Ørsted and Skovgaard Energy join forces to develop large-scale Power-to-X facility in western Denmark

Source: press release, 6 December 2022

Ørsted and Skovgaard Energy to jointly develop a Power-to-X facility in Denmark
Ørsted and Skovgaard Energy to jointly develop a Power-to-X facility in Denmark (illustration: Ørsted)

Ørsted and Skovgaard Energy, a Danish renewable energy developer, have signed a letter of intent to jointly develop a Power-to-X facility in Denmark with one of the country’s most attractive locations. The 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 Power-to-X project and the associated onshore wind and solar PV, which can enable a fast development of the project, if the regulatory work goes according to plan.

The Power-to-X 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 Power-to-X projects, where learnings can be applied from project to project in the expected rapid scale-up of the technology.

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 Power-to-X towards 2030, and Denmark, with its strong offshore wind resources, is well-positioned to play a leading role in the development of this industry.

Anders Nordstrøm, Chief Operating Officer of Ørsted P2X, says, “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 a green energy exporter 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 Power-to-X.”

Niels Erik Madsen, CEO of Skovgaard Energy, says, “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.”

Ørsted and Skovgaard Energy are both deeply involved in the development of Power-to-X. Skovgaard Energy and partners are building Denmark’s first dynamic Power-to-X 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” is also located.