Ørsted and HOFOR enters into agreement on green power for ground-breaking hydrogen project

Source: press release, 31 May 2021

Avedøre Power Station, where the power from Aflandshage can be brought onshore
Avedøre Power Station, where the power from Aflandshage can be brought onshore (photo: HOFOR)

Ørsted and HOFOR (Greater Copenhagen Utility) have entered into an agreement that will secure green power for part of the potential 1.3 GW Green Fuels for Denmark project to produce sustainable fuels in the Greater Copenhagen area.

As part of the agreement, Ørsted and HOFOR will work towards enabling Ørsted to offtake the power produced at Aflandshage, which is HOFOR’s 250 MW offshore wind farm project in the Oresund Strait. At the same time, it has been agreed that HOFOR may place the offshore wind farm’s substation at the premises of Avedøre Power Station. Together, Ørsted and HOFOR will seek to realise both technical and trading-related synergies between the two projects. The future cooperation and the concrete design of the link between the wind farm and the PtX plant is subject to all regulatory as well as grid connection matters falling into place.

Provided that a framework is established in Denmark promoting the development of sustainable fuels, the power from Aflandshage could enable parts of Green Fuels for Denmark’s second phase of 250 MW and meet the power demand for the project’s first phase.

In addition to Green Fuels for Denmark, the agreement on Aflandshage could potentially also cover the power demand of the electrolysis plant that will supply hydrogen to DFDS’s proposed hydrogen-powered ferry between Copenhagen and Oslo, if this project is realised.

Aflandshage is being developed, and subject to regulatory approvals, HOFOR expects the project to deliver first power in 2024/2025. The power can be brought onshore at Avedøre Power Station, which is owned by Ørsted, and where Green Fuels for Denmark could be located.

Anders Nordstrøm, Head of Ørsted’s hydrogen activities, says, “The European ambitions for renewable hydrogen and sustainable fuels have increased dramatically over the past year, mainly outside of Denmark, but as a country, we can still play a significant role in this part of the global green transformation. Green Fuels for Denmark is a large-scale flagship project ideally suited to realising Denmark’s great potential as a producer of sustainable fuels for heavy transport. The agreement with HOFOR underlines the partnership’s firm belief that Green Fuels for Denmark can contribute significantly to reducing greenhouse gas emissions and create a new industrial stronghold for Denmark.”

Jan Kauffmann, CFO of HOFOR, agrees. He emphasises that the determining factors for HOFOR have been the broad collaboration on the green energy of the future and the visionary coupling of sectors, saying, “If we’re to succeed with the green transformation of our combined energy supply, it’s important that major Danish players work together on shared solutions. Not least when it makes a lot of sense for both parties. That’s why we also see great potential in this long-term agreement.”

Kauffmann continues, “In my view, the next step will be to investigate how the excess heat generated by Power-to-X production can be incorporated into the heating system in the Greater Copenhagen area. At HOFOR, we see a strong possibility for creating a stable supply of district heating at a competitive price. Our district heating system needs this, and at the same time, we enter into a cooperation with the largest possible impact on our climate targets.”

The production of renewable hydrogen and sustainable fuels has enormous potential and can reduce carbon emissions from the heavy transport sector significantly. Sustainable fuels are more expensive to produce than fossil-based fuels. To reduce the price, the production of sustainable fuels must be matured and build-out at industrial scale, and the costs must be reduced – just as we have seen with renewable energy technologies, such as offshore wind, onshore wind, and solar PV over the past decade. For this to be feasible, the industry must join forces with governments to create a framework that provides incentives for private investments in large-scale sustainable fuel production.