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DCBF on TV2 Business: New MoU on Offshore Wind and District Heating

On June 7, Hans Henrik Pontoppidan, Secretary General of Danish-Chinese Business Forum was interviewed live on TV2 Business. Here he discussed the prospects for Danish businesses in the the Memorandum of Understanding (MoU) on renewable energy and other areas of sustainable development, which was signed in Beijing during the Danish Minister for Energy, Utilities and Climate, Lars Chr. Lilleholt's visit to China.

The following are Hans Henrik Pontoppidan’s main arguments from the interview: 

Why is this important?
China, which already is the largest within wind and photovoltaic power in the World, are soon to address the area of offshore wind. China has today 161 GW of on-shore wind but only less than 2 GW offshore wind. That is soon to change. Only a few years back China signaled in their 13th 5-year plan that they wanted to undertake 30 GW installed offshore wind capacity by 2020. This has later been revised; reduced to 15 GW and lately to 5 GW of installed capacity and 10 GW of initiated projects. This signals that China has realised and accepted that the complication factor in offshore wind is much more complex than when rolling out on-shore wind. It requires a whole new set of infrastructure support to be completed successfully. It is in this light that the recently entered MoU should be seen, as Denmark has a long history and expertise in offshore wind, gained from the harsh North Sea. 

Offshore wind in China is an obvious development in order to reduce CO2 emissions. The electricity demand is highest along the coast line, where all the big cities are located e.g. Beijing, Shanghai and Guangzhou, which is a great advantage compared with, for instance, the east coast of the USA, which has the opposite challenge.  

What can Danish industry gain by executing such agreement?
There is no doubt that offshore wind in China will be a restricted area for none-Chinese players in general. DCBF would like that a Danish designed wind farm with Danish turbines, during the entire life of the project, producing at maximum capacity also after 5, 10 and 15 years of operation. The solution in this respect is service and maintenance combined with a model in which all parties have aligned interests. DCBF also believes that it is important to use this opportunity to introduce more innovative elements, rather than just copying the learnings from the North Sea. The purpose is to even further reduce cost of energy (bringing LCOE down) - and innovative solutions will be of high interest to the Chinese counterparties in the concept as stipulated in the 13th 5-year plan and in the China Manufacturing 2025 plan, respectively.  

What could the wider aspects potentially be? 
My hope is that a successful roll-out along with showing the real-life complication factors and our ability to cope with this, will make the Chinese partners to “pave-the-way” for additional projects in China. Alternatively, I hope that the Chinese partners together with the Danish partners will come to an agreement to join forces in approaching APAC subsequently, which has a potential of 750 GW of wind installed capacity. Hopefully, the result is a model in which the LCOE are substantially reduced, but in a concept where the ultimate wind park owner insists on having key elements like e.g. the nacelle etc. of a Danish make and quality. This could be developed to become an alternative “go-2-market model” for the chosen OEM. 

I believe that this is a fantastic opportunity to create and visualise Danish offshore wind expertise. An opportunity which most not be missed.