Denmark will cede part of its excess renewable energy output to the Netherlands under an EU co-operation agreement in a so-called statistical transfer to help the Dutch reach their 2020 green energy target, in exchange for a payment of at least €100m ($112m) that will help fund Danish hydrogen ambitions.

Under the deal signed Friday by the Dutch and Danish energy ministers – Eric Wiebes and Dan Jørgensen – Denmark will transfer a volume of 8 terawatt hours of renewable power for the Netherlands’ to still achieve its 14% renewable energy target for 2020. The Dutch State is granted the option to receive an additional 8TWh of renewable energy in case the initial volume is not sufficient, but then would need to pay another €100m.

Denmark will use the proceeds to upscale power-to-x technologies in Denmark, with a particular focus on the production of some 100MW of hydrogen produced via electrolysis from renewable energy ('green hydrogen'), the agreement seen by Recharge reads.

The exact design of a tender for the hydrogen electrolysis capacity will be determined by Denmark later, and will be discussed with the Netherlands.

“This is a huge vitamin injection for the green transition. The deal gives us around DKr1bn for the development of the green technologies of the future,” Jørgensen said.

“We must utilise the large amounts of green energy from the energy islands for much more than we are used to. It can either be for storage or as fuel in trucks, cargo ships and aircraft.”

Denmark has plans for a massive expansion of its already large offshore wind capacity that include building one or two energy islands in the North or Baltic Seas that would function as hubs for interconnected offshore wind, and supporting facilities such as energy storage or green hydrogen production.

But while no country has more experience in offshore wind than Denmark (where the first wind turbines were placed in the water in 1991 at Vindeby), Jørgensen acknowledges the Netherlands are far ahead in terms of hydrogen production.

“The Netherlands has a great deal of experience in hydrogen production. The partnership is not only a unique opportunity to finance some of our green ambitions, it will also strengthen international cooperation and knowledge sharing in the field.”

The Dutch-Danish deal follows up upon similar, but smaller EU agreements between Luxembourg, and Lithuania and Estonia, over statistical transfers of renewable energy output to Luxembourg, which wasn’t able either to reach its 2020 renewable energy target, while the Baltic nations has already exceeded their own goals.

The statistical transfer agreements are meant to ensure that the EU as a whole will be able to meet is 20% renewable energy target by 2020.

Denmark and the Netherlands also signed a memorandum of understanding to ensure a closer bilateral cooperation in areas such as district heating, energy efficiency and offshore wind.

It includes a potential cooperation in the building of offshore wind hubs in the North Sea, and jointly fostering offshore wind development in third countries.

Wiebes in a letter to parliament stressed that while the Netherlands have struggled to meet their 2020 renewables target, the country now plans to reach a 30-32% share of renewable energy in 2030, overshooting the 27% goal pledged to the EU.

The country has one of the world's most ambitious offshore wind expansion plans, with some 11.5GW expected in the water by 2030, but had started to build up large renewable energy capacities later than some of its neighbours, such as Germany or Denmark.