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Equinor, RWE Plan Natural Gas Plants, Blue Hydrogen Hub in German Coal Exit
RWE AG and Equinor ASA have agreed to work on a road map to phase out coal in Germany, led by a combination of more natural gas-fired power plants and a hydrogen production hub fed by Norway’s reserves.
In a memorandum of understanding (MOU), RWE and Equinor agreed to collaborate on a plan that could assist in Germany’s plan to replace coal in the power generation mixture with low-carbon fuels by 2030.
“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,” Equinor CEO Anders Opedal said. “The collaboration has the potential to develop Norway into a key supplier of hydrogen to Germany and Europe.”
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As a part of the plan, the companies may work to build additional natural gas power plants in Germany that could be later converted to use hydrogen as a fuel source. The plants could be fed by natural gas exported from Norway via the Europipe systems and Norpipe.
Meanwhile, in Norway, the firms may collaborate on a hydrogen production hub to produce hydrogen from natural gas and reduce carbon by 95% using carbon capture, utilization and sequestration (CCUS), according to the firms. Hydrogen produced from natural gas using CCUS is referred to as blue hydrogen.
The firms may also work on additional wind farms that could supply renewable electricity to produce hydrogen through carbon-free electrolysis, referred to as green hydrogen.
RWE CEO Markus Krebber said a “rapid ramp up” of a hydrogen economy in Europe would be needed to maintain the region’s climate goals while ensuring economic stability.
“In addition, our planned investments into hydrogen-ready gas-fired power plants will ensure security of supply in a decarbonized power sector,” he said.
Coal’s role as a stop-gap power source in Germany has risen in the past year. As natural gas prices have soared and Russia’s supply of pipeline gas to Germany has dwindled, utilities including RWE and Uniper SE have delayed retiring aging coal plants and restarted formerly shuttered facilities.
Europe’s energy crisis has also highlighted Norway’s importance as a prolific natural gas supplier to the continent. Norway now is the European Union’s (EU) top gas supplier. Consultancy Rystad Energy estimated Norway’s gas exports to the EU last year could reach 90 Bcm, or around 25% of its estimated energy demand. The United States exported around 53 million tons of LNG to Europe last year, according to data from Kpler.
Equinor has also outlined plans to sustain that momentum, disclosing investments in novel offshore production projects and extending the lifespan of its Hammerfest LNG terminal.
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