Ørsted, a Danish renewable energy company, has taken the investment decision on the 50,000 tonne/year FlagshipONE e-methanol project. This will be the company’s first commercial-scale Power-to-X facility and an important step towards Ørsted’s ambition of taking a leading position in renewable hydrogen and green fuels.
To reinforce this commitment, Ørsted has acquired the remaining 55% stake in the project from Liquid Wind AB, the original developer. FlagshipONE, located in Örnsköldsvik, Sweden, is Europe’s largest FID’ed green e-methanol facility and is expected to enter operation in 2025. It will produce around 50,000 tonnes of e-methanol per year, helping to decarbonize the global shipping industry, which accounts for approximately 3% of global carbon emissions.
In addition to FlagshipONE, Ørsted is also developing the 300,000 tonne “Project Star” in the US Gulf Coast area and the “Green Fuels for Denmark” project in Copenhagen. Both of these projects will produce significant volumes of e-methanol to enable the decarbonization of shipping.
At present, green fuels for shipping come at a price premium compared to fossil-based alternatives. The industry needs supportive regulation to incentivize demand and drive the widespread adoption of green fuels. Until this regulation is in place, the pricing of e-methanol, even from top-quality Power-to-X assets like FlagshipONE, is subject to significant uncertainty and large-scale demand has yet to develop.
Ørsted is willing to take on risk and lead the development of the Power-to-X industry, including through strategic projects like FlagshipONE. However, regulatory action that aligns with the ambitions of developers and shipping companies is urgently needed.
Construction of FlagshipONE will begin in the spring of 2023. The project will be located on the grounds of the biomass-fired combined heat and power plant Hörneborgsverket in Örnsköldsvik, which is operated by Övik Energi. The e-methanol from FlagshipONE will be produced using renewable electricity and biogenic carbon dioxide, and will be sold to customers in the shipping and transportation sectors.