2 June 2021

"World first" climate-neutral cement factory to be built on Gotland

Heidelberg Cement Group, the world's fourth largest cement manufacturer, is drawing up plans for the cement factory in Slite on Gotland. Today, the factory produces the majority of the cement in Sweden, accounting for 3-4% of the country's total annual carbon dioxide emissions.

Heidelberg has initiated a feasibility study on, among other things, technology choice, financing and environmental impact. It says that by 2030 it will be able to capture and store the majority of the emissions, 1.8 Mt of CO2 underground. Together with an investment in bio-based fuels - which are counted as carbon neutral - cement production will therefore be deemed climate neutral. The reason for locating the factory in Slite is that it is one of Europe's largest and is also located on the coast, which facilitates the transport of cement and CO2 for storage. Heidelberg expects that the electricity demand will increase fivefold and therefore call for "significant electricity network upgrades" both on and to Gotland. 

However, HeidelbergCement and the Swedish government still have to reach agreement on financing before the Slite project can become reality. Sweden’s Minister for Enterprise Ibrahim Baylan said the cost of the site would be three or four times that of Brevik, a Norwegian plant that Heidelberg is building now, estimated to reach NKr3.3bn ($397m) for carbon capture, which is part of a broader NKr25bn investment that also covers transportation and storage. (Dagens industri, Financial Times)

Scatec makes USD billion investment in South Africa

Norwegian solar developer Scatec has been awarded another contract in South Africa. The contract consists of the three projects Kenhardt 1-3 with a total size of 540 MW. The power from the project will be sold to South Africa under a 20-year agreement. The USD 1 billion investment will be financed with debt from a consortium of commercial banks and development banks with an expected debt ratio of 80 percent. Scatec will own 51% of the capital in the project, while its local partner H1 Holdings will own 49%. (Energi Watch)

Ørsted will spend DKK 350 billion on renewable energy

The Danish offshore wind developer Ørsted has an ambition to reach 50 GW of installed renewable capacity by 2030, at a cost of DKK 350 billion in the years 2020-2027, the company said in connection with their capital market day. This is 50% more than the estimate on the previous capital market day. Of the investments, 80% will go to offshore wind and green hydrogen, while 20% to go to onshore wind power. (E24, press release)

Ørsted director: Large competition in onshore wind but large market

Ørsted is also stepping up its ambitions within the company's onshore division, where the target for installed capacity in connection with Wednesday's capital market day was raised to 17.5 GW by the end of 2030, up from 4.7 GW in 2021.

Ørsted sees a market in great growth, but also with great competition, especially in the USA, where the vast majority of onshore capacity is located, according to Declan Flanagan, director of Ørsted's onshore division. “It is clearly a competitive market, and it always has been, but the market has also grown a lot. On Capital Markets Day two and a half years ago, the forecast was for the US market of 150 GW for wind and solar. Today, the forecast is a 300 GW market, says Declan Flanagan.

Unlike offshore wind, Ørsted's main market, which is characterized by relatively few but very large players, the market for onshore wind and solar energy is a different size. Here is more about the offer, and the many players in the market could immediately invite consolidation for a company like Ørsted. But Ørsted will continue to focus on project acquisitions rather than company acquisitions, it reads. Flanagan said that “The onshore market is quite fragmented. This is partly due to lower start-up costs, and we expect this to continue. We see ourselves as an opportunistic collector at the project level, as we have been successful in the US, but not at the platform level.” (NP Investor)

Nasdaq buys carbon removals platform Puro.earth

Nasdaq announced its acquisition of a majority stake in Puro.earth, a leading marketplace for carbon removal. Puro.earth is the world´s first marketplace to offer industrial carbon removal instruments that are verifiable and tradable through an open, online platform. The platform already provides carbon removal services to some of the world’s leading corporations, including Microsoft and SEB. (press release)

What we’re reading

• BOE’s Bailey Says Disorderly Green Shift Could Spark Inflation (Bloomberg)
• Deal near on forcing companies to disclose climate risks, says central bank chief (Financial Times, paywall)
• Five reasons why the EU's taxonomy is needed (Dagens Industri, Swedish)
• Sweden’s recovery plan criticized - "parasites on the EU recovery fund" (Dagens Industri, Swedish)

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