Meeting the new energy reality by de-risking first-of-a-kind projects

The global energy transition is facing a critical challenge, balancing energy security, affordability and sustainability. In a world shaped by multiple overlapping crises, the question we must ask ourselves is: How do we de-risk first-of-a-kind projects to accelerate progress?

Breaking the investment stalemate

$6,7 trillion per year is needed between 2024 and 2030 to remain on a 1.5°C pathway, according to the International Renewable Energy Agency (IRENA). This includes almost one trillion in investments for clean fuels, such as e-fuels and low-carbon fuels.

Commitments and significant progress have already been made to innovate, deploy and scale the advanced technologies needed to produce these fuels. For example, the Hydrogen Council reports that $75 billion has already been committed to hydrogen projects.

However, because of geopolitical uncertainty, high interest rates and inflation, securing sufficient capital for first-of-a-kind (FOAK) projects remains a challenge. These pressures make it difficult for projects to reach final investment decisions (FID), delaying front-runner initiatives and creating setbacks across the value chain. As a result, a persistent gap remains between ambition and outcomes hindering progress toward global energy transition targets.

Overcoming risks of scaling new technologies

First-of-a-kind projects come with both risks, but also massive opportunities. Based on today’s policy settings, the global market for clean energy technologies is set to rise from $700 billion in 2023 to more than $2 trillion by 2035 – close to the value of the world’s crude oil market in recent years (IEA). In addition, first-movers gain valuable insights – financial, operational and market-based – giving them a competitive edge as the market matures.

But getting those first projects over the finish line is essential to making the business case for further investments and scaling. Without a proven business case and early commercial success, new technologies won’t be deployed quickly enough, preventing manufacturers from accumulating the operating hours needed to provide industry-standard performance guarantees and economies of scale. This slows adoption, inflates costs and deters further investment.

The Power-to-X industry illustrates this challenge, where producers, investors and off-takers must take a long-term view, balancing upfront risk with future market opportunities. Establishing a track record of successful deployments will reduce perceived risks, lower costs and pave the way for a scalable clean energy market.

What it takes to get first-of-a-kind projects over the finish line

De-risking energy transition projects and turning first-of-a-kind projects into bankable, scalable projects, requires several key drivers:

1. Bridging the financing gap with policy support

Access to capital remains a major bottleneck, particularly for early-stage clean energy projects. While energy transition finance has reached new heights, it still falls far short of what’s needed. As of 2023, the capital committed was between a tenth and a fifth of the projected annual needs, according to World Economic Forum’s Global Cooperation Barometer 2025.

Government programs and incentives can help reduce risk and bridge financial gaps. Incentives and mandates – like those used in the solar industry – can drive cost reductions and scalability. A good example is the EU’s Renewable Energy Directive (RED ll and lll), which sets a binding renewable energy target of at least 42.5% at the EU level by 2030 and requires the use of renewable fuels in industry and transportation, ultimately creating a demand-pull effect.

2. Regulatory certainty for long-term market viability

Policy frameworks provide predictability for developers and investors, helping to mitigate risks. To get first-of-a-kind projects off the ground, clean energy tax credits in the United States and the EU’s Net-Zero Industry Act and Critical Raw Materials Act must be maintained. These frameworks successfully align industrial and energy policies and support long-term viability.

Another example is the UK’s Contract for Difference (CfD) model, which provided revenue certainty for early offshore wind projects, helping the sector scale. Hydrogen and Power-to-X developers could benefit from similar mechanisms to improve project bankability.

3. Standardization and risk mitigation through technology

New clean energy technologies often carry inherent risks due to a lack of operational track record and high costs. Pilot projects help validate new solutions, boosting investor confidence. For example, Topsoe’s pilot facility in Frederikssund, supported by EUIF, demonstrated the excellent performance of SOEC technology, reinforcing its scalability potential.

Additionally, modular and standardized designs reduce complexity, making clean energy projects easier to scale and finance. At Topsoe, we have standardized designs wherever possible, optimizing components and plant capacities. This shift enables faster deployment, lower capital costs, and improved serviceability.

Topsoe’s role in de-risking the energy transition

Unlocking capital for clean energy projects requires more than just technology – it requires trust and de-risking solutions. Demonstrated below are three examples of how we have helped make clean energy projects viable, scalable and impactful:

• Scaling SOEC technology with strategic funding

Our first SOEC manufacturing facility in Denmark was supported by a EUR 94 million grant from the EU Innovation Fund, de-risking one of the largest electrolyzer projects to date​.

• A world’s first through partnerships

We actively collaborate with industrial partners, research institutions and policymakers to drive standardization, regulatory clarity and financial viability for clean energy solutions. An example is the green ammonia plant, which we inaugurated alongside Skovgaard Energy and Vestas in Ramme, Denmark.

• Bringing down production costs

Lowering production costs is essential to attract off-takers and advance projects. At Topsoe, we improve efficiency through technologies like SOEC, which enable better utilization of intermittent renewable power. When coupled with heat-producing technologies, it allows for the lowest levelized hydrogen cost through the highest level of energy efficiency at megawatt or gigawatt volume – and thereby increasing economic viability.

 Looking ahead

As the world confronts the complexities of the energy transition, the path forward demands innovation, unwavering collaboration and scalable solutions. At Topsoe, we are committed to driving this transformation – delivering proven technologies that enable industries to transition toward net-zero while fueling innovation, economic prosperity, and energy security along the way.

Discover other articles in our four-part New Energy Reality Series. Access the series here.