Cluster Catch-up: Varanger KraftHydrogen

Nov 18

“We believe that supporting large scale projects will introduce economies of scale and increased innovation in technology and implementation – thus pushing the prices down for future projects”.

Cluster Catch-up is a column where we ask our members six questions to catch a glimpse into their daily business life. In the last Cluster Catch-up, we talked with Kjetil Tronvik Midthun, Manager in Greensight, and how they are focusing on renewable energy sources. When asked who they would like to see next in the series, Greensight nominated Varanger KraftHydrogen.

Christian Bue, CEO - Varanger KraftHydrogen.

Christian Bue is CEO of Varanger KraftHydrogen and has a Master of Science in Petroleum Technology. He is also CEO of Green Ammonia Berlevåg, a project with Aker Clean Hydrogen to produce green ammonia and hydrogen in northern Norway.

What is Varanger KraftHydrogen’s primary focus right now?

VKH is a daughter company in the Varanger Kraft group, where the main business areas are development and operation of renewable energy products, such as wind power and hydrogen related products. VKH currently have three main focus areas;

Producing green hydrogen from wind power, through the Haeolus project. The main activity in the project is to look at different operational modes when utilizing wind to produce green hydrogen through electrolysis. This is a Horizon 2020 project, and thus involves much R&D. However, our goal is to commercialise the production within the next years. We have installed a 2,5 MW electrolyser in Berlevåg, with the capacity of 1 ton per day of compressed hydrogen.
Developing an ammonia plant which will be placed in Berlevåg, together with Aker Clean Hydrogen. The Green Ammonia Berlevåg project will have an installed electrolyser capacity of 100 MW, and is planned finalised early 2025. The plant will be based on wind power from Raggovidda. The project is part of a full value chain cooperation, through the ZEEDS initiative, with strong industrial players in each part of the chain. The ammonia will be used as fuel for shipping. This video gives a short introduction.
Developing and building Raggovidda 3, which will have ~103 MW installed effect of wind power. Raggovidda is the most efficient wind farm in Norway, with a 49% capacity factor. The wind farm is planned in parallel with the ammonia plant.

What are the biggest challenges and opportunities for Varanger KraftHydrogen in the future?

Producing green hydrogen is still more expensive than the grey alternatives. Realizing new, large scale facilities will depend on support in the early years of operation. Most of the current support schemes are mainly focused on pilots and R&D level, and not on industrial scale. We believe that supporting large scale projects will introduce economies of scale and increased innovation in technology and implementation – thus pushing the prices down for future projects.
We see many opportunities connected to utilising green energy sources and refining these into energy carriers. The ammonia project is an example of such an opportunity. Long distance shipping is in need of a green alternative fuel, and ammonia is pointed out to be the best solution. There will be a high demand along the full coast of Norway, including the Arctic region.

How can hydrogen be a part of the solution for the future?

It is not possible to decarbonise every sector with pure electricity. Weight restrictions and distance are two examples of factors that impact which fuel is most suitable for sectors, that cannot be directly solved by electricity. Hydrogen and other hydrogen carriers, provide a solution to many of these sectors. Hydrogen production can also function as a grid balancing tool in regions with weak grid infrastructure. Hydrogen and related products also presents new business opportunities.

What is your primary focus when it comes to sustainability?

All our projects and activities are fully based on sustainability. We are excited to be a first mover both in production of green hydrogen and of green ammonia. Our goal is to contribute to decarbonisation and to generate new, “green” jobs in the region.

Why did you decide on becoming a member of Ocean Hyway Cluster?

We see Ocean Hyway Cluster as one of the most important networks and facilitators for developing green solutions within the maritime sector. They produce quality reports that are very useful for understanding the value chain and the aspects of both utilisation and production of green fuel. The cluster have a high number of partners, opening the gate to a wide network with the hydrogen business.

Which cluster member should we interview next?

We would like to get an update from Hyon in the next interview.