Despite the production of e-Methanol being dwarfed by a growing demand that runs well into the gigawatts, the largest project so far has only been at pilot scale, producing one or two megawatts. A new project, however, being engineered to provide offtake to shipping giant Maersk and others is ten times larger than any plant built to date. So why is this project setting a new benchmark and what does it mean for e-Methanol going forward?
By Steve Meyer
The world’s largest e-Methanol production facility, commissioned by European Energy, will be installed in Kassø, located west of Aabenraa in Southern Denmark. European Energy, an innovator of green energy solutions, already has a strong track record throughout Europe in developing wind and photovoltaic (PV) renewable energy plants. Keen to develop its business further, the company is entering the e-Methanol market, where its renewable energy technology will support the development of the largest e-Methanol production plant worldwide.
The challenges for larger-scale e-Methanol production plants include sourcing enough renewable energy to power the plant processes and finding a viable offtake based on final product prices that are considerably higher than traditional methanol production. To date, it has been difficult to find partners that have the courage and knowledge to make such a project a success.
“This is a crucial moment in the green transition as we move forward with the decarbonization of hard-to-abate sectors such as the shipping industry, and we trust that Siemens Energy outstanding know-how of electrolyzers will become a strong foundation to expand our business of delivering sustainable fuels to the world.”Knud Erik Andersen, CEO of European Energy
European Energy solved these two challenges early in the project lifecycle by using its own wind and PV technology and securing an early agreement with Maersk to take the majority of the offtake. The system utilizes Siemens Energy electrolyzer technology to produce hydrogen which is fed to a synthesis process where it is combined with carbon dioxide to produce e-Methanol.
For the development of an industrial scale plant, a deep understanding of the process is required. Siemens Energy is currently investing a great deal in resources for electrolyzer manufacturing with industrial-grade series production lines for stacks.
The first electrolyzer array is already in production and scheduled to be commissioned in Summer 2023. It will be followed by two more arrays. The project has a tight schedule, but the mechanisms Siemens Energy has put in place to support the expected growth in electrolyzer production, with standardization of module manufacturing and pre-packaging into arrays combined with a very efficient supply chain, means it will deliver as planned.
Why is hydrogen important?
Hydrogen offers a new solution for existing markets to reduce carbon emissions. We are heading towards a tremendous transformation as we move from processing oil- and gas-based fuels to e-Fuels, such as e-Methanol. The urgent need for decarbonization means we are anticipating exponential growth in the use of electrolyzers and decarbonized solutions.
A strong step forward
Although there have been many visions for large-scale e-Methanol production, the project in Kassø is the first to take steps forward in terms of significant scale. It comes at an important time, when, alongside the environmental challenges we face, the war in Ukraine and other geopolitical pressures, supply chain issues, and the need to secure energy supplies are all highlighting weaknesses in the resilience of some countries.
For the shipping industry, the International Maritime Organization (IMO) has already committed the sector to halve greenhouse gas (GHG) emissions by 2050 (based on 2008 levels) to meet Paris Agreement targets – Maersk is even aiming for net zero by 2040. Sustainable fuels are a critical aspect of meeting these targets and Maersk is a first mover in the adoption of technology as the Kassø plant will provide fuel for its first e-Methanol driven container vessel. By taking this essential step with the offtake agreement, Maersk has enabled the Kassø project to go ahead. Although initial prices for the e-Methanol will be higher, this is a relatively small percentage of overall fuel consumption. Going forward, however, Maersk’s commitment to the Kassø plant will enable further investments to drive costs down and increase production efficiency.
The Kassø project has shown that, with the right ingredients, it is possible to realize larger projects and start a new e-Methanol economy. It opens a door to the potential this fuel has to offer, especially in hard-to-abate industries such as shipping. We hope the success of this project will lead to further investments from others and the generation of a “critical mass” that will drive down costs and make e-Methanol a fully viable fuel for the future.
August, 2022
Steve Meyer is an independent journalist specializing in advanced technology.
