Orsted Expands Carbon Removal Deal with Microsoft at Avedore Power Station

By Editor


Orsted has announced an extension of its carbon removal agreement with Microsoft, selling an additional one million tonnes of carbon removal over ten years from the Avedore Power Station.

This new deal builds on Microsoft’s existing commitment to purchase 2.67 million tonnes from Orsted’s Asnæs Power Station, bringing the total contracted amount to 3.67 million tonnes of CO2.

As part of the ‘Orsted Kalundborg CO2 Hub’ project, Orsted will implement carbon capture technologies at its wood chip-fired Asnæs Power Station in Kalundborg and the straw-fired boiler at Avedore Power Station in Greater Copenhagen.

The combined facilities are expected to capture 430,000 tonnes of biogenic CO2 annually, which will be transported to a storage reservoir in the Norwegian North Sea for permanent storage. The project is slated to become operational by early 2026.

Under the new agreement, Microsoft will receive one million tonnes of carbon removal from the straw-fired unit at Avedore Power Station starting in 2026. This combined heat and power plant uses locally sourced agricultural straw to produce electricity and district heating. By capturing and storing the biogenic carbon from these biomass-fired plants, the project aims to achieve negative emissions, removing CO2 from the atmosphere.

The collaboration between Orsted and Microsoft is pivotal for the development of the ‘Orsted Kalundborg CO2 Hub’, especially as bioenergy-based carbon capture and storage (BECCS) technology is still emerging.

The Danish Energy Agency has awarded the project a 20-year subsidy, recognizing its potential to contribute to national and global climate goals. Revenue from the sale of carbon removal certificates was factored into the project’s investment decision and the competitive offer submitted for the subsidy.

According to the latest report by the UN’s Intergovernmental Panel on Climate Change (IPCC), technologies like BECCS are crucial for limiting global warming, highlighting the significance of initiatives such as the ‘Orsted Kalundborg CO2 Hub’. These projects support companies like Microsoft in achieving their sustainability targets and contribute to global climate efforts.

Ole Thomsen, Senior Vice President and Head of Orsted’s Bioenergy business, stated, “This expanded collaboration with Microsoft is a testament to our shared vision for a sustainable future. By combining Orsted’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.”

For Microsoft, this agreement represents a significant step towards its goal of becoming carbon-negative by 2030.

Brian Marrs, Senior Director of Energy & Carbon Removals at Microsoft, said, “The urgency around climate goals means translating great planning into rapid action – and Orsted remains a valuable collaborator in bringing big ideas to life.”

Facts about the ‘Orsted Kalundborg CO2 Hub’:

In May 2023, the Danish Energy Agency awarded Orsted a 20-year subsidy contract for its carbon capture and storage (CCS) project.

Orsted will establish carbon capture at the Asnæs Power Station in Kalundborg and Avedore Power Station in Greater Copenhagen.

The project will capture 150,000 tonnes of biogenic CO2 annually from Avedore Power Station’s straw-fired unit. Initially, the CO2 will be transported by lorry to Asnæs Power Station.

The straw-fired unit at Avedore Power Station converts locally sourced straw into electricity and district heating.

The project will capture 280,000 tonnes of biogenic CO2 annually from Asnæs Power Station, which will also serve as a CO2 hub, managing and shipping CO2 from both Avedore and Asnæs to the Northern Lights storage reservoir in the Norwegian North Sea.

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