Equinor and RWE to cooperate on energy security and decarbonisation
Equinor and RWE have agreed to work together to develop large-scale value chains for low carbon hydrogen. The partners aim to replace coal fired power plants with hydrogen-ready gas fired power plants in Germany, and to build production of low carbon and renewable hydrogen in Norway that will be exported through pipeline to Germany.
On 5 January, the two companies signed a memorandum of understanding (MoU) to jointly develop large-scale energy value chains, building on the partnership between Norway and Germany and the long-term relationship between Equinor and RWE. The cooperation has these main building blocks:
- Construction of new gas power plants (CCGTs), contributing to Germany’s phase-out roadmap for coal. Equinor and RWE will jointly own the CCGTs which initially will be fueled with natural gas and then gradually use hydrogen as fuel with the ambition of fully to be run on hydrogen when volumes and technology are available.
- Building production facilities in Norway to produce low carbon hydrogen from natural gas with CCS. More than 95% of the CO2 will be captured and stored safely and permanently under the seabed offshore Norway.
- Export of hydrogen by pipeline from Norway to Germany.
- Joint development of offshore wind farms that will enable production of renewable hydrogen as fuel for power and other industrial customers in the future.
“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. This is a unique opportunity to build a hydrogen industry in Norway where hydrogen also can be used as feedstock to domestic industries”, says Anders Opedal, Equinor’s CEO and President. “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 make a start, with subsequent conversion into green hydrogen supply. This is exactly what we are driving forward with our partnership – providing the industries with relevant quantities of hydrogen. In addition our planned investments into hydrogen-ready gas-fired power plant will ensure security of supply in a decarbonised power sector,” adds Dr. Markus Krebber, CEO of RWE.
Germany has an ambition to phase out all coal fired power plants by 2030. Several projects for building new hydrogen-ready power plants in Germany have been identified, replacing existing power production from coal. Until large-scale hydrogen production is developed, the power plants will be fueled by natural gas from Equinor. Replacing coal is the first carbon-reduction step, reducing CO2 emissions materially. Norway is the largest supplier of natural gas to Europe and Norwegian gas comes with the lowest carbon footprint compared to other gas supply. The next decarbonisation step is to replace natural gas with low carbon hydrogen, produced in Norway and delivered via a hydrogen pipeline to Germany. Over time, large-scale renewable hydrogen production from offshore wind projects in Germany and Norway will complement and replace low carbon hydrogen.
Industrial scale and reliable supply of hydrogen to Germany and the EU, depends on the construction of a hydrogen pipeline from Norway to Germany. This is currently under evaluation by Gassco and partners in the context of the German-Norwegian feasibility study. The pipeline would initially transport low carbon hydrogen, produced by capturing more than 95 % of the CO2 from natural gas, using existing and proven technologies. In parallel, Equinor and RWE will collaborate to develop renewable hydrogen production from future large-scale offshore wind projects in Germany and Norway. As renewable hydrogen production increases, this would complement and eventually replace low carbon hydrogen in the pipeline, leading to delivery of fully decarbonised baseload fuel and feedstock, supplying industries and supporting intermittent power generation from renewables.
Both RWE and Equinor aim to take leading positions in the energy transition. To achieve a fully decarbonised energy system, the parties depend on the collaboration with governments, local authorities, regulators, communities, industry partners, suppliers, and others. For the infrastructure and projects under the Memorandum of Understanding to become commercially viable, appropriate regulatory support mechanisms will be required.