London — Equinor and RWE are joining the NortH2 project in the Netherlands, formed earlier this year by Shell to produce green hydrogen from offshore wind, the Norwegian oil and gas company and German power utility said Dec. 7.
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NortH2 is one of the largest green hydrogen projects planned anywhere in the world. It targets 1 GW of electrolysis capacity by 2027, ramping up to 4 GW by 2030 and over 10 GW by 2040.
NortH2 was launched in February with Shell, Groningen Seaports, gas grid operator Gasunie and the province of Groningen.
The project will complete a feasibility study by 2021, with the aim to start project development activities in the second half of 2021, Equinor and RWE both said.
The 4 GW target equates to 0.4 million mt/year of green hydrogen production in 2030. With a 1 million mt/yr production target set for 2040, the project could meet a sixth of Europe's current demand for hydrogen.
"NortH2 fits well with Equinor's experience and position as a leading offshore wind operator," Equinor's head of new energy solutions, Pal Eitrheim, said.
Equinor is part of a consortium developing the 3.6 GW Dogger Bank offshore wind complex in UK waters, close to the Dutch maritime zone.
RWE, meanwhile, said it planned to bring in its expertise in green hydrogen and offshore wind projects to the scheme. It is to close its 1.6 GW Eemshaven coal plant by 2030.
In late October, the "Partners in the Investment Plan Hydrogen Northern Netherlands" initiative presented project plans with an investment volume of Eur9 billion ($10.7 billion), including the NortH2 project.
Offshore wind/hydrogen cost projection link
The initiative aims to have hydrogen production offshore by 2030, calling for a major scale-up of Dutch offshore wind targets by 2030 to as much as 6 GW.
The Netherlands currently plans just one northern coast offshore wind auction (700 MW North of the Wadden Islands, to be tendered 2022) with another planned in its 2030 road map.
On Dec. 4, the Dutch government published a report on combined tenders for offshore wind and hydrogen production.
The report by consultants Guidehouse sees investment costs for electrolysis capacity in a range of Eur550-900/kW in 2025 depending on size and location.
Marginal production costs of Eur2.20-2.60/kg green hydrogen in 2025 assumed similar power prices to 2019, versus current conventional hydrogen production costs of Eur1.70/kg (including CO2).
The report also warned of falling capture prices for offshore wind projects despite average baseload electricity prices during the period to 2030 seen rising towards Eur60/MWh, potentially affecting the business case for offshore wind projects due to the so-called 'cannibalization effect'.