New technologies often enter the mainstream slowly, and then in a sudden rush. This has proven to be true for everything from air travel to televisions and even renewable energy. Innovation, competition, and economies-of-scale mean that these technologies gradually become cheaper and a part of everyday life.
Whether the same will be true for Power-to-X, which can reduce emissions in hard-to-decarbonise sectors, is still uncertain. While the technology is proven, key pieces of the puzzle are still missing before the sector can take off. That is the main takeaway from a first-of-its-kind survey of the central actors and stakeholders in the Danish Power-to-X sector, conducted by Ramboll in November.
The survey was aimed at the entire value chain from energy producers to investors and end users. They say Power-to-X can contribute to carbon reductions by as early as 2025, but also caution that the sector needs help to grow. Specifically, they underscore the need for short-term subsidies, a commitment to expand the share of renewables by 10 GW or more, and carbon tariffs.
Massive expansion of green energy
“The message from the sector is loud and clear: If Power-to-X is to contribute to Danish and global climate ambitions, a massive expansion of green energy is needed,” says Mogens Skov, Director for Power at Ramboll. “10 GW is equal to building at least 10 more offshore windfarms like the planned 1GW Thor windfarm in the North Sea, which will be Denmark’s largest when finished, so the scale of ambition is hard to understate,” he says.
While the survey focuses on the Danish Power-to-X sector, the insights are globally relevant.
“Expanding the supply of renewable energy is a key prerequisite for Power-to-X in Denmark and elsewhere, and urgency is of the essence because of the large quantities of power needed to make Power-to-X viable,” says Anders Nimgaard Schultz, Vice Director for Power Generation at Ramboll.
“In addition to the energy needed for Power-to-X, we must not forget that we are rapidly electrifying societies, which adds an additional pressure on the production of renewable energy. Therefore, it is crucial that there is a push to dramatically expand renewable energy production,” he adds.