Offshore wind giant Ørsted and colossal fossil BP have sealed a deal to build a 50-megawatt electrolyzer in northern Germany, in what the two companies see as a first step in a broader partnership to produce green hydrogen.
The initial deal is expected to produce 9,000 tons of hydrogen using power from an Ørsted offshore wind farm, enough to displace about 20% of the fossil-derived hydrogen from a BP refinery in Lingen, where the two companies made their announcement last week.
“The project is BP’s first full-scale commercial hydrogen venture,” Greentech Media reports, and an initial step in BP’s effort to grab 10% of the “clean hydrogen” market by 2030. The companies will make a final investment decision in 2022, and expect the plant to go into operation by 2024.
“BP uses ‘clean’ (rather than ‘green’) to describe its hydrogen initiatives,” Greentech explains. “That term incorporates hydrogen produced from natural gas with carbon capture technology in place, which is termed ‘blue’ hydrogen.” But “no such carbon capture technology is in use for hydrogen production at scale today,” the U.S.-based industry publication adds.
“Bringing together Ørsted and BP, Lingen Green Hydrogen offers the opportunity both to accelerate significant emissions reduction in our refinery and build experience with large-scale green hydrogen production and deployment,” said Dev Sanyal, BP’s executive vice president for gas and low carbon, in a November 10 statement. “This has the potential to play an important role in the development of a hydrogen economy, in Germany and beyond.”
However, “Ørsted has tempered expectations for its hydrogen project announcements by highlighting that it requires public funding in order for the investments to make sense,” Greentech adds. “In August, outgoing Ørsted CEO Henrik Poulsen told investors hydrogen was a decade away from making a mark on the company’s bottom line.”
The two partners have applied for financial support from the EU Innovation Fund, a 10-year, €10-billion initiative to support “highly innovative” and “big flagship” projects in energy storage, carbon capture, and technology to decarbonize industry.
Greentech has more on the development of hydrogen projects in Germany.