The Danish government has awarded renewable energy company Orsted long-term state aid for carbon capture projects at two of its biomass-fired combined-heat-and-power plants, paving the way for the development of the country’s first full-scale CCS value chain.
Orsted is set to sign a 20-year CCS support contract with the Danish Energy Agency (DEA) for its woodchip-fired Asnaes plant and its straw-fired Avedoere plant at the Kalundborg energy hub on the coast of Zealand, after winning a tender which opened in May 2022.
The value of the subsidies was not disclosed. State aid will be paid out per tonne of CO₂ reduced, adjusted for fluctuations in CO₂ taxes and the EU emissions trading system price, according to the DEA. Orsted beat two rival bidders for the subsidies, one from the waste and district heating sector and one from the cement sector.
“Capture and storage of biogenic CO₂ is an important tool to mitigate climate change, and we look forward to initiating the work,” says Ole Thomsen, senior vice-president and head of Orsted’s bioenergy business. “We have established a strong partnership which will secure that we comply with the tight timeline set in the Danish tender.”
Emissions will be captured at a rate of about 430,000t/yr of CO₂ from 2026 and will be transported to the Northern Lights storage site in the Norwegian North Sea, which is under construction and is scheduled to start up next year with an injection capacity of 1.5mn t/yr. Northern Lights is owned in equal shares by European IOCs TotalEnergies, Equinor and Shell.
The project has secured backing from technology company Microsoft, which will purchase several million tonnes of carbon removals over a period of more than ten years in one of the largest offtake deals of its type by volume.
Just Catch
Confirmation of the subsidy award has enabled Orsted to kick off the project with the placement of a €200mn ($217mn) order with Norway-based Aker Carbon Capture for five of its modular Just Catch units as well as liquefaction systems and temporary CO₂ storage and on-/offloading facilities.
“We see this project as a milestone for our Just Catch standardised concept, a modular and configurable offering that enables time-efficient deployment of carbon capture units to the mid-scale emitter market,” says Valborg Lundegaard, CEO of Aker Carbon Capture.
Orsted has six biomass-fired units and provides around one-quarter of Denmark's district heating. “We are exploring the regulatory, technical and economic possibilities of carbon capture at our facilities," says Thomsen.
"Carbon capture will most likely be an important part of the green transition, and we see opportunities for capturing the carbon at some of our biomass-fired heat-and-power plants and to either store it underground in order to achieve negative emissions or use the carbon for the production of green fuels in power-to-X facilities,” says Thomsen.
Denmark is accelerating the development of CCS, with an eye on the potential of its section of the North Sea as one of Europe’s main storage hubs. Earlier this year, its largest storage project—Greensand—led by UK-based chemicals group Ineos and German energy company Wintershall Dea, claimed a major breakthrough with the world’s first injection into offshore storage of a cross-border shipment of CO₂ from a chemicals plant in Belgium.
Separately, TotalEnergies is involved in a two-year study of large-scale CO₂ transport and storage at the offshore Harald gas fields, of which it is operator. The French company has secured two licences covering 2,118km² off the west coast of Denmark. It will carry out evaluation and appraisal work to develop a project that could ultimately transport and permanently store more than 5mn t/yr of CO₂ by repurposing existing infrastructure and building new facilities.
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