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Ørsted aims to decarbonize biomass CHP plants with CCS hubs

17 June 2022 Cristina Brooks

Danish utility and wind power developer Ørsted aims to capture carbon emissions at two biomass power plants, part of a wider plan to launch carbon capture hubs for multiple different facilities in and around Copenhagen on the Danish island of Zealand.

Ørsted told Net-Zero Business Daily by S&P Global Commodity Insights about the project, which will be competing for carbon capture, transportation, and storage subsidies via a Danish government tender.

The hubs would capture emissions from biomass-fired combined heat and power (CHP) plants in Denmark, as well as using the captured carbon in fuel production to help meet the country's sustainable aviation goals.

Reducing emissions from Ørsted's biomass-fired CHP plants is part of the company's long-term vision for carbon capture and storage (CCS). "Our carbon capture plans are based on our newest CHP plants which will be in operation for many years to come, and which run on sustainable straw and wood chips. For now, we're looking at Asnæs power station and the straw-fired unit at Avedøre power station," said Senior Manager of Group Communication Carsten Birkeland Kjær.

Ørsted is working toward its April 2023 goal of phasing out all of its coal power plants. Denmark's national pledge is to phase out coal generation by 2028.

At the Avedøre plant in Copenhagen, Ørsted converted the feedstock from coal and natural gas to biomass in 2016.

The proposed CCS hub will include two facilities in the city of Kalundborg. These are the Asnæs CHP plant, and the Klesch Group-owned refinery in the city, the largest in Denmark.

The captured emissions from the Kalundborg projects will be stored by a CCS operator which Ørsted has yet to formally sign contracts with. "There are different storage operators in both Denmark and Norway, and we are pursuing an operator which could be ready from 2025. We are in dialogue and expect to have a final agreement in place later this year," said Kjær.

He added that Ørsted's choice of storage operator for the first phase of the project would not exclude other operators storing carbon in the next phases.

Captured carbon for green fuel

Denmark's government is aiming for fossil fuel-free domestic aviation by 2030. In January, it pledged to require "green" options for all domestic aviation routes by 2025.

In 2020, Danish lawmakers allocated the equivalent of DKK 800 million ($112.57 million) in subsidies annually to carbon capture and storage projects via a pledge, the Danish Climate Agreement for Energy and Industry.

Ørsted plans to use some captured carbon from the boilers at Avedøre as feedstock for its planned shipping and aviation fuel production project, Green Fuels for Denmark.

The project would provide electrolysis-based fuels, which are created using hydrogen and ammonia produced through a process called Power-to-X (PtX). It would mainly supply e-methanol for the shipping industry.

Capturing carbon for use in producing electrolysis-based fuel is another key aim of the proposed CCS project. "We see considerable opportunities in utilizing the biogenic carbon from our CHP plants in PtX. However, we see CCS as a flexible option to store biogenic carbon and deliver negative emissions while building PtX opportunities," Kjær said.

Net-zero targets

Two years ago, Ørsted set a target to reach net-zero emissions by 2040, and it is currently in the process of gradually phasing out its natural gas trading.

It was previously known as DONG or Danish Oil and Natural Gas before divesting its oil and gas business in 2017.

Last year Ørsted improved on its net-zero goal, by expanding the target to include Scope 3 emissions. It also said it would be one of the first seven companies with targets that are independently verified by the Net-Zero Corporate Standard.

The expanded target includes a 99% reduction of GHG emissions on Scopes 1-3 for its energy portfolio and a 99.8% reduction in GHG emissions from energy generation in Scopes 1-2.

This is an improvement on its prior target of a 98% reduction in carbon intensity by 2025 below 2006 levels, although the company had already reduced its carbon emissions by 86%, including through the 2017 divestment of DONG assets.

Denmark's continued use of biomass

In Denmark, biomass is used for fuel in district heating and biogas in gas networks, but hydrogen could supplant it if the latter becomes more widely available, according to the Danish UK Embassy.

But Denmark's government in 2020 voiced concerns over the use of forests for biomass sourcing, and last year a proposed revision to the EU's Renewable Energy Directive would also place new limits on wood as a source of renewable energy.

Ørsted said the Danish government knows sustainable biomass supplies—in combination with heat pumps, electric boilers, and hydrogen— will continue to be needed to maintain heat and power reliability.

"Therefore, it is necessary to maintain a supply chain of sustainable wood chips and straw," Ørsted said in the statement on the biomass CHP carbon capture plans.

Denmark's grid operator, Energinet, has said that biogas could go from meeting 25% of Danish gas demand in 2021 to meeting 100% of gas demand by 2034, including in gas grids.

Posted 17 June 2022 by Cristina Brooks, Senior Journalist, Climate and Sustainability



This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.

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