The potential of energy islands for Sweden is enormous

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Sweden should explore the possibilities of investing in energy islands. It is a future-proof solution for connecting electricity systems in different countries, offshore renewable power generation and, for example, hydrogen production, writes Oskar Almén.

The new government needs an ambitious energy agenda. The journey towards net zero emissions requires a dramatic transformation of our energy system. In Europe, 1.3 billion tonnes of fossil fuels are used annually, which need to be replaced by either synthetic fuels or electricity.

In addition, 422 TWh of fossil electricity production needs to be phased out in favor of a large-scale expansion of mainly offshore wind and solar power. But the transition in the industry cannot be carried out without an equally heavily expanded hydrogen infrastructure.

The fundamental challenge associated with renewable electricity generation from wind, solar and wave power is that it is unplanned. The supply gap that arises when supply exceeds demand – and vice versa – therefore needs to be met through parallel investments in energy carriers and energy storage (Power-to-X, to use to produce something that is not direct-acting electricity), especially hydrogen, which is also a crucial component in the industrial transition, such as fossil-free steel production.

It is time for Sweden to accelerate the expansion of both offshore power generation and hydrogen infrastructure.

For this rapid deployment of offshore renewable electricity generation and equally large-scale hydrogen production to be possible, barriers need to be removed and new doors opened.

Three aspects in particular are important in both the short and long term:

Firstly, the permit processes need to be shortened and simplified significantly. Today, in the case of offshore wind power, it can take up to twelve years before all permits are in place. One explanation for why the time required is so extensive is that the responsibility for applying for the right permit, for contact with the authorities involved and for carrying out geological surveys of the land and seabed, mainly falls on the applicant party.

Sweden should consider a system that, on the contrary, shifts responsibility for the process to a coordinating authority. For example, Denmark has succeeded in shortening its permit processes considerably in this way.

Secondly, infrastructure for hydrogen production and distribution needs to be included at an early stage in the planning of renewable electricity generation and also included in a national distribution network, in order for hydrogen to be available to both industry and consumers. There is great scope for innovation in business models and a need for traditional producers and distributors to collaborate in new ways.

Thirdly, Sweden, together with neighboring countries, should explore the possibilities of investing in energy islands, a future-proof solution for connecting offshore renewable power generation on a large scale with infrastructure for Power-to-X.

Denmark was the first in the world to announce the construction of two energy islands, one of which is intended to be built on Bornholm and the other is to be artificially constructed 80 kilometers off the Danish west coast. The islands will serve as hubs for large-scale energy production and distribution, and can be connected to several countries' transmission networks.

The potential is huge, as are the costs. Denmark expects investments equivalent to approximately SEK 300 billion. Several technical and commercial challenges remain, but Sweden, together with the Nordic and Baltic countries, should follow Denmark's example and explore the opportunities that energy islands entail.

Sweden has an opportunity to take a big step towards emission neutrality and lead the European transition, if the necessary investments in offshore power generation and hydrogen production have an impact.

The challenges are several – both regulatory and commercial – but investing in the establishment of hydrogen production in connection with the construction of wind and solar power, means that hydrogen can become an economically and environmentally sustainable alternative in the near future. Thus, the foundation can be laid for the green transition and new innovations in a new, fossil-free, Swedish industry.