Renewable hydrogen and e-fuelsImportance of scale and way forward in a production context

Anders Nordstrøm30 January 2020

The Ørsted Way Let’s create a world that runs entirely on green energy

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Sources: IRENA Renewable Power Generation Costs in 2018, Wind Europe 1. 2018 average global capacity factors 2. Potential towards 2050 identified by the interest organisation Wind Europe. European Commission expect 230-450GW (depending on scenario) offshore wind in 20503

Why offshore wind and electrolysis?

Scale Capacity factor Resource availability

Solar PV Onshore wind Offshore

18%

43%

34%

Wind farms >1.2GW currently being commissioned

Highest capacity factor of variable renewable generation1

450GW of realizable potential identified in Europe2

212GW North Sea 83GW

Baltic Sea

85GW Atlantic Ocean

70GW Southern

Europe

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Note: Polymer electrolyte membrane electrolysis technology assumed Source: IEA, IRENA, FVV, DLR/LBST/Fraunhofer/KBB, Schmidt et al. 2017, Ferrero et al. 2016, Götzet al. 2016, company presentations, expert interviews, BCG analysis5

Investment cost for electrolysers expected to decrease substantially - Scale is the main factor affecting initial investment costs

400

200

0

500

300

100

600

700

1,200

800

900

1,000

1,100

Electrolyzer cost (€/kW)

2018 2030

Small electrolyser (10MW)

Tech. cost reduction levers

Large electrolyser (100MW)

Well established technology, dating back to the XVIII century

Role

– Scale-up of stack to 5MW

– Test of semi-automatic manufacturing

– Design of production capacity to 300MW/yr from 2023 -1GW/yr by mid-2020s

– Scenario assessment of electrolyser implementation in energy system

– Identification of location for up to 100MW potential project in next phase

Source: Gigastack project6

The Gigastack project brings together electrolyser manufacturing and project deployment to create a tangible way forward to benefit from scale

Findings

3. Scale-up of utmost importance to decrease investment cost

2. Removal of regulatory barriers are must-wins to ensure cost competitive hydrogen

1. Cost of electricity make up majority of lifetime hydrogen cost

Source: Gigastack Project7

While industrialisation of electrolyser manufacturing has only just begun it is evident significant progress is already being made

Footprint comparison of what it takes to make a 10MW electrolyser from ITM Power modules

(2x5MW modules shown of left hand side)Modelled projections of stack cost reductions

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We recently obtained EUDP funding to mature the H2RES project to deliver green H2 for road transport in the Copenhagen area

The project

– 2MW electrolyser

– connected to nearby wind turbines

– placed at Avedøre power station

– producing H2 for transport

Partners and funding

– DKK 34.6m funding granted by EUDP

– Project partners: Ørsted, EverfuelEurope, NEL Hydrogen, GreenHydrogen, DSV Panalpina, Hydrogen Denmark, Energinet Elsystemansvar

Besides involvement in H2RES and Gigastack, Ørsted is an active participant in several renewable hydrogen activities and matures asset projects together with partners

9 Source: Pictures by Westküste 100 and ISPT

Westküste 100 ISPT Gigawatt

+ maturation of a number of electrolysis projects in North

Western Europe

Project development

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Thank you