Norwegian energy major Equinor and Germany’s biggest power producer, RWE, announced today a strategic energy partnership focused on the development of a low carbon hydrogen value chain, including the development of new hydrogen production facilities, and transport of hydrogen to Germany to replace coal-fired power.
According to the companies, the new agreement aims to contribute to the Germany’s phase-out roadmap for coal. In 2021 Germany’s incoming government set out a clean energy strategy that included speeding up the country’s exit from coal-based power. Last year, the government passed a series of laws approving a major increase in renewable energy development over the next several years, including a target for renewables to meet 80% of electricity demand in the country by 2030.
Equinor CEO and President, Anders Opedal, said:
“Through this collaboration we will strengthen the long-term energy security for Europe’s leading industrial country while at the same time offer a viable route to a necessary energy transition for hard to abate industries. The collaboration has the potential to develop Norway into a key supplier of hydrogen to Germany and Europe.”
Germany’s roadmap envisions phasing out all coal fired power plants by 2030. The new partnership will include the construction of new hydrogen-ready gas-fired power plants, initially powered by natural gas supplied by Equinor. The new power plants, with total expected capacity of 3 GW by 2030, will be jointly owned by Equinor and RWE, and will gradually shift to hydrogen as a fuel as volume and technology become available.
The partnership also includes the construction of facilities in Norway for the production of blue hydrogen, produced from natural gas with carbon capture and storage of 95% of the CO2 emitted, as well as collaboration between the companies on projects to generate green hydrogen, with plans for joint development of offshore wind farms to power the production with renewable energy. Equinor’s investment plans include 2 GW of low carbon hydrogen capacity by 2030, and 10 GW by 2038.
Markus Krebber, CEO of RWE, said:
“In order to make progress in the conversion from fossil fuels to hydrogen, there is an urgent need for a rapid ramp up of the hydrogen economy. Blue hydrogen in large quantities can be the start, with subsequent conversion into green hydrogen supply. This is exactly what we are driving forward with our partnership – providing the industries with significant quantities of hydrogen. In addition, our planned investments into hydrogen-ready gas-fired power plants will ensure security of supply in a decarbonized power sector.”
The hydrogen produced in Norway would be transported through a pipeline to Germany, currently under evaluation by gas transporter Gassco, Equinor and other partners. The investments under the new partnership are contingent on the construction of the pipeline.