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RWE and Equinor agree to develop large-scale value chains for low carbon hydrogen

06 January 2023

Equinor and RWE signed a Memorandum of Understanding (MoU) on January 5 to jointly develop large-scale energy value chains. 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.

The agreement includes large scale projects that will contribute to the European energy supply as well as to the ramp-up of the hydrogen economy in Germany and the EU. In addition, the partnership will strengthen the long-term security of supply of a decarbonised European power sector, the companies said in a statement.

The investments are contingent on the construction of a hydrogen pipeline between Norway and Germany and a German hydrogen downstream infrastructure. In anticipation of this infrastructure, Equinor and RWE propose a series of investments that they think would be major building blocks for European hydrogen supply and its use in the power sector from 2030 onwards.

As part of the agreement, Equinor has the ambition to invest in clean hydrogen to Europe projects with an initial 2 gigawatt (GW) of low-carbon (blue) hydrogen production capacity in Norway by 2030 and up to 10 gigawatts by 2038. These facilities are to feed into a pipeline to Germany, which is currently being assessed by Gassco, Equinor and third parties. Provided this pipeline is in place, Equinor will transport the blue hydrogen, which RWE will purchase and use in hydrogen-ready gas plants. 

In addition to this, RWE and Equinor will collaborate in projects aimed at generating green hydrogen. Offshore wind energy is by far the most effective form of renewable power generation. Combined with electrolysers it will play an important role for the ramp-up of the hydrogen economy. In this context RWE and Equinor are planning to jointly explore possibilities for offshore production of renewable hydrogen in Norway, Germany and countries adjacent to the proposed hydrogen pipeline. Both companies are already engaged in developing AquaSector – a project in the North Sea aimed at creating a 300 MW offshore wind farm connected to offshore electrolysers that produce green hydrogen.

RWE and Equinor also plan to jointly invest in flexible hydrogen-ready gas-fired power plants (CCGT) in Germany with a total capacity of 3 gigawatts by 2030. Hydrogen-ready gas-fired power plants are based on technology that is available at scale to balance the fluctuating electricity generated from renewables and electricity demand. 

In accordance with specifications from the German Federal Ministry of Economic Affairs and Climate Protection, the CCGT plants shall be able to reach 50%vol hydrogen combustion at the time of commissioning. The companies will pursue a roadmap to reach 100% hydrogen combustion capability by the mid-2030. The RWE-Equinor partnership is to secure the fuel supply for their planned CCGT fleet in line with this decarbonisation schedule: For this, Equinor initially plans to supply the natural gas required for the operation of the joint CCGT plants. In order to accomplish the CCGT’s transition towards 100% hydrogen firing, natural gas will in a first step be replaced by low-carbon hydrogen. As offshore hydrogen production plants get connected over time, green hydrogen will gradually complement and ultimately replace its blue counterpart in imports to Germany. Green hydrogen from RWE’s and Equinor’s joint projects will fire the joint CCGT fleet to complete its decarbonisation journey.

In addition, RWE and Equinor will continue to explore joint investments in offshore-wind-only projects in Norway and Germany as well as green hydrogen production in Norway. 

“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,” said 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 decarbonized power sector,” said Dr. Markus Krebber, CEO of RWE.

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