Danish export credit agency EIFO‘s mission is to make the world greener in cooperation with Danish companies. Having fulfilled this mission with wind turbines, EIFO and Danish trade and industry are set to repeat their success with the next green technologies.
Harnessing the Power of Wind: Denmark’s Leading Role in Green Energy
When you stand on the west coast of Denmark and feel the harsh wind blowing in from the North Sea, it feels obvious: the forces of nature can be converted into energy.
Danish companies are among the best in the world at this. You don’t have to go very far from the west coast of Denmark before you find large offshore wind farms with turbines spinning diligently and generating green energy for millions of people. With companies like Vestas and Siemens Gamesa plus a wealth of sub-suppliers, Danish trade and industry has succeeded in creating a global green business fairytale.
Financing Wind Energy: The Role of EIFO in Supporting Global Projects
They did this with the support of the Export and Investment Fund of Denmark (EIFO). Wind farms are so expensive that the private market cannot provide the financing without help, and the financing structures are complex in size, with financing and risk hedging coming together from many different actor. EIFO is an expert at this kind of thing.
Over the past two decades, EIFO has participated in the financing of more than 190 wind farms from Canada to New Zealand. In fact, EIFO has been involved in the financing of over 30 per cent of the world’s total offshore wind capacity, with the exclusion of China.
But the global green transformation of our society is a gargantuan task that requires more than just wind turbines. One next step is decarbonisation of the transport sector with its fuel-demanding cars, trucks, planes, ships etc. Some of this can be handled by electrification. But certain hard to abate sectors such as heavy road transport, aviation and shipping require the development of sustainable fuels.
EIFO and Danish companies are now set to repeat their business fairytale with Power-to-X (PtX), a technology heralded as the next big player in the green transition.
With PtX, electricity from renewable energy sources can be used to split water into hydrogen and oxygen. The green hydrogen can either be used directly or further processed into various forms of green fuels. The potential is great, and EIFO is working with both Danish and foreign developers and sponsors to find financing for their projects.
The Future of Green Energy: Investing in Power-to-X Technology
But the need for investment and financing is enormous. The new technologies are expensive, and green fuels cannot compete with existing alternatives in terms of price.
In other words: In a world where the infrastructure is designed for fossil energy, you don’t create a PtX revolution in a day.
It requires cooperation between many actors – public and private, national and international. Just as when the market for offshore wind turbines was built.
As a state-owned financial institution with an international outlook EIFO is a strong partner in financing, value creation and innovation. And with the wind adventure under the belt, EIFO also has great opportunities to act as a midwife to help launch the green technologies of the future.
The PtX story may end up being just as impressive as the one about wind.
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