Earlier this month, Frontier Economics published a study, on behalf of Uniper Benelux.
The study looked at the economics of converting Uniper’s MPP3 coal fired power plant to alternative fuels in order to continue operating after 2030. As a follow-up to this study, we have analysed the economic viability of converting Uniper’s MPP3 coal power plant in the Netherlands into a combined biomass-hydrogen or 100% biomass plant in 2030.
Our first study conducted for Uniper Benelux showed that converting MPP3 to a 100% biomass plant is not economically viable. Our latest study also assesses the option to use “blue hydrogen” as additional fuel. “Blue hydrogen” is a carbon-free fuel produced from natural gas via a steam reforming process. The CO2 from the process is captured and stored in a depleted gas field.
Our analysis is based on an updated market framework and takes into account recent developments on commodity and CO2 market as well as in energy policy, for example the planned phase-out of coal in Germany by 2038. Our study concludes that, even with the additional option to use blue hydrogen, this investment into the combined hydrogen-biomass plant would lead to a negative return on investment of ca. 250 mn. .
Frontier Economics regularly advises clients on climate policy, the economics of fuel conversion and valuation of energy assets and investments.
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