Renewable energy major Ørsted A/S and compatriot Skovgaard Energy ApS, a Danish renewable energy developer, have signed a Letter of Intent (LoI) to jointly develop a Power-to-X (PtX) facility in Denmark with one of the country’s most attractive locations.
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According to a statement, the proposed facility will be built in several phases, and it can thus play a central role in the start-up of the Danish Power-to-X industry as well as in the establishment of large-scale exports of renewable hydrogen for the green transformation of Europe.
The first phase of the project will have an expected electrolysis capacity of 150 MW and will be powered by onshore wind and solar PV.
Skovgaard Energy has already commenced the development of both the PtX project and the associated onshore wind and solar PV, which can enable fast development of the project if the regulatory work goes according to plan.
The PtX facility will be located in Idomlund near Holstebro in the western part of Denmark, which is an optimal strategic location enabling significant scaling of the project.
Idomlund is expected to be the landfall for parts of the huge offshore wind build-out in the North Sea, which enables easy access to very large renewable energy resources.
The EU countries around the North Sea have set combined offshore wind targets of 65 GW by 2030 and at least 150 GW by 2050.
The project’s proximity to large-scale offshore wind, in which Ørsted is the world leader, will allow Ørsted and Skovgaard Energy to leverage their respective generation portfolios to create additional value.
Furthermore, the scalable nature of the project fits well with Ørsted’s phased approach to constructing PtX projects, where learnings can be applied from project to project in the expected rapid scale-up of the technology.
Denmark well positioned
If the necessary offshore wind capacity and hydrogen infrastructure in and out of Denmark are established, the facility’s electrolysis capacity will be able to increase to more than 3 GW, and the hydrogen can be exported on a large scale and contribute to the green transformation throughout Europe.
This will contribute significantly to Denmark’s target of 4-6 GW of electrolysis capacity by 2030 and could make the facility one of the largest in Europe.
The European Commission expects that tens of billions of euros will be invested in PtX towards 2030, and Denmark, with its strong offshore wind resources, is well-positioned to play a leading role in the development of this industry.
Europe needs green solutions at scale to fight climate change and to secure regional energy independence. Few countries have as strong a potential to become green energy exporters as Denmark due to its abundant and low-cost offshore wind resources, which are supplemented by onshore wind and solar PV. By partnering with Skovgaard Energy on the Idomlund project, Ørsted is entering one of the most strategically advantageous projects to leverage the strong fit between large-scale renewable energy and PtX, said Anders Nordstrøm, Chief Operating Officer of Ørsted P2X,
Ørsted and Skovgaard Energy are both deeply involved in the development of PtX.
Skovgaard Energy and partners are building Denmark’s first dynamic PtX plant for the production of green ammonia, while Ørsted has constructed the renewable hydrogen project ‘H2RES’ at Avedøre Power Station in Copenhagen, where the flagship project ‘Green Fuels for Denmark’ (GFDK) is also located.
It’s a historically good day for the economic development of western Denmark. With this collaboration with Ørsted, we’re shifting gears and accelerating the local, national, and international green transition. We’re proud of the collaboration and of contributing to this development, said Niels Erik Madsen, CEO of Skovgaard Energy.