Equinor and RWE to build hydrogen supply chain for German power plants

Oslo — Equinor and RWE said on Thursday they plan to develop a supply chain for low-carbon hydrogen, allowing Germany to cut its reliance on coal power and thereby reduce its carbon emissions.

The two companies plan to build power plants in Germany that will initially be fuelled by natural gas, and later with hydrogen made in Norway at jointly constructed production facilities.

They will also build a hydrogen pipeline to connect the Norwegian production hubs with the power plants in Germany. The investments are contingent on regulatory approval for the pipeline, which is expected to start deliveries in 2030.

The companies didn’t provide details about their financial commitments, though RWE, Germany’s top power producer, said the partnership would cover investments worth several billions of euros.

“But it is too early to go into detail. First, the infrastructure needs to be built and a suitable political framework needs to be established,” the company said.

Equinor CEO Anders Opedal said the cost of the total supply chain could run into the “tens of billion euros”. The pipeline, if it went ahead, would cost €3bn alone and would be the first of its kind, he said.

It could transport 4-million tonnes of hydrogen a year, Opedal said, equivalent to 135 terawatt hours of energy, which is similar to total Norwegian hydropower production. “So it’s a massive amount of energy that can go through this pipeline,” he said.

Infrastructure

“That also creates the infrastructure between Norway and Germany, where hydrogen from renewables can be added over time because this kind of infrastructure has a long lifetime.”

The project will initially supply “blue” hydrogen made from gas. This will be subject to carbon capture and storage, which Equinor and RWE said in a joint statement would bury more than 95% of the associated emissions.

The companies aim to produce “green” hydrogen from renewable sources such as offshore wind turbines, in due course, thus cutting emissions further.

The partnership reflects Germany’s efforts to diversify away from Russian gas, where supplies have stopped in the wake of the Ukraine war.

Norway last year overtook Russia as Europe’s biggest gas supplier, with state-controlled Equinor the top exporter.

During a visit to Norway by German Chancellor Olaf Scholz last August, Prime Minister Jonas Gahr Stoere said the country was delivering gas at maximum capacity.

“There is an urgent need for a rapid ramp-up of the hydrogen economy,” RWE CEO Markus Krebber said in the statement. “Blue hydrogen in large quantities can make a start, with subsequent conversion into green hydrogen supply.”

Germany is planning multiple hydrogen import projects, with several of the country’s new import terminals for liquefied natural gas (LNG) also preparing to receive hydrogen later.

Reuters