Orsted – Ørsted shuts down its last coal-fired heat and power plant

ORSTED

On 31 August 2024, Ørsted will shut down its last coal-fired combined heat and power plant, Esbjerg Power Station, located in the Western part of Denmark.

 

Today, Ørsted is one of the largest renewable energy companies in the world and the global leader in offshore wind power. Earlier, Ørsted was one of the most coal-intensive energy companies in Europe, but since 2006, the company has reduced its coal consumption significantly through a reduction in the number of heat and power plants as well as conversions to certified sustainable biomass instead of coal.

With this, the company will have shut down its last coal-fired heat and power plant, and Ørsted’s entire energy generation will be essentially fossil-free.

Ole Thomsen, Senior Vice President and Head of Ørsted’s Bioenergy business, says:
“Shutting down the last of our coal-fired heat and power plants marks the end of a chapter in our green transformation. For many years, Esbjerg Power Station has been a very important contributor to the Danish energy system, delivering electricity and stability to the power grid and district heating to the municipality of Esbjerg. The Danish authorities ordered us to continue operations at Esbjerg Power Station until 31 August to ensure the security of the electricity supply. Naturally, we complied with the order, but we believe that we, as a society, must phase out the use of gas, oil, and coal as soon as possible, and with the close down of the heat and power plant, we’re well on track to becoming the first major energy company to completely transform its energy production from fossil fuels to renewable energy.”

 

The yearly consumption of coal at Esbjerg Power Station has been approx. 500,000 tonnes, which is equivalent to approx. 1.2 million tonnes of carbon dioxide emissions (or the yearly emissions from approx. 600,000 fossil-fuelled cars in the EU). Shutting down Esbjerg Power Station is the last major step on Ørsted’s journey towards meeting its target of a 99 % green share of energy generation by 2025.

Ørsted has already reduced its scope 1-2 emissions intensity by 92 % from 2006 to 2023 and was the first energy company to get a science-based net-zero target. The shut-down of the last coal-fired heat and power plant marks a key milestone for the company as it has now taken all actions necessary to meet its industry leading science-based targets to reduce its scope 1-2 emissions intensity by 98 % by 2025.

Going forward, the power production will be covered by other power plants and wind and solar farms, and the local heating supply company in Esbjerg is establishing an alternative production capacity for delivering district heating to the municipality of Esbjerg. The 50 employees working at Esbjerg Power Station will either move to another position at Ørsted, retire, or be let go.

 

Studstrup Power Station and Kyndby Power Station

In order to ensure the security of the electricity supply in Denmark, the Danish authorities decided in October 2022 to order Ørsted to continue and resume operations of three of its power station units, which use oil and coal as fuel. This applied to unit 3 at Esbjerg Power Station and unit 4 at Studstrup Power Station, which both use coal as their primary source of fuel, and unit 21 at Kyndby Peak Load Plant, which uses oil as fuel. The two latter units had already been decommissioned and preserved.

On 31 August, Ørsted will also be shutting down the coal-fired unit 4 at Studstrup Power Station as well as Kyndby Power Station’s unit 21.

Ørsted still has coal as a reserve fuel at Studstrup Power Station’s unit 3, while a large wood pellet silo is being rebuilt after a fire. Ørsted expects to get the silo ready again before the end of 2024, and then Ørsted will no longer either have or use coal as a reserve fuel.

 

 

SourceØrsted

EMR Analysis

More information on Ørsted: See the full profile on EMR Executive Services

More information on Mads Nipper (Group President and Chief Executive Officer, Ørsted): See the full profile on EMR Executive Services

More information on Ole Thomsen (Senior Vice President, Head of Bioenergy Business, Ørsted): See the full profile on EMR Executive Services

 

More information on The Science Based Targets initiative (SBTi): https://sciencebasedtargets.org/ + The Science Based Targets initiative (SBTi) is a global body enabling businesses to set ambitious emissions reductions targets in line with the latest climate science. It is focused on accelerating companies across the world to halve emissions before 2030 and achieve net-zero emissions before 2050.

The initiative is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) and one of the We Mean Business Coalition commitments. The SBTi defines and promotes best practice in science-based target setting, offers resources and guidance to reduce barriers to adoption, and independently assesses and approves companies’ targets.

  • Defines and promotes best practices in emissions reductions and net-zero targets in line with climate science.
  • Provides target setting methods and guidance to companies to set science-based targets in line with the latest climate science.
  • Includes a team of experts to provide companies with independent assessment and validation of targets.
  • Serves as the lead partner of the Business Ambition for 1.5°C campaign, an urgent call to action from a global coalition of UN agencies, business and industry leaders that mobilizes companies to set net-zero science-based targets in line with a 1.5 degrees C future.

 

More information on Net Zero by 2050 by the United Nations: https://www.un.org/en/climatechange/net-zero-coalition + Put simply, net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance.

Currently, the Earth is already about 1.1°C warmer than it was in the late 1800s, and emissions continue to rise. To keep global warming to no more than 1.5°C  – as called for in the Paris Agreement – emissions need to be reduced by 45% by 2030 and reach net zero by 2050.

More than 140 countries, including the biggest polluters – China, the United States, India and the European Union – have set a net-zero target, covering about 88% of global emissions. More than 9,000 companies, over 1000 cities, more than 1000 educational institutions, and over 600 financial institutions have joined the Race to Zero, pledging to take rigorous, immediate action to halve global emissions by 2030.

More information on Net Zero by 2050 by the Science Based Targets initiative (SBTi): https://sciencebasedtargets.org/net-zero + The SBTi’s Corporate Net-Zero Standard is the world’s only framework for corporate net-zero target setting in line with climate science. It includes the guidance, criteria, and recommendations companies need to set science-based net-zero targets consistent with limiting global temperature rise to 1.5°C.

UN vs. SBTi: 

  • UN targets nations, while SBTi focuses on companies. UN sets a broad goal, while SBTI provides a detailed framework for target setting.
  • Both aim to achieve net zero emissions and limit warming to 1.5°C. The UN sets the overall direction, and SBTi helps businesses translate that goal into actionable plans.

Key components of the Corporate Net-Zero Standard:

  1. Near-term targets: Rapid, deep cuts to direct and indirect value-chain emissions must be the overarching priority for companies. Companies must set near-term science-based targets to roughly halve emission before 2030. This is the most effective, scientifically-sound way of limiting global temperature rise to 1.5°C.
  2. Long-term targets: Companies must set long-term science-based targets. Companies must cut all possible – usually more than 90% – of emissions before 2050.
  3. Neutralize residual emissions: After a company has achieved its long-term target and cut emissions by more than 90%, it must use permanent carbon removal and storage to counterbalance the final 10% or more of residual emissions that cannot be eliminated. A company is only considered to have reached net-zero when it has achieved its long-term science-based target and neutralized any residual emissions.
  4. Beyond Value Chain Mitigation (BVCM): Businesses should invest now in actions to reduce and remove emissions outside of their value chains in addition to near- and long-term science-based targets.

 

 

 

 

 

EMR Additional Notes: 

  • Biomass:
    • Biomass is renewable organic material that comes from plants and animals. Biomass contains stored chemical energy from the sun that is produced by plants through photosynthesis.
    • Biomass is a clean, renewable energy source. Its initial energy comes from the sun, and plants or algae biomass can regrow in a relatively short amount of time. Trees, crops, and municipal solid waste are consistently available and can be managed sustainably.
  • Bioenergy:
    • It is a form of renewable energy that is derived from recently living organic materials known as biomass, which can be used to produce transportation fuels, heat, electricity, and products.
    • Bioenergy is renewable energy produced from organic matter (called “biomass”) such as plants, which contain energy from sunlight stored as chemical energy. Bioenergy producers can convert this energy into liquid transportation fuel—called “biofuel”—through a chemical conversion process at a biorefinery.
    • Types of bioenergy include biogas, bioethanol, and biodiesel which may be sourced from plants (corn, sugarcane), wood, agricultural wastes, and bagasse. Bioenergy is considered renewable because its source is inexhaustible, as plants obtain their energy from the sun through photosynthesis which can be replenished.
  • Biofuel:
    • Any fuel that is derived from biomass—that is, plant or algae material or animal waste. Since such feedstock material can be replenished readily, biofuel is considered to be a source of renewable energy, unlike fossil fuels such as petroleum, coal, and natural gas.
    • The two most common types of biofuels in use today are ethanol and biodiesel, both of which represent the first generation of biofuel technology.

 

  • Carbon Dioxide (CO2):
    • Primary greenhouse gas emitted through human activities. Carbon dioxide enters the atmosphere through burning fossil fuels (coal, natural gas, and oil), solid waste, trees and other biological materials, and also as a result of certain chemical reactions (e.g., manufacture of cement). Carbon dioxide is removed from the atmosphere (or “sequestered”) when it is absorbed by plants as part of the biological carbon cycle.
  • Biogenic Carbon Dioxide (CO2):
    • Biogenic Carbon Dioxide (CO2) and Carbon Dioxide (CO2) are the same. Scientists differentiate between biogenic carbon (that which is absorbed, stored and emitted by organic matter like soil, trees, plants and grasses) and non-biogenic carbon (that found in all other sources, most notably in fossil fuels like oil, coal and gas).
  • Carbon Capture and Storage (CCS):
    • CCS involves the capture of carbon dioxide (CO2) emissions from industrial processes. This carbon is then transported from where it was produced, via ship or in a pipeline, and stored deep underground in geological formations.
    • CCS projects typically target 90 percent efficiency, meaning that 90 percent of the carbon dioxide from the power plant will be captured and stored.
  • Decarbonization:
    • Reduction of carbon dioxide emissions through the use of low carbon power sources, achieving a lower output of greenhouse gasses into the atmosphere.
  • Carbon Footprint:
    • There is no universally agreed definition of what a carbon footprint is.
    • A carbon footprint is generally understood to be the total amount of greenhouse gas (GHG) emissions that are directly or indirectly caused by an individual, organization, product, or service. These emissions are typically measured in tonnes of carbon dioxide equivalent (CO2e).
    • In 2009, the Greenhouse Gas Protocol (GHG Protocol) published a standard for calculating and reporting corporate carbon footprints. This standard is widely accepted by businesses and other organizations around the world. The GHG Protocol defines a carbon footprint as “the total set of greenhouse gas emissions caused by an organization, directly and indirectly, through its own operations and the value chain.”
  • CO2e:
    • CO2e means “carbon dioxide equivalent”. In layman’s terms, CO2e is a measurement of the total greenhouse gases emitted, expressed in terms of the equivalent measurement of carbon dioxide. On the other hand, CO2 only measures carbon emissions and does not account for any other greenhouse gases.
    • A carbon dioxide equivalent or CO2 equivalent, abbreviated as CO2-eq is a metric measure used to compare the emissions from various greenhouse gases on the basis of their global-warming potential (GWP), by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential.
      • Carbon dioxide equivalents are commonly expressed as million metric tonnes of carbon dioxide equivalents, abbreviated as MMTCDE.
      • The carbon dioxide equivalent for a gas is derived by multiplying the tonnes of the gas by the associated GWP: MMTCDE = (million metric tonnes of a gas) * (GWP of the gas).
      • For example, the GWP for methane is 25 and for nitrous oxide 298. This means that emissions of 1 million metric tonnes of methane and nitrous oxide respectively is equivalent to emissions of 25 and 298 million metric tonnes of carbon dioxide.
  • Carbon Credits or Carbon Offsets:
    • Permits that allow the owner to emit a certain amount of carbon dioxide or other greenhouse gases. One credit permits the emission of one ton of carbon dioxide or the equivalent in other greenhouse gases.
    • The carbon credit is half of a so-called cap-and-trade program. Companies that pollute are awarded credits that allow them to continue to pollute up to a certain limit, which is reduced periodically. Meanwhile, the company may sell any unneeded credits to another company that needs them. Private companies are thus doubly incentivized to reduce greenhouse emissions. First, they must spend money on extra credits if their emissions exceed the cap. Second, they can make money by reducing their emissions and selling their excess allowances.

 

  • Global Warming: 
    • Global warming is the long-term heating of Earth’s climate system observed since the pre-industrial period (between 1850 and 1900) due to human activities, primarily fossil fuel burning, which increases heat-trapping greenhouse gas levels in Earth’s atmosphere.
  • Global Warming Potential (GWP): 
    • The heat absorbed by any greenhouse gas in the atmosphere, as a multiple of the heat that would be absorbed by the same mass of carbon dioxide (CO2). GWP is 1 for CO2. For other gases it depends on the gas and the time frame.
    • Carbon dioxide equivalent (CO2e or CO2eq or CO2-e) is calculated from GWP. For any gas, it is the mass of CO2 which would warm the earth as much as the mass of that gas. Thus it provides a common scale for measuring the climate effects of different gases. It is calculated as GWP times mass of the other gas. For example, if a gas has GWP of 100, two tonnes of the gas have CO2e of 200 tonnes.
    • GWP was developed to allow comparisons of the global warming impacts of different gases.
  • Greenhouse Gas (GHG):
    • A greenhouse gas is any gaseous compound in the atmosphere that is capable of absorbing infrared radiation, thereby trapping and holding heat in the atmosphere. By increasing the heat in the atmosphere, greenhouse gases are responsible for the greenhouse effect, which ultimately leads to global warming.
    • The main gases responsible for the greenhouse effect include carbon dioxide, methane, nitrous oxide, and water vapor (which all occur naturally), and fluorinated gases (which are synthetic).
  • GHG Protocol Corporate Standard Scope 1, 2 and 3: https://ghgprotocol.org/ + The GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidance for companies and other organizations preparing a corporate-level GHG emissions inventory. Scope 1 and 2 are mandatory to report, whereas scope 3 is voluntary and the hardest to monitor.
    • Scope 1: Direct emissions:
      • Direct emissions from company-owned and controlled resources. In other words, emissions are released into the atmosphere as a direct result of a set of activities, at a firm level. It is divided into four categories:
        • Stationary combustion (e.g fuels, heating sources). All fuels that produce GHG emissions must be included in scope 1.
        • Mobile combustion is all vehicles owned or controlled by a firm, burning fuel (e.g. cars, vans, trucks). The increasing use of “electric” vehicles (EVs), means that some of the organisation fleets could fall into Scope 2 emissions.
        • Fugitive emissions are leaks from greenhouse gases (e.g. refrigeration, air conditioning units). It is important to note that refrigerant gases are a thousand times more dangerous than CO2 emissions. Companies are encouraged to report these emissions.
        • Process emissions are released during industrial processes, and on-site manufacturing (e.g. production of CO2 during cement manufacturing, factory fumes, chemicals).
    • Scope 2: Indirect emissions – owned:
      • Indirect emissions from the generation of purchased energy, from a utility provider. In other words, all GHG emissions released in the atmosphere, from the consumption of purchased electricity, steam, heat and cooling. For most organisations, electricity will be the unique source of scope 2 emissions. Simply stated, the energy consumed falls into two scopes: Scope 2 covers the electricity consumed by the end-user. Scope 3 covers the energy used by the utilities during transmission and distribution (T&D losses).
    • Scope 3: Indirect emissions – not owned:
      • Indirect emissions – not included in scope 2 – that occur in the value chain of the reporting company, including both upstream and downstream emissions. In other words, emissions are linked to the company’s operations. According to GHG protocol, scope 3 emissions are separated into 15 categories.
Scheme 1,2,3 scope emissions Credit: Plan A based on GHG protocol