Agriculture and shipping are major producers of greenhouse gas, with the former accounting for 11 percent of all global greenhouse gas emissions, while the latter releases 940 million tonnes of CO2 annually.
Reducing the impact of these industries is imperative for securing climate neutrality.
Behind this massive decarbonisation effort will be offshore wind. Denmark, home to some of the world’s largest offshore wind companies, plans to tap into several of the country’s farms to power up the plant.
The development is looking to cut the emissions of these historically carbon-heavy industries. Owned by Denmark’s Copenhagen Infrastructure Partners (CIP), the plant, which has yet to be named, will be Europe’s largest green hydrogen facility. It’s expected to have a capacity of 1GW and be able to take 1.5 million tonnes of CO2 out of the equation. That’s about the equivalent of 730,000 cars off the road, according to CIP. The plant will produce hydrogen in the form of ammonia, which will then be used as agricultural fertiliser and fuel by shipping vessels.
Clean Hydrogen: A Step Away from Economically Viable
The relationship of offshore wind and sustainable hydrogen is inextricable. To see why, one needs to understand that not all hydrogen is clean. While the end product looks the same–invisible and odourless–the mode of production is where things get dirty.
Hydrogen is classified by colour: brown or black, blue, grey, and green. Brown or black hydrogen is derived from coal. Grey hydrogen is produced from fossil fuels such as natural gas. Both produce greenhouse gases as by-products. Blue hydrogen is extracted in much the same way as grey hydrogen, but uses carbon capture and storage (CCS) facilities to contain carbon waste.
Green hydrogen is made through electrolysis, an electricity-intensive process that draws its energy requirements from solar and offshore wind. As it comes from renewables, green is arguably the only net-zero type of hydrogen. Germany believes it’s the only sustainable type in the long-run.
Unfortunately, the cost of producing green hydrogen is still two to three times more expensive than blue hydrogen, which keeps plans for carbon neutrality from eliminating dependence on fossil fuels altogether.
For clean hydrogen to become financially viable, other sources of renewable energy will need to ramp up production to an industrial scale. “In the end it all comes down to who’s paying for it. Green hydrogen is a great opportunity but it will take some time to develop,” says Nico Bouwkamp, project manager at consulting firm Frontier Energy.
Staging Grounds for Green Hydrogen
Enter Denmark’s offshore wind industry. The Danes are uniquely positioned to demonstrate the viability of wind-powered green hydrogen on a larger scale. The country is the EU’s biggest oil producer, second only to the UK prior to Brexit. It’s also an offshore wind pioneer, constructing the world’s first offshore wind farm in 1991. Three decades later, over 40 percent of the country’s energy demands are supplied by wind, borne aloft by thousands of onshore wind turbines and 14 offshore wind energy farms.
The same farms will help support the power requirements of CIP’s massive hydrogen plant, in the form of both surplus and purchased energy. Future offshore projects, such as the 1GW-capacity Thor, are also expected to factor into the equation.
The Transition from Oil and Gas to Wind
CIP’s green hydrogen plant can be seen as a part of Denmark’s hard line stance against oil. The country has already stopped granting licenses for exploration and extraction in the North Sea. Meanwhile, it grows even more ambitious in its offshore wind projects, one of which is an offshore wind hub that’s expected to generate enough power for 10 million homes.
This shift away from fossil fuels onto offshore wind is only part of a larger trend. Prices and demand for oil are the lowest they’ve been in decades, with forecasts not expecting a return to pre-pandemic levels any sooner than 2022. The North Sea oil and gas industry is on the precipice of great change, driven to the brink by terminally declining product levels. The basin only has around ten to fifteen years of production left, according to some estimates.
Offshore Wind: Key to a Green Future
Hydrogen and wind energy carry the potential to pick up the slack. Yet removing polluting sources of hydrogen from the mix while green hydrogen remains expensive will be difficult. At least, in the medium term. “I think you will find that any deployment of blue hydrogen will be towards the end of the 2020s. By that time green hydrogen will be lower-cost and blue hydrogen will be a stranded asset,” say Graham Cooley, CEO of UK-based hydrogen technology and electrolyser manufacturer, ITM Power.
Given the promising growth of the offshore wind industry, such a scenario isn’t so far-fetched. In the UK, several offshore wind farms are still slated to become operational in the next decade, despite the economic uncertainty and job losses brought about by the pandemic. One of these is the Dolphyn wind farm off the coast of Aberdeen, which will be the first floating offshore plant in the world to produce green hydrogen.
Gigastack is another project that aims to establish the economic viability of wind-powered green hydrogen. The entire system, which is located in North Lincolnshire, is made possible through the collaboration of major companies from different sectors in energy, namely ITM Power, Ørsted, Phillips 66, and Element Energy.
While oil and gas struggles to squeeze out its next cycle of production, offshore wind is enjoying a tailwind from technological advancement and the declining cost of parts and production. Add its invariable role in producing green hydrogen, and you get a sector that’s firmly planted in the global roadmap towards a net-zero carbon future.
