Denmark's CIP proposes 1 GW electrolyzer for green ammonia production at Esbjerg

Copenhagen Infrastructure Partners has announced plans for what would be Europe's largest green ammonia production facility with a 1 GW electrolyzer at Esbjerg, the Danish fund said Feb. 23.

The Power-to-X facility will convert offshore wind power to ammonia used as fertilizer or as CO2-free fuel in the shipping industry, it said.

Excess heat from the electrolyzer plant will be used to provide heat for one third of households in Esbjerg, it added.

CIP signed a memorandum of understanding with leading Danish agriculture and shipping companies to develop the project.

Project companies include Arla, Danish Crown and DLG, some of Europe's biggest dairy and pork producers, as well as shipping companies Maersk and DFDS.

CIP also launched a new Energy Transition Fund for new and existing investors.

Next generation renewable energy infrastructure assets have become attractive as industrial scale investment opportunities, CIP said.

"More than 10 years ago, we were a first mover into renewable infrastructure investments including offshore wind. We are excited about the opportunity to continue investing with CIP at the forefront of the energy market developments," PensionDanmark CEO Torben Moger Pedersen said.

The Esbjerg project is planned to replace all imported fertilizers in Denmark, it added.

Hydrogen combined with nitrogen using the Haber-Bosch process forms ammonia, which when burned turns back into nitrogen and water with no CO2 emissions.

Ammonia production contributes to roughly 1.4% of global CO2 emissions, while shipping contributes around 2% globally.

For the shipping industry, there was a "very real sense of urgency in curbing emissions," container ship operator Maersk and ferry operator DFDS said in the statement.

Maersk plans to have its first carbon neutral vessel on the water by 2023, while DFDS is working on a hydrogen-fueled ferry by 2030.

Esbjerg mayor Jesper Frost Rasmussen said it was only natural, that this facility is placed in Esbjerg describing his town as the center of Europe's shipping of wind turbines over the past ten years.

"Our target is that Esbjerg is CO2-neutral in 2030," the mayor said.

Denmark's government plans a further expansion of offshore wind - currently tendering for the 1 GW Thor project just north of Esbjerg.

Denmark also decided to build an artificial island offshore the coast of Jytland with 3 GW wind by 2030.

Last year, CIP proposed a similar project in the Copenhagen area starting with a 10 MW electrolyzer 2023, rising to 250 MW by 2027 focusing more on road and air transport operators.

Giga-scale green hydrogen proposals have mushroomed in early 2021 with ammonia/fertilizer as well as steel making with little alternatives to decarbonize key areas of focus.

Sweden's H2 Green Steel on Feb. 23 proposed a green steel plant powered by a 800 MW electrolyzer near Lulea in northern Sweden. The estimated Eur2.5 billion project secured Eur50 million in a first phase of financing with a number of Swedish investors including Northvolt and Spotify founders.

Construction at a greenfield site could start 2022 pending a second round of financing in Q4 2021.

Last week, Statkraft and Norwegian fertilizer maker Yara signed an MoU to develop a 450 MW electrolyzer for green ammonia at Heroya on Norway's southeast coast.

S&P Global Platts offers a range of hydrogen pathway assessments.

The price of green hydrogen (Netherlands, alkaline electrolysis including capex) was assessed at Eur3.53/kg on Feb. 18 compared to Eur1.54/kg for so-called gray hydrogen (SMR without CCS including carbon and capex).

SCALING UP ELECTROLYZERS (selected project updates Q1 2021)

Source: S&P Global Platts, developers