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03 Jun 2024

Ørsted and Microsoft start new carbon removal agreement

Ørsted and Microsoft start new carbon removal agreement

A new agreement has been created between Ørsted and Microsoft, with the main aim of this agreement being for Ørsted to sell another one million tonnes of carbon removals to Microsoft. This sale will occur over ten years and the carbon removal will be provided by the Avedøre Power Station.

Ørsted’s plan, as part of this agreement and as part of the ‘Ørsted Kalundborg CO2 Hub’ is to create a carbon capture sire at its wood chip-fired Asnæs Power Station, which is located in Kalundborg, specifically in Western Zealand. They also plan to replicate this plan at the Avedøre Power Station’s straw-fired boiler, which can be found in the Greater Copenhagen area. Once this stage is complete, the combined heat and power plants will be capable of producing 430,000 tonnes of biogenic CO2 every year. This product will then go on to be shipped to a storage reservoir that is based in the Norwegian part of the North Sea. Once it has reached this point, the company has arranged for it to be stored permanently. The aim for the 'Ørsted Kalundborg CO2 Hub' is to be fully operational by the beginning of 2026.

Another part of the agreement involves Microsoft gaining access to one million tonnes of carbon removal, which they will be able to take from the star-fired unit at Avedøre Power Station. This part of the agreement will come into effect in 2026. The plant in question, is a combined heat and power plant, which takes locally sourced straw, which is a by-product of agriculture, and converts it into electricity and district heating. This process which focuses on capturing the biogenic carbon from biomass-fired combined heat and power plants and then proceeding to store it underground, shows potential to reduce carbon dioxide and remove CO2 from the atmosphere. Due to the fact that biogenic carbon, from sustainable biomass, is part of a natural biogenic carbon cycle and this results in negative emissions.

This agreement will be extremely beneficial to both companies, but it will also be beneficial to the development of this technique, which has a large amount of potential within the carbon capture industry. Bioenergy-based carbon capture and storage is currently in its early stages, however, the development and experience it will receive from this project, will help to develop the technique further and it will also help to promote the technique within the industry.

The agreement between the companies is a continuation of a previously existing commitment. The previous agreement revolves around Microsoft buying 2.67 million tonnes from Asnæs Power Station. This new agreement, which builds on the previous one, brings the total purchase under contract to 3.67 million tonnes of CO2.

For Microsoft, this deal will support and benefit the company, as it will help them build towards one of the major milestones which they have been hoping to achieve for a while. This is for the company to be carbon-negative by 2030.

Senior Vice President and Head of Ørsted’s Bioenergy business, Ole Thomsen, commented, "This expanded collaboration with Microsoft is a testament to our shared vision for a sustainable future. By combining Ørsted's expertise in bioenergy carbon capture and storage with Microsoft's commitment to reducing its carbon footprint, we’re showcasing how strategic relations can accelerate the transition to a greener economy."

 

Senior Director of Energy & Carbon Removals at Microsoft, Brian Marrs, added, “We’re proud once again to announce a landmark offtake agreement with Ørsted, which is pioneering responsible carbon removal development in Denmark while also meeting the needs of a decarbonised energy system. The urgency around climate goals means translating great planning into rapid action – and Ørsted remains a valuable collaborator in bringing big ideas to life. Today’s announcement is yet another tangible step towards building the technologies and commercial capabilities towards becoming carbon-negative by 2030.”

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