Investment firm Copenhagen Infrastructure Partners (CIP) and Friesen Elektra Green Energy AG plan to develop a 400-MW renewable hydrogen production plant at Sande, Germany, with plans to expand to 800 MW, CIP said Jan. 15.

The Anker electrolyzer project near Wilhelmshaven in the Lower Saxony region could produce 80,000 metric tons per year of green hydrogen, powered by renewable electricity from the grid.

“We continue to see a large potential in green hydrogen despite slower than expected market development and we remain committed to investments in large-scale renewable infrastructure solutions to decarbonize energy-intensive industries,” CIP partner Felix Pahl said.

The hydrogen will supply the chemical and steel industries as well as the transport sector.

CIP said the project could cut CO2 emissions by 2.4 million metric tons per year by substituting fossil fuels with green hydrogen.

Anker is close to the planned German hydrogen pipeline network. The first 525 km of the planned grid is due to be completed in 2025, largely through repurposed natural gas pipelines.

Through the partnership, CIP will invest in Friesen Elektra’s Hydrogen Park Friesland. The site has a connection to several high-voltage power lines, Friesen Elektra said on its website.

The partners are eyeing hydrogen demand in the chemical industry in the Ruhr region, steel production at Salzgitter and copper smelting at Hamburg, among other potential offtakers. There are also salt caverns nearby that could be used to store hydrogen.

Platts, part of S&P Global Commodity Insights, assessed the cost of green hydrogen production via alkaline electrolysis in Germany, backed by renewable power purchase agreements, at €9.82 per kilogram on Jan. 14, down from a peak of over €14.50 per kilogram in mid-December.

The assessment reflects one possible pathway for producing EU Renewable Energy Directive-compliant green hydrogen.