Danish companies plan 1.3-GW green hydrogen project to fuel transport

Leading Danish companies said Tuesday they have formed a green hydrogen partnership to develop an industrial-scale electrolysis-based production facility to produce sustainable fuels for road, maritime and air transport in the Copenhagen area.

The companies are: Orsted, A P Moller-Maersk, DSV Panalpina, DFDS, SAS and Copenhagen Airports.

The plan comes a day before the European Commission is to unveil proposals for a green recovery program focused on renewables and sustainable production of hydrogen.

In a first phase, a 10-MW electrolyzer would be online by 2023, rising to 250 MW by 2027, the companies said in a statement.

When fully scaled-up to 1.3 GW by 2030, the project could deliver over 250,000 mt a year of renewable hydrogen for buses, trucks, maritime vessels and airplanes.

The project could reduce annual carbon emissions by 850,000 mt, the group said.

The project is to be located in the Greater Copenhagen Area to supply renewable hydrogen for Copenhagen city buses, heavy-duty trucks managed by DSV Panalpina, renewable methanol for A P Moller-Maersk vessels and renewable jet fuel (e-kerosene) for SAS airplanes and air transport out of Copenhagen, the companies said.

The project required large-scale supply of renewable electricity, potentially from offshore wind produced at Ronne Banke off the island of Bornholm.

Last week, Denmark announced plans for two, 2-GW energy islands to help cut 2 million mt of CO2 by 2030 as the new coalition government targets a 70% cut in CO2 emissions (over 1990) by 2030.

The plans include new offshore wind parks near Bornholm with the island to be linked by a cable to Poland and Sealand (Copenhagen).

Green hydrogen growth, cost trajectories

"To become competitive with fossil fuels, the production of sustainable fuels will need to be matured, built at industrial scale, and go through a cost-out journey similar to what has been seen over the past decade in other renewable energy technologies, such as offshore wind, onshore wind and solar PV," the statement said, referring to a 70% fall in offshore wind costs in Europe since 2012.

The project had the potential to displace 5% of fossil fuels at Copenhagen Airport by 2027 and 30% by 2030, it said.

"Green hydrogen is potentially one of the largest growth/investment areas for utilities in the coming years. In particular the powering of large/heavy transport by this form of renewable energy is seen as key to reducing emissions given the difficulty of scaling up battery technology from consumer scale EVs," utility analysts at RBC said in a note Tuesday.

"With the right policy framework in place, this project could be a defining leap forward for the production of sustainable fuels in Denmark, which will further reinforce Denmark's role as a global leader in technologies and business models for a sustainable future," utility Orsted CEO Henrik Poulsen said.

"In Copenhagen, we've set the ambitious goal to become the world's first carbon neutral capital by 2025," Mayor of Copenhagen Frank Jensen said.

The CEO of ferry operator DFDS Torben Carlsen said the project could "help us reach our goal of operating zero-emission ferries and trucks much faster than we had originally anticipated."

Soren Skou, CEO of container ship operator Maersk, said "many such projects both in Denmark and around the globe [were needed] to achieve our ambition in Maersk of becoming carbon neutral by 2050."

On Monday, Orsted alongside Danish wind turbine makers Vestas and MHI Vestas joined EDP, Enel, Iberdrola, BayWa and Akuo Energy as well as WindEurope and SolarPowerEurope in the "Choose Renewable Hydrogen" initiative to advance green hydrogen on a European level.

The production of sustainable hydrogen could need up to Eur30 billion ($33 billion) in support up to 2030, with Contracts for Difference mechanisms favored by the European Commission in a draft green recovery document seen last week.