The Moorburg coal power station boasts an eventful inception, a landmark closure, and now, a bright future.

It was opened in 2015 by Swedish utility Vattenfall on the banks of the Elbe river, just outside the German port city of Hamburg. Its planning and construction were drawn out amid fierce opposition. According to Clean Energy Wire, a local newspaper marked its first day of operations with the headline “Greetings From the Stone Age.”

Now its next milestone could be as one of the first 100-megawatt scale green hydrogen sites in Europe.

The plans were revealed last week, with Shell, Mitsubishi Heavy Industries and municipal heat provider Wärme Hamburg joining Vattenfall.

With a generation capacity of nearly 1.6 gigawatts, the hard coal plant will likely prove to be one of the final five new coal plants built in Western Europe, according to data from Beyond Coal. Vattenfall acknowledged last year that the plant was not economically viable and would be closed down in 2021.

Swedish state-owned Vattenfall is aiming to close all its remaining fossil-fuel generation by 2030. The approval of Germany’s €45 billion coal phaseout plan cleared the path for a December tender that will compensate firms for the closure of 4,788 megawatts of capacity at a cost to the government of €317 million ($385 million).

Vattenfall, RWE and Uniper were the big winners. This was the first of Germany’s hard coal phaseout tenders — a reverse auction with bidders naming the price per megawatt of capacity they would close. The results are then skewed to make sure the most carbon-intensive electricity production is targeted first. That process ultimately yielded an average bid of €60,000 ($72,878) per MW closed.

Moorburg’s green hydrogen future

The initial plan is to establish a 100 MW electrolyzer powered by wind and solar, with green hydrogen production starting around 2025. All of this would be subject to planning and financing requirements. The project is also applying for funds from the Important Projects of Common European Interest initiative.

Potential green hydrogen projects are springing up around Europe and competing for the same public funding. But Moorburg does have some advantages.

A lot of the fundamentals that drew Vattenfall to the site remain, such as port access via the river. The plant is connected to the national transmission network, the distribution system, the gas grid and the district heating network.

Also working in the project's favor is the range of offtakers already attached, with steel giant ArcelorMittal lined up.

“One of the key starting points was the commitment of the steel mill,” Emmanouil Kakaras, senior vice president and head of innovation and new products at Mitsubishi Power Europe, said in an interview. “It's a building block to create the business case for the demand,” he said, describing it as “baseload demand.”

Hamburg’s industrial center offers a host of other potential customers, as does a hydrogen bus trial in Hamburg if it's expanded. The local gas network is already working toward developing a hydrogen pipeline connecting the port and the city this decade.

Kakaras said Wärme Hamburg won’t immediately be a hydrogen offtaker, but he added that the partnership will be beneficial. By utilizing excess heat from the Wärme Hamburg, which is already connected to the site via the existing combined-heat-and-power plant, the electrolysis rate of reaction can be improved.

“It considerably improves the business case of the production. So given the specificities of green hydrogen, we have a relatively attractive business case configuration,” he said.

The presence of the port also means provides the site access to other hydrogen carriers, such as ammonia, that could be transported to the site.

Demand is king for green hydrogen

Green hydrogen certainly has plenty of remaining skeptics. Energy veterans will have seen one hydrogen hype cycle come and go.

But the drive toward decarbonization, which hydrogen enables, means things are very different this time around, Kakaras said.

“In the early 2000s, we were calling it the internet of energy. It never happened," he said. "The decentralized part is the transport side. The real business is starting with the central supply generation and distribution to major customers." 

To ensure things get off to a strong start, the first wave of projects, which will benefit from public subsidy, need to be chosen carefully, he warned.

“They will create an example and [provide] the lessons for replication and the rollout of this technology,” he said.

If everything goes to plan, Kakaras expects the journey for green hydrogen to scale from dependence on public funding to commercial independence to be shorter than that of solar PV.

In Europe, the EU has a 40 GW electrolyzer target for 2030. If the only sectors using green hydrogen come from existing hydrogen users, such as the fertilizer industry, then we’re headed for an oversupply situation.

Ben Gallagher is a senior analyst at Wood Mackenzie and the author of the company’s new report, The Hydrogen Possibility. He considers demand to be a major challenge for the sector.

“As of now...on the production side, there's enough support from these targets and from this money available for deployments,” Gallagher said in an interview. “Cost will probably be able to fall fast enough, due to what's happened with wind, solar and lithium-ion [batteries]. But the demand for the electrons they produce was already rather well established," he noted. 

“It's the question of [whether] these sectors that have not consumed it before will be able to accept low-carbon hydrogen,” he added.

With that “baseload demand” already secured and infrastructure on the way for access to several sources of demand, Moorburg could well enter its second epoch less than 10 years after opening. Greetings from the hydrogen age.