In a landmark agreement, Ørsted will sell an additional one million tonnes of carbon removal over a ten-year period to Microsoft from Avedøre Power Station, part of the bioenergy carbon capture and storage project known as the ‘Ørsted Kalundborg CO2 Hub’. This new deal builds on Microsoft’s existing commitment to purchase 2.67 million tonnes of CO2 from Asnæs Power Station, bringing the total contracted carbon removal to 3.67 million tonnes.
As part of the ‘Ørsted Kalundborg CO2 Hub’, Ørsted will implement carbon capture at its wood chip-fired Asnæs Power Station in Kalundborg and the straw-fired boiler at Avedøre Power Station in the Greater Copenhagen area. The project aims to capture 430,000 tonnes of biogenic CO2 annually from these combined heat and power plants, with the captured CO2 being shipped to a storage reservoir in the Norwegian part of the North Sea for permanent storage. The hub is set to become operational by early 2026.
The new agreement specifies that Microsoft will acquire one million tonnes of carbon removal from the straw-fired unit at Avedøre Power Station starting in 2026. This combined heat and power plant converts locally sourced straw, a by-product of agriculture, into electricity and district heating. By capturing and storing the biogenic carbon from biomass-fired plants, the process not only reduces but also removes CO2 from the atmosphere, creating negative emissions due to the natural biogenic carbon cycle of sustainable biomass.
The collaboration between Ørsted and Microsoft is crucial for the development of the ‘Ørsted Kalundborg CO2 Hub’, as bioenergy-based carbon capture and storage technology is still emerging. Although the project received a subsidy from the Danish Energy Agency, the revenue from the sale of carbon removal certificates was factored in before the investment decision and was a key element of the competitive offer submitted through the Danish subsidy scheme.
The importance of carbon removal technologies such as BECCS in limiting global warming is highlighted in the latest report by the UN’s Intergovernmental Panel on Climate Change. Projects like the ‘Ørsted Kalundborg CO2 Hub’ are essential for supporting companies like Microsoft in achieving their sustainability goals and contributing to global climate targets.
Ole Thomsen, senior vice president and head of Ørsted’s Bioenergy business, stated: “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.”
For Microsoft, this agreement represents another significant step towards its goal of becoming carbon-negative by 2030. Brian Marrs, senior director of energy & carbon removals at Microsoft, commented: “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.”
For more information visit www.orsted.com
