ADX Energy has signed a Memorandum of Agreement (MOA) with Windkraft Simonsfeld AG (WKS) through its wholly owned Austrian subsidiary, ADX VIE GmbH, for the provision of green power and the cooperative development of a green hydrogen production and underground storage project in the Vienna Basin (H2 Project).
WKS is a significant wind energy producer in Austria, with plans to generate around 640 million kilowatt hours of electricity in 2022 (equal to the electricity consumption of 160,000 Austrian families) and operate 91 wind farms. WKS operates wind farms in the Vienna Basin adjacent to ADX’s Gaiselberg and Zistersdorf fields.
The northern Vienna basin’s electricity grid system is nearing its capacity. Due to a lack of grid capacity, renewable wind energy from WKS’s neighboring current and new wind farms in Prinzendorf and Poysdorf-Wilfersdorf (areas next to the ADX Vienna Basin fields) cannot consistently achieve 100 percent grid connectivity. This is particularly true during instances of high wind. WKS power output must be partially reduced during certain times, resulting in the loss of clean electricity. The H2 Project will enable wind energy that has been reduced to be used intelligently for green hydrogen synthesis. Wind energy is converted to green hydrogen via an electrolyser and can be temporarily stored in existing underground storage facilities. ADX operates such underground storage near the WKS wind farm at Prinzendorf.
ADX and WKS (“Parties”) have agreed on their respective roles and duties for the development of the H2 Project, which will be integrated into definitive agreements by the target date of 1 December 2021. The following summarizes the Parties’ proposed duties and responsibilities for the H2 Project.
ADX will be responsible for managing, planning, and executing the development of the H2 Project. This will require access to the reservoirs, wells, surface facilities, and infrastructure essential for the storage and transportation of green hydrogen produced. Additionally, ADX will provide project and operations management services for the installation and operation of hydrogen generation (electrolyzer), storage, and transportation facilities, as well as the marketing and sale of green hydrogen.
WKS will be responsible for supplying the H2 Project with power generated from renewable sources (wind or solar) and for providing the infrastructure necessary to provide and deliver Green Electricity to the H2 Project for the generation of green hydrogen.
The Parties have committed to collaborate in order to acquire grants and other forms of financial incentives from the Austrian government and the European Union in order to finance the H2 Project.
The pilot phase and upscaled phase of the H2 Project, as well as the many components of the project, many of which are already in place between ADX and WKS, are depicted in Figure 3.
The project scope includes intermittent pure hydrogen sales directly from the electrolyser, storage of hydrogen in reservoirs and direct sales of stored hydrogen to a single or numerous consumers.
Due to the synergistic combination of WKS’s existing wind energy assets, ADX’s Gaiselberg and Zistersdorf field subsurface reservoirs, production facilities, and gas export infrastructure, all of which are located close to the city of Vienna, the Parties are extremely well positioned to provide a safe, reliable, and long-term supply of green hydrogen via the existing gas pipeline system or via direct delivery. The ADX fields are connected to the local and national methane gas networks for the export of produced gas. Since 1 July 2021, hydrogen can be injected directly into existing methane pipeline systems at concentrations of up to 10%. Additional hydrogen concentration increases are envisaged in the pipeline network, as a significant percentage of the current European gas grids can also be securely supplied with pure hydrogen.
Underground storage at the ADX fields enables the production and storage of hydrogen during periods of reduced or non-existent demand for Green Electricity. Additionally, the large-scale energy storage technology enables intermittent hydrogen production from wind energy to be stored and sold on a steady, long-term, and uninterrupted supply basis. For industrial use and power generation, a stable, non-interruptible energy supply in massive quantities that considerably exceeds present battery storage capacity is critical.
The Parties’ participation, as anticipated by the MOA, permits the immediate technical and economic definition of the H2 Project with the objective of capturing recognized near-term hydrogen markets. The assurance of obtaining green electricity and developing the project in collaboration with a leading green energy provider such as WKS considerably boosts the likelihood of a speedy project formation.
ADX Executive Chairman, Mr Ian Tchacos, said, “The Board of ADX is very encouraged by the progress being made by our Austrian management team on the H2 Project. They have delivered an important strategic relationship with Windkraft Simonsfeld AG (“WKS”) which is a leading green energy producer and operator. WKS has an exceptional environmental and community engagement track record in the Vienna basin where ADX also produces safe, long life, low emissions oil and gas. The supply of currently curtailed green electricity to the H2 Project by WKS and their potential involvement in the project provides strong alignment between the Parties and significantly enhances the certainty of H2 Project formation at a rapid pace. We look forward to working with WKS to capture existing and emerging hydrogen market opportunities by repurposing our assets for a long green energy production future.”