While Denmark’s solar market faces grid-related challenges, a rapid rise in battery storage deployment is creating new opportunities for developers and investors, according to Johan Christensen and Jacob Engdal, board members of the Danish solar association Dansk Solcelleforening.
Speaking to pv magazine during the Smarter E event in Munich, Christensen and Engdal explained that standalone solar projects are becoming more difficult to develop, while hybrid projects are attracting growing interest.
“I think we all can see that PV has been suffering a bit,” Christensen said. “We have a lot of problems surrounding PV and new legislation, too much bureaucracy, and a lot of new rules which are going to be implemented.”
Amid challenges for solar, Christensen said battery storage is emerging as the major growth engine for Denmark’s energy market.
“We can see everywhere, from private households up to big utility projects, that more or less all applications are for storage,” he said. “It’s been more or less from zero to 100 based on 12 months. It’s going very fast.”
Christensen attributed the increase in the number of storage applications over the past year to developers seeking ways to optimize renewable energy projects and improve returns.
Unlike some European markets, Denmark does not offer subsidies for battery deployment, with market conditions acting as the key driver instead.
“Right now we actually don’t have financial incentives,” Christensen explained, adding that electricity market signals and relatively straightforward permitting processes for storage additions are helping drive deployment.
“Another incentive is that there’s actually not much bureaucracy if you just add storage to an already existing plant, compared to if you are installing a new plant,” he said.
Engdal told pv magazine that investors are increasingly favouring projects that combine multiple technologies.
“If it’s just a PV system, it’s not so interesting to finance [and can be seen as] too big a risk,” he said. “If it’s just a battery, too big a risk. If it’s just wind, too big a risk. But the more of these three you have together, or if you have all three, then the money is there.”
Engdal also clarified that access to capital is generally not a barrier for renewable energy projects in Denmark. “If you have a green investment, then it’s not a problem to find the financing,” he said. “We have more investors looking for projects.”
Both Christensen and Engdal pointed to concerns around grid infrastructure as a barrier for future projects.
Engdal said Denmark’s transmission system operator (TSO) has effectively paused approvals for some larger projects while it assesses the impact of growing renewable generation and increasing electricity demand.
He also highlighted the role that flexible grid connections could play in enabling more renewable energy projects to proceed and suggested that communication between project developers and network operators remains a challenge.
“That communication I see as the main problem,” Engdal said. “We should aim to get good dialogue with both the TSO and the DSOs.”
Despite these challenges, both Christensen and Engdal said long-term growth prospects remain strong, provided grid infrastructure and permitting frameworks can keep pace with demand.
Christensen and Engdal also said Dansk Solcelleforening is continuing to focus on reducing administrative barriers to renewable energy deployment.
“We’re always advocating for simpler processes within just installing, adding renewable energy, whether it’s storage or whether it’s other connections,” Christensen told pv magazine.
The growing importance of batteries is also changing how the sector views renewable energy projects, he added.
“As you asked initially, I think it’s more about energy in itself, it’s not just PV, because storage is a big part of having the complete solution.”
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