PERTH (miningweekly.com) – Green energy company Fortescue Future Metals (FFI) has struck a strategic collaboration agreement with energy infrastructure developer Tree Energy Solutions (TES) to accelerate the development of a world leading green hydrogen and green energy import facility in Germany.
Under the terms of the agreement, FFI subsidiary Netherlands Fortescue Future Industries Holdings will invest €30-million, or $29-million, to become a shareholder in TES, as well as invest €100-million, or $98-million, in the construction of the TES terminal in Wilhelmshaven, Germany.
FFI will become a major shareholder with a 30% stake in TES subsidiary Deutsche Grüngas und Energieversorgung GmbH, the project company that will build the TES Green Energy Hub in Wilhelmshaven.
The first phase of the partnership is to jointly develop and invest in the supply of 300 000 t of green hydrogen with final locations being currently agreed, and a financial investment decision targeted in 2023.
The first delivery of green hydrogen into TES’ terminal in Wilhelmshaven is anticipated to take place in 2026. Initial collaboration projects will be focused on Australia, Europe, the Middle East and Africa.
“This investment supports the delivery of Fortescue’s supply agreement with E.ON, Germany’s largest energy distributor, following our announcement in March this year to supply five-million tonnes of green hydrogen to Germany, with supply commencing from mid-decade,” FFI CEO Mark Hutchinson said.
He pointed out that the new strategic collaboration demonstrated both FFI’s and TES’ commitment to reducing global emissions by accelerating the import and production of green molecules as a lower cost alternative to fossil fuels. FFI joins a group of investors in TES comprised of international financial institutions and multinational energy companies including E.ON, HSBC, UniCredit and Zodiac Maritime.
The collaboration will combine FFI’s market leading expertise in developing large scale renewable energy production, with TES’ unique sustainable business model and access to the European green hydrogen market.
“The UK and Europe urgently need green solutions to replace fossil fuels and this investment will enable Europe to do exactly that. Not in 2050, but in four years from now,” Fortescue executive chairperson Dr Andrew Forrest said.
“From the beginning of FFI, our philosophy was to drive performance across the entire new renewable GH2 value chain while delivering returns to our shareholders. This investment reinforces this commitment and is a significant step forward in FFI’s journey to become one of the world’s largest green energy producers.”
The investment will be funded by FFI’s unutilised capital commitment at the end of June 2022 of $1.1-billion. To reflect this investment, guidance for FFI’s anticipated capital expenditure in the 2023 financial year is revised to $230-million, from $100-million. The guidance for FFI’s anticipated operating expenditure of between $500-million and $600-million is unchanged.
The agreement with TES comes just a day after FFI announced an agreement with Deutsche Bahn (DB) to cooperate on research investigating green hydrogen and ammonia gas fuels in rail applications.
This agreement outlines a proposal for FFI to participate in DB's research and development into a carbon-free internal combustion engine, with the research having the potential to accelerate Fortescue’s Green Fleet rail delivery programme.
The agreement follows a memorandum of understanding signed between FFI and DB, which centres on the companies’ intentions to work together collaboratively on decarbonisation technology opportunities.
“Fortescue is developing green hydrogen and green energy innovations and technology, with a specific focus on decarbonising hard-to-abate industries. We know that cutting edge technology and real-world solutions are key to addressing climate change which is why Fortescue is partnering with Deutsche Bahn, Europe’s leading mobility and logistics provider,” said Forrest.
“Together FFI and DB will work to reduce global emissions given the urgency to find new ways to replace fossil fuels in the transport industry.”
FFI and DB’s partnership builds on Fortescue’s announcement in March to develop the world’s first regenerating battery electric iron-ore train, and prefeasibility studies are progressing, with delivery of the first Infinity Train scheduled to be operational by the end of 2027.
“We want to seize the opportunity to support the decarbonisation of the rail industry through developing multiple technologies,” Forrest said.
“Not every railway around the world will have as favourable topography as we do at our sites in Australia, therefore it makes sense to look at different technologies.”