One of the world’s largest green ammonia projects hit a key milestone in late September. Iverson, a proposed 270MW plant at the port town of Sauda in southwest Norway, secured approval for its zoning plan from the municipal council, potentially keeping it on track for FID and commissioning in 2029.

The project, under development by Germany’s Hy2Gen and Danish infrastructure investment firm Copenhagen Infrastructure Partners, is expected to produce around 200,000t/yr of green ammonia, with storage and loading facilities at the port of Sauda providing its main route to market. The plant’s electrolysers will run on hydropower.

“This is a crucial step forward for the project and the beginning of a new industrial chapter in Sauda,” said Hege Okland, CEO of Iverson eFuels, the joint venture running the project, and managing director of Hy2gen’s Nordic arm.

It is tempting to conclude that Norway, which is located a short hop from northwest Europe’s potential industrial hydrogen demand centres, is quietly establishing itself as a green hydrogen powerhouse by leveraging its vast hydro-power resources. Who needs intermittent solar when you have flexible and relatively cheap hydropower on tap?

The project pipeline bears out this confidence—at least for now. Gulf Energy Information’s Global Energy Infrastructure (GEI) database is tracking more than 40 green hydrogen projects in Norway, although the list includes many smaller pilot-scale projects.

Aside from Iverson, one of the largest projects on the table is the Holmaneset green hydrogen and ammonia plant, which is under development by Australia’s Fortescue. FID on the project is still pending, although construction is still scheduled to start this year, according to the latest updates from Fortescue, which has recently reined its global green hydrogen ambitions, especially in the North American market.

Several Norwegian projects have succeeded in bidding for EU subsidies via recent European Hydrogen Bank auctions. A special category focussed on projects aiming to supply the maritime sector has been dominated by Norwegian bidders.

Most of the projects tracked by GEI are scheduled to come online by 2030, but this timeline looks challenging to say the least.  Doubts over near-term demand for premium-priced green hydrogen and ammonia continue to hinder progress to FID.

Gridlock

At the same time, access to grid connections on an increasingly congested Norwegian power system is another constraint. Multiple green hydrogen projects are in the queue for grid connections, but it is a slow-moving queue.

Norwegian grid operator Statnett recently set out plans to more than double its investments in the system over the next ten years compared with the previous decade, as it struggles with congestion which often causes spot power prices in the north and south of the country to diverge significantly. Norway’s conversion to near 100% electric vehicles highlights the growing demand load on the country’s power system.

However, project cancellations in Norway have so far been limited, and arguably below the global rate of “natural attrition” recently referred to by the IEA, as projects with less than robust business cases start to fall away.

That said, Norwegian generator Statkraft, which operates much of the country’s hydropower capacity, recently said it has stopped new development of green hydrogen projects, citing “high uncertainty”.

Near-term challenges aside, the fundamentals for green hydrogen in Norway look promising—flexible green power, proximity to European demand centres and strong links with the maritime sector. Whether project developers have the patience and resources to wait for demand to emerge, and for power grid constraints to ease, is another question.

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Author: Stuart Penson