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.

For more information please contact media@frontier-economics.com, or call +44 (0)20 7031 7000.