Hydrogen and e-fuels co-op established in Denmark

Copenhagen Airports, Maersk, DSV Panalpina, DFDS, SAS, and Ørsted have partnered to develop an industrial-scaled hydrogen and e-fuel production facility in the Greater Copenhagen Area.

Should the parties give the investment a final green light after conducting a feasibility study, most likely in 2021, the plant will be erected in three stages.

First, a 10 MW electrolyser will be put into operation by 2023, producing hydrogen than can be used by busses and trucks as fuel.

Second, the electrolyser will be scaled up to 250 MW by 2027, powered by electricity coming from the Rønne Banke offshore wind farm. Besides producing hydrogen, the facility will also capture carbon from point-sources to produce methanol, to be used as bunker, and jet-fuel (e-kerosene).

Third, the electrolyser will be upgraded to 1.3 GW as a result of the Rønne Banke coming fully online. Ultimately, a total of up to 250kt/year of sustainable fuels is planned to be produced at the plant.

"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. As an example, the cost of offshore wind has declined by approx 70% in Northwest Europe since 2012. For this to happen, governments and industry must come together to create a framework that incentivises private investments in large-scale sustainable fuel production," the parties underlined in a press release.

The partnership will now engage in dialogue with the regulatory authorities on the framework and policies needed to support the development of using sustainable fuels at scale in the transport sector in Denmark, and to seek public co-funding to conduct a full feasibility study. If the analysis confirms the viability of the project vision, a final investment decision for the first stage of the project could likely be taken next year.

"This project gives Denmark a unique opportunity to spearhead the green transition in the transportation sector: We get to utilise Danish strongholds in, e.g., wind energy, and join forces in the electricity, district heating and transportation sectors. Cooperating across sectors and fostering partnerships among cities, companies and universities is exactly how we create real value and new sustainable solutions," Lars-Peter Søbye, CEO, COWI (a consultancy that alongside BCG will act as knowledge partner for the project), said.