Shell New Energies and RWE’s generation unit plan to team up for green hydrogen and other decarbonisation projects in the UK, Germany and the Netherlands.

RWE chief executive Markus Krebber and Shell’s director of integrated gas, renewables and energy solutions, Wael Sawan, signed a memorandum of understanding (MoU) at the oil supermajor’s Energy and Chemicals Park Rheinland near Cologne to jointly advance projects for the production, use and distribution of green hydrogen, as well as options to decarbonise RWE gas and biomass-fired plants.

The two companies are already cooperating in two of Europe’s biggest green hydrogen projects, the NortH2 plan in the Netherlands and AquaVentus in Germany. Both giant projects aim to eventually use up to 10GW of offshore wind power from the North Sea to produce green hydrogen.

"Effective climate action needs cross-sector and cross-national cooperation. In our cooperation with Shell, we want to develop solutions that combine new approaches with proven technologies and, above all, can be applied quickly and on a large scale,” Krebber said.

“We will also contribute our special expertise in the development of offshore wind projects as well as the provision of energy in the form of electricity, heat and, in the future, green hydrogen for our customers."

The utility and the oil supermajor also intend to examine the use of hydrogen from offshore wind in industrial regions in northeastern England (such as Teesside and/or Humberside), assess the future development of electrolysis plants for the production of green H2 and consider locations which have potential pipeline capacity for hydrogen yet are currently difficult to connect to the electric grid.

Shell and RWE want to investigate whether and how hydrogen could be transported from such locations via dedicated pipelines.

The two companies also want to develop green H2 solutions for industrial customers focused on the site near Cologne or Shell sites in Rotterdam and Moerdijk in the Netherlands, as well as evaluate the possible use of green hydrogen in the mobility sector.

Shell and RWE will further examine the use of blue hydrogen (made from fossil gas) in RWE’s gas-fired power plants in Wales, Germany and the Netherlands. Shell would produce and supply the hydrogen as well as capture and store the CO2.

"Both companies are of the opinion that progress towards net-zero emissions needs government policy to support the energy transition and our customers' needs for low-carbon energy solutions," Sawan said.

"It makes sense for us to evaluate the potential of joint decarbonisation projects and make the best of the global energy experience both companies bring to the table."

Profits up, renewables down

RWE meanwhile reported rising profits during the first nine months of this year despite adverse weather conditions that pushed down both the results of its offshore wind and its onshore wind and solar units.

The utility’s offshore wind segment posted adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of €656m ($752m) in the first three quarters of 2021, compared to €738m in the year-earlier period, amid lower winds in Northern and Central Europe.

Adjusted Ebitda in onshore wind and solar plunged to €36m from €373m during the first nine months of 2020, mostly due to an extreme cold snap in Texas early this year which reduced earnings by some €400m due to forward power supply contracts.

RWE’s supply & trading segment, however, posted an adjusted Ebitda of €609m during the period, up from €399m a year earlier, due to successful energy hedging strategies. The company also had significant gains in its coal and nuclear segment amid high wholesale power margins this year due to the gas price hike.

That pushed adjusted net income up to €1.03bn in the first nine months of 2021, up from €794m in the year-ago period.

“Despite weather-related impacts, we achieved a better result for the first three quarters than in the same period last year. That’s mainly thanks to the outstanding performance of supply & trading,” RWE chief financial officer Michael Müller said.

“Our portfolio capacity is growing fast, 3.8GW of wind power and solar plants as well as storage facilities are currently under construction. That will easily take us to our target of more than 13GW by 2022.”

The utility in its guidance sees earnings in its renewables units recover next year, and expects adjusted net income in 2022 to reach €1.05-1.4bn for the entire group.