RWE to buy Dutch gas-fired plant from Vattenfall with hydrogen hub in mind

Image by Vattenfall AB.

June 2 (Renewables Now) - Swedish utility Vattenfall AB is disposing of a Dutch gas-fired power station to raise money for offshore wind investments, while German energy group RWE AG (ETR:RWE) has agreed to buy that particular facility as part of a plan to create a carbon-negative hydrogen hub in the area.

Specifically, Vattenfall has signed a deal to sell the 1.41-GW Magnum plant at Eemshaven in the Dutch province of Groningen to RWE at an enterprise value of EUR 500 million (USD 534m). Under the terms of the agreement, the German company should take over the site from the seller as of September 30, 2022. The transaction, which also includes a 5.6-MW co-located solar park, is subject to the advice of Vattenfall’s works council.

Vattenfall said in a statement on Thursday that this divestment will provide it with more resources to invest in the energy transition, including in offshore wind and district heating and cooling. Alexander van Ofwegen, Head of Vattenfall’s Dutch Heat operations and CFO Vattenfall in the Netherlands, stated that the company is focusing on decarbonising the heat supply to its customers as part of the gas phase-out in the Netherlands.

On the other hand, RWE is making the move in a drive to beef up its Eemshydrogen project cluster that has been in development since 2020 and targets the environmentally-friendly production of hydrogen in Eemshaven.

The Magnum plant, which has been in operation since 2013, has a hydrogen-ready construction design and is located in the immediate vicinity of an existing 1.56-GW coal-and biomass-fired power station owned by RWE. The latter points out that Magnum is already technically suitable to co-fire hydrogen by up to 30% and there is also the possibility of converting it to rely on hydrogen as its sole fuel by 2030.

“With the Magnum transaction, we are acquiring a state-of-the-art and already hydrogen-ready plant. Its use in combination with our existing power plant in Eemshaven, enables RWE to develop Eemshaven into one of the leading energy and hydrogen hubs in Northwest Europe,” commented Roger Miesen, CEO of RWE Generation SE.

Earlier this month, when announcing its bids for both sites of the 1.5-GW Hollandse Kust West (HKW) zone in the North Sea, RWE said it intends to connect the future HKW VII offshore wind park to 600 MW of onshore electrolysers to produce green hydrogen.

RWE’s plan for both the Magnum and Eemshaven power plants goes even further as it will look into the possibility of making the site’s output carbon dioxide (CO2) negative by adopting carbon capture and storage (CCS) technologies in the future. The company hopes to secure the needed government support to make this technically, politically and economically feasible, it said.

(EUR 1.0 = USD 1.069)

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Ivan is the mergers and acquisitions expert in Renewables Now with a passion for big deals and ambitious capacity plans.

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