The energy islands are the next step in the deployment of offshore wind and power-to-X, and will thus play a key role in phasing out fossil fuels and accelerating the green transition.
Energy islands will help make the green transition successful. The world’s largest economies plan to deploy more than 500 GW of offshore wind capacity by 2050. This means that in the next 25 years they want to launch more than 10 times as many farms as have been installed in the last 35 years. Better tools for scaling and technology integration are needed to realize these plans. The biggest challenges in this area are cost-effectiveness and speed of deployment, and integration with global energy systems (in the form of electricity or green hydrogen). This is where energy islands come to the rescue. How can they solve the problems mentioned above?
First, energy islands reduce costs. Building a single island to handle 10 GW of offshore wind power is cheaper than traditional high-voltage DC converters on offshore platforms. Why? Each additional steel jacket is more expensive than each additional hectare on the island. In addition, hydrogen production on the island will significantly reduce transmission costs. This is due to the fact that hydrogen pipelines cost approx. 20 percent. High-voltage cable prices for direct current. In addition, they make it possible to transport larger amounts of energy with lower losses. This means a lower levelized cost of hydrogen (LCOH) than when it is produced onshore from offshore wind power.
Second, the islands will make it possible to accelerate the pace of offshore energy deployment. Its operation is based on a local and existing supply chain, consisting of maritime infrastructure such as ports, bridges and tunnels. So it can be easily mobilized and expanded, creating additional jobs for the local population. Creating a 10 GW offshore wind power island is much faster than building offshore converter platforms.
Third, energy islands will help reduce grid constraints. Producing hydrogen directly on the island will increase the use of power cables and greatly reduce the need to expand the power grid. It will also enable maximum use of wind resources by using them to produce hydrogen on the island when energy prices are low and to export energy when prices are rising.
The above characterization shows that offshore energy centers will lower the price of energy. By placing wind farms closer to islands, we can minimize the need to lay long underwater cables leading to land. In addition, they will give more flexibility to direct energy where it is needed most. As the use of renewable energy increases, it is difficult to balance its production and consumption. Energy islands can accumulate surpluses during periods of lower demand. When demand peaks, energy can be distributed to where it is most urgently needed.
Preparations for the construction of the first energy islands are already underway. In March 2024. work will begin on such an installation 45 kilometers off the Belgian coast. The project is being developed by Belgian power grid operator Elia, which plans to complete construction in mid-2026. The Danes and Germans also have a project. They want to place an energy center on Bornholm and in the form of an artificial island in the North Sea. However, their plans include construction by 2030. Belgium will most likely overtake them, but it is their venture that interests us more. Why?
The energy island of Bornholm will be connected to neighboring countries. Poland will also benefit. We will be able to receive supplies of energy transmitted from the island and develop our wind power industry. The ability to connect newly built offshore farms to the island will make these investments more profitable. Polish developers and wind turbine manufacturing yards will benefit.