Iberdrola and Ørsted Moving Forward with Large E-Methanol Plants

methanol production plants
Bell Bay Tasmania is scheduled to be home to one of the world's largest hydrogen/methanol plants (ABEL Energy)

Published Dec 20, 2022 6:45 PM by The Maritime Executive

While the shipping industry is moving quickly to embrace methanol and e-methanol/green methanol as its emerging leader for alternative fuels, ensuring the volumes necessary for the shipping industry remains a concern. Companies such as Maersk have said while they will have vessels ready to run on methanol in two years’ time, they doubt there will be a sufficient supply of the fuel.  More companies, however, are moving quickly to build the global supply of methanol.

Among the latest entrants into the market to produce large quantities of e-methanol are Spanish energy giant Iberdrola and Danish renewable energy company Ørsted most recognized for its development of wind farms. Iberdrola announced plans for what it is calling one of the largest hydrogen/methanol plants in the world to be located in Tasmania, Australia, while Ørsted is taking full ownership of a project in northern Sweden which it reports will be the largest green e-methanol project in Europe.

Iberdrola in Australia

Iberdrola Australia supported by the Australian government working with hydrogen developer ABEL Energy will build a green hydrogen and green methanol production plant at Bell Bay in northern Tasmania. The total investment for the development is slated at €1.1 billion ($1.2 billion).

"Iberdrola Australia's investment in the Bell Bay Powerfuels Project demonstrates our commitment to helping Australian businesses reduce their carbon emissions in sectors where historically, both technically and economically, it has been more difficult to make this transition. We are delighted to be able to combine Iberdrola's global expertise in green hydrogen technologies with ABEL Energy's local knowledge and commercial drive," said Ross Rolfe, CEO and Managing Director of Iberdrola Australia.

ABEL reports its first Australian green hydrogen and methanol project will be built at the port of Bell Bay, using Tasmania’s renewable hydro and wind-based power supply to produce hydrogen via electrolysis of water. The project will incorporate one of the largest electrolyze units – over 100MW – to be installed in Australia by 2025. Pure green hydrogen from the plant will be available for domestic customers, while hydrogen will also be reacted onsite with biogenic carbon to produce green methanol.

The project is set to produce 200,000 tons of green methanol per year for use as marine fuel in its first phase of development, rising to 300,000 tons in its second phase according to Iberdrola. 

Ørsted in Northern Sweden

Located in Örnsköldsvik in Northern Sweden, FlagshipONE is currently Europe’s largest green e-methanol project. Ørsted reported it has taken full ownership of FlagshipONE by acquiring the remaining 55 percent stake in the project from Liquid Wind AB, the original developer of the project, and has made the final investment decision to proceed with the project. It becomes the company’s first commercial-scale Power-to-X facility.

“The final investment decision on FlagshipONE proves our intention to take proactive investment decisions in order to drive the rapid maturation of the Power-to-X market beyond ambitions and announcements and into the delivery of molecules to abate well-to-wake emissions,” said Olivia Breese, CEO of Ørsted Power-to-X. “Our first offshore wind projects came with significant risk, but we saw a route to leveraging our capabilities to deliver that technology as a cornerstone in the green transformation. Today, Power-to-X is at a similar inflection point - and at Ørsted, we’re once again ready to assume risk and lead the maturation of this crucial technology.

FlagshipONE e-methanol project is designed with an initial capacity of 50,000 tons per year which will be used to help decarbonize the world’s shipping industry. Ørsted will start onsite construction of FlagshipONE in the spring of 2023 with the project located on the grounds of a biomass-fired combined heat and power plant operated by Övik Energi. The e-methanol from FlagshipONE will be produced using renewable electricity and biogenic carbon dioxide captured from Hörneborgsverket. In addition, FlagshipONE will use steam, process water, and cooling water from Hörneborgsverket. Excess heat from the e-methanol production process will be delivered back to Övik Energi and integrated in their district heating supply. FlagshipONE is expected to enter into operation in 2025.