BASF and RWE proposing 2GW offshore wind farm for green electricity and hydrogen for chemical industry
23 May 2021
In Ludwigshafen, Germany, Dr. Martin Brudermüller (BASF) and Dr. Markus Krebber (RWE), accompanied by Chairman of the Mining, Chemical and Energy Industries Union (IG BCE) Michael Vassiliadis, presented a project idea that envisions a new 2 GW offshore wind farm in the German North Sea to provide the Ludwigshafen chemical site with green electricity and enable CO2-free production of hydrogen.
The aim of the “Offshore-to-X” project is to electrify the production processes for basic chemicals, which are currently based on fossil fuels.
The 2GW wind farm will produce around 7,500 GWh of green electricity per year This would be in addition to the planned 20 GW by 2030 in existing legislation. The green electricity would therefore meet the criterion of additionality.
The potential offshore sites for this project are ones that are currently only planned for the period after 2030 according to Germany’s Site Development Plan and Network Development Plan. RWE will develop, build and operate the wind park. BASF will own a stake.
Around 80% of the approximately 7,500 GWh produced by the wind park will be supplied as green electricity for innovative technologies for CO2 reduction and thus power the transformation of BASF sites in Germany, especially the Verbund site in Ludwigshafen. Examples of such technologies are:
eCracker: Electrically heated steam cracker furnaces to produce petrochemicals at high temperatures (~850 °C); these temperatures will be reached in the eCracker using electricity instead of natural gas.
Methane pyrolysis: Methane pyrolysis uses green electricity to split methane into hydrogen and carbon. The hydrogen can be used, for example, to produce green ammonia. Another output of this process is high-purity solid carbon, a valuable raw material that can replace carbon in various industrial sectors, such as the steel industry.
Power-to-heat: Electrode boilers and high-temperature heat pumps will make it possible to use green electricity instead of fossil fuels to produce process heat.
Around 20% of the electricity produced by the wind park would be used to produce green hydrogen in northwestern Germany—approximately 30 million kilograms of green hydrogen per year for use in other industrial segments.
To advance the joint project, the CEOs of BASF and RWE have signed a letter of intent covering a wide-ranging cooperation for the creation of additional capacities for renewable electricity and the use of innovative technologies for climate protection.
These plans could result in the avoidance of around 3.8 million metric tons of CO2 emissions per year, of which 2.8 million tons would be realized directly at BASF in Ludwigshafen. It shows very clearly how climate protection and competitiveness can be harmonized in the chemical industry. No public subsidies would be needed for the construction of the wind farm.
Without the availability of sufficient volumes of electricity from renewable sources at competitive prices, our future transformation will not be possible! This task is only achievable with innovative and intensive cooperation between politics and industry. And it requires collaboration across the value chains. In our partnership between RWE as a leading company in power generation and BASF in chemicals, we bring together the necessary prerequisites and the will to shape things.—Martin Brudermüller, Chairman of the Board of Executive Directors of BASF SE
Coupling a new offshore wind farm already in the planning stage to an industrial customer such as BASF, who will convert its production to green electricity and hydrogen on this basis, would be a first for Germany. The realization of our proposal would represent a true acceleration of the expansion of renewable energies. Of course, there are still some open questions, but we want to push this forward—the faster, the better. This is how we will shape the energy transition.—Markus Krebber, CEO of RWE
Realizing this plan will require a suitable regulatory framework. Policymakers have said they plan to increase the expansion targets for renewable energies significantly and to accelerate capacity additions. For this to succeed, there will need to be a tendering process for offshore project sites where the current plans only foresee use after 2030.
The companies say that these sites should be specifically designated for tenders focused on industrial transformation processes. Another important factor: Green electricity should not be subject to EEG levy. In addition, there is currently no regulatory framework for CO2-free hydrogen production.
All of this sounds great and very impressive. But it does not sound very impressive that BASF is attempting to extort the German government.
Subsidization of renewables is financed with a toll placed upon all those investing in renewables (solar, wind, water etc.). Everyone consuming electric energy is burdened with this toll which is regulated via the German EEG law. Now, if no one is above the law why should BASF be exempted from their legal contribution as defined by the EEG? Such hypocritical exceptions have been made in the past and if this keeps going on at the established rate, soon the exception will replace the rule.
Posted by: yoatmon | 23 May 2021 at 06:01 AM
Growing the clean hydrogen market is a good thing. A large green H2 market will be needed in the future to power electric airliners and seaships.
A little H2 will also be needed to power a few novelty devices like hydrogen cars and trucks.
Posted by: Lad | 23 May 2021 at 08:38 AM
I don't understnad your comment. Offshore wind in Europe is already cheaper than coal with strike price in auctions for new capacity competing with gas. If BASF are taking a direct feed off the windfarm (i.e. not transmitting via the grid), why should they be paying a levy to the Transmission Grid Operators?
Posted by: Thomas Lankester | 24 May 2021 at 12:29 AM
@ Thomas Lankester:
Well, all other operators of wind and solar power generators in Germany - with rare exceptions - are obliged to pay the levy irregardless if they feed into the grid or make use of the power themselves. I see absolutely no reason to exempt BASF from this levy just because they may have "deeper pockets" than anyone else.
Posted by: yoatmon | 24 May 2021 at 03:21 AM
"are obliged to pay the levy irregardless if they feed into the grid or make use of the power themselves".
So TSO get paid regardless of whether their services are used or not?
Reform the levy so that everyone who avoids grid transmission benefits. Otherwise where is the incentive for enterprises that effectively deploy their own demand side management / storage? Why should they pay a TSO for transmission and grid balancing services that they have invested in already?
Easy work for the TSO whilst the enterprise pays for the services twice.
Posted by: Thomas Lankester | 24 May 2021 at 07:44 AM