Denmark-headed renewable energy utility major Ørsted A/S has announced that the Danish Energy Agency (DEA) has awarded Ørsted a 20-year contract for its carbon capture and storage (CCS) project ‘Ørsted Kalundborg Hub’. The project entails that Ørsted will establish carbon capture at its woodchip-fired Asnæs Power Station in Kalundborg in Western Zealand and at the Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area.
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The Danish Energy Agency (DEA) has awarded Ørsted A/S a 20-year contract for its carbon capture and storage (CCS) project ‘Ørsted Kalundborg Hub’.
The project entails that Ørsted will establish carbon capture at its woodchip-fired Asnæs Power Station in Kalundborg in Western Zealand and at the Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area.
During 2025, the Asnæs and Avedøre combined heat and power (CHP) plants will begin to capture and store biogenic carbon dioxide (CO2), and at the beginning of 2026, the two units will capture and store approximately 430 000 tonnes of biogenic CO2 every year.
We’re incredibly pleased with the outcome of the tender process, and we look forward to initiating the work of establishing a carbon capture facility at two of our combined heat and power plants running on sustainable straw and wood chips. According to the UN’s Intergovernmental Panel on Climate Change (IPCC), capture and storage of biogenic CO2 is one of the tools we must use to fight climate change, and our CCS project will contribute significantly to realizing the politically decided Danish climate targets for 2025 and 2030, said Ole Thomsen, SVP and Head of Ørsted’s Bioenergy business.
Developing large-scale CO2 infrastructure
The realization of the project will be the first step in establishing a large-scale CO2 infrastructure across Denmark as the Asnæs Power Station will not only serve as the hub for the capture and shipping of Ørsted’s own biogenic CO2 but potentially also for shipping CO2 produced by other emitters.
Ørsted has teamed up with Aker Carbon Capture, the Norwegian frontrunner in carbon capture technology and developer of a field-proven and proprietary carbon capture technology.
As a carbon capture technology provider, Aker Carbon Capture will deliver five of its “Just Catch” units to the CHP plants.
The Just Catch standardized concept is a modular and configurable offering, which enables efficient production and deployment of carbon capture units.
We’re proud of our partnership with Ørsted and see this project as a milestone for our standardized Just Catch offering to the mid-scale emitter market. We look forward to working with Ørsted and to contributing to their decarbonization journey and to Denmark’s CCUS ambitions, said Valborg Lundegaard, CEO at Aker Carbon Capture.
Landmark CDR deal
By capturing the biogenic carbon from biomass-fired CHP plants and storing it underground, it is possible to not only reduce but also remove CO2 from the atmosphere as biogenic carbon from sustainable biomass is part of a natural biogenic carbon cycle. Thereby, creating negative emissions.
In March 2021, Ørsted, Aker Carbon Capture, and Microsoft signed an agreement to, among other things, drive forward the process of reaching the actual operation of a commercial and technical setup that combines carbon capture and clean energy production via biomass-fired CHP plants.
In direct support of this new project, Microsoft has agreed to purchase 2.76 million tonnes of high-quality, durable carbon removal over 11 years from the capture and storage of biogenic carbon from the Asnæs Power Station.
This represents one of the world’s largest carbon dioxide removal (CDR) offtake agreements by volume, to date.
Our landmark long-term agreement with Ørsted for high-quality carbon removal supports Microsoft’s commitment to becoming carbon-negative by 2030, sends a strong demand signal to scale the market, and showcases the power of partnership and the technological innovation needed to help the world make the clean energy transition, said Melanie Nakagawa, Chief Sustainability Officer at Microsoft.
A public-private partnership with policy alignment
The agreement between Ørsted and Microsoft also demonstrates the commercial value associated with carbon capture and removal.
Given the nascent state of bioenergy-based CCS, Danish state subsidies and Microsoft’s contract were both necessary to make this project viable.
According to Ørsted, this partnership demonstrates how decarbonized solutions can mature and scale when off-takers, operators, technology providers, and policymakers collaborate closely.
By creating a commercial setup of negative emissions that provides transparency and lowers the cost and time to market for carbon offsets, CCS can move from relying on subsidies to operating on market terms.
This is similar to the development of other renewable energy solutions, such as solar PV and wind energy.
Utilizing surplus heat
The carbon capture process will be heat-integrated with the CHP plants, enabling district heating to be supplied both in Kalundborg and the Greater Copenhagen area.
The carbon capture process at Avedøre Power Station’s straw-fired boiler has the potential to regenerate approximately 35 MW of surplus heat, and the carbon capture process at Asnæs Power Station has the potential to regenerate approximately 50 MW of surplus heat, corresponding to the annual district heating consumption of approximately 11 000 and 20 000 average Danish households, respectively.
The tender procedure is fully completed when the contract has been signed by Ørsted and the DEA.
Signing is expected to take place shortly after the expiry of the mandatory standstill period.
Ørsted expects to begin the construction of carbon capture units at Asnæs and Avedøre CHP stations in June 2023.
