Orsted said it will go ahead with building the pioneering FlagshipONE e-methanol green shipping fuel plant after taking full ownership of a project it claimed represents the same level of risk as its early offshore wind farms.
The Danish renewables giant acquired the 55% of the project it did not already own from original developer Liquid Wind and announced a final investment decision for FlagshipONE, which aims from 2025 to produce 50,000 tonnes a year of e-methanol by combining green hydrogen produced using onshore wind and CO2 captured from a combined heat and power plant.
Orsted did not say how much it would cost to build FlagshipONE or acquire the remaining share, but claimed the project in Örnsköldsvik in Northern Sweden is “Europe’s largest FID’ed green e-methanol facility” and its own first commercial-scale power-to -x project – while taking pains to stress the level of risk it was taking in an e-fuels market that needs more policy support to incentivise uptake.
Orsted claimed green shipping fuels “come at a price premium compared to fossil-based alternatives, and the industry needs supportive regulation to incentivise demand and to drive the maturation of green fuels at scale and at speed.”
Olivia Breese, CEO of Orsted Power-to-X, said: “The final investment decision on FlagshipONE proves our intention to take proactive investment decisions in order to drive the rapid maturation of the power-to-x market beyond ambitions and announcements and into the delivery of molecules to abate well-to-wake emissions. Our first offshore wind projects came with significant risk, but we saw a path to leveraging our capabilities to deliver that technology as a cornerstone in the green transformation.”
Breese went on: “Today, power-to-x is at a similar inflection point, and at Orsted, we’re once again ready to assume risk and lead the maturation of this crucial technology.
Article continues below the advertisement
“However, the power-to-x industry urgently needs supportive frameworks that enable the transition away from fossil fuels, and we call on policy makers to take action to match the climate ambitions of developers and shipping companies.”
Shipping is eventually seen as a key potential market for e-methanol and will be the focus of FlagshipONE. Orsted cited estimates that the maritime industry accounts for 3% of global carbon emissions, and is also involved in the 300,000 tonne Project Star. in the US Gulf Coast region and Green Fuels for Denmark project in Copenhagen.
Work will start in January 2023 at the site in the grounds of the biomass-fired Hörneborgsverket combined heat and power plant in Örnsköldsvik, with excess heat resulting from methanol production being returned to district heating.
Orsted and Liquid Wind earlier said the project would use a 70MW electrolyser for the hydrogen production element.