The State Of Play With Green Hydrogen
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<p style="text-align: justify;"><span data-contrast="none">I am often asked my opinion on where the world sits concerning green hydrogen. The answer is akin to the curate’s egg. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">There has been solid progress, but I wonder if we are where we must be to achieve net zero by 2050. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Why? </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">It depends on where you sit. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><div class="hHq9Z" style="text-align: justify;"><div data-hveid="CAkQAA"><div class="gyEfO"><div class="wDYxhc NFQFxe viOShc LKPcQc" data-md="221" data-hveid="CAoQAA" data-ved="2ahUKEwi-vICu7bD_AhXPXmwGHWoEAXAQnKEBegQIChAA"><div class="ZxoDOe yGdMVd UoezFf"><div class="UFE1qd"><h2 class="PyJv1b gsmt PZPZlf qRofMd" data-attrid="title" data-hveid="CAoQAQ"><span style="font-size: 14pt;">Challenges in the Progress of Green Hydrogen </span></h2></div></div></div></div></div></div><p style="text-align: justify;"> </p><p style="text-align: justify;"><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"><strong>Technology</strong> </span></p><p style="text-align: justify;"><span data-contrast="none">The renewable energy folks are no doubt frustrated as the prospective hydrolyzer manufacturers (and, more so, the powerful integrators which include most industrial gas MNCs plus others) fight for ascendency with their various technologies (old school alkaline versus new(ish) kid on the block PEM and the odd fast ball such as solid-state). </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"><strong><span data-contrast="none">Investments</span></strong><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Those who wish to invest are also frustrated that the off-takers are also deliberating on the means of best pushing the green hydrogen into the various market sectors at an acceptable rate. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Then, there is the issue of the off-takers - where are they located? </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Of course, the energy-deficient countries of North Asia (Japan, South Korea) are at the forefront of the off-taker queue. However, despite substantial ongoing efforts to stimulate demand, the latter is yet to materialize to a level that would justify massive investment in geographies with the potential for abundant renewable energy. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">The latter tends to include sovereign states with high levels of sunshine, cheap land, low levels of industrialization and population density, and long coastlines. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">The debate itself has hindered progress to scaling up on the manufacturing side - it is happening, but risk aversion has clearly offered impedance. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Putting aside the emboldened and frequently misleading corporate communication statements (they often talk about FEED level approvals and not true FID), it is encouraging to see green hydrogen projects breaking ground at the 20-100 MW level in several parts of the globe.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"><span style="font-size: 12pt;"><strong>Mobility </strong> </span></p><p style="text-align: justify;"><span data-contrast="none">The final quandary is about the green hydrogen itself. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Mobility and specific technology shifts, such as direct reduction in steel making, and oxidative hydrogenation in ethylene cracking, all have their place, and rightly so, but they are not yet at the level where energy export via green hydrogen is fully justified. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">The very question of export is interesting too - do you liquefy, use a LOHC system or convert to ammonia (often predicated by the ability to rededicate shipping and storage capacity)?</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Green Hydrogen Projects </span></h2><p style="text-align: justify;"><span data-contrast="none">I am pleased to see green hydrogen projects are happening in the Middle East and the Gulf Coast, that have blue ammonia as an output. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">This may encourage detractors to realize that green ammonia is the way forward. It requires green hydrogen as the principal feedstock and can be synthesized using the Haber-Bosch process and nitrogen powered by renewable sources. </span></p><p style="text-align: justify;"><span data-contrast="none">The world has known anhydrous ammonia for over a century - only a few countries (those with space programmes in the main) have had exposure to liquid hydrogen, which remains a scaling challenge. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Some are pushing the pace. While some wait for technological breakthroughs such as hydrogen as an ICE fuel or green ammonia being applied directly to fuel cells, others say, let's cut green hydrogen as a means of exporting energy and stick with sending out renewable electrons. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Then some wish to combine green hydrogen with recycled carbon to produce myriad downstream hydrocarbons.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> <br /><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/gbrucerobinson/" target="_blank" rel="noopener">Bruce Robinson</a></em></span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Bruce Robinson</span></h3><h3 style="text-align: justify;"> </h3><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. What are the key factors influencing investment decisions in green hydrogen projects, and what is the outlook for future investment in this area?</span></h2><p style="text-align: justify;"><span data-contrast="none">The economics have undoubtedly improved (and will continue to do so), but many of the larger concepts still need to make it through to FID, even with some form of government subsidy. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Most investors are satisfied that the renewable energy piece is in a good place, and the hydrolysis piece is getting plenty of upscaling attention. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">The brake seems to be in the end markets - mobility per se just about moves the needle, but hydrogen-fed power stations and the like are needed to get things to acceptable volumes.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. How can green hydrogen projects be integrated into existing energy infrastructure and systems?</span> </h2><p style="text-align: justify;"><span data-contrast="none">It is common to see green hydrogen being fed into reticulated natural gas pipelines, displacing the natural gas. </span></p><p style="text-align: justify;"><span data-contrast="none">As the latter is principally methane, this is a form of decarbonization, but methane has one carbon atom per molecule, so it is not of high carbon intensity. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Many countries are limiting the amount of hydrogen injection to around 20%, and some critics say this is not the best use of clean fuel.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. What strategies are energy-deficient countries employing to stimulate demand and create markets for green hydrogen?</span></h2><p style="text-align: justify;"><span data-contrast="none">Most countries are targeting mobility as the first step - it is a good way of admitting hydrogen into an economy and ensuring the necessary supporting codes and standards are in place. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Of course, this strategy requires car manufacturers to build vehicles that can run fuel cells on hydrogen feed. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Australia, although not energy deficient, has several large private companies committed to converting their fleets to motors driven by power generated in hydrogen-fed fuel cells.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;">4. How are digital technologies, such as artificial intelligence or machine learning, being applied to optimize the operation and performance of green hydrogen projects?</span></h2><p style="text-align: justify;"><span data-contrast="none">I don’t see the green hydrogen space being any different from other ‘new’ spaces, AI is here to stay and will doubtless be part of deploying the green hydrogen plants as they are rolled out. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Machine learning and smart diagnostics have been around for some time already!</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;">5. How are off-takers collaborating with green hydrogen project developers and other stakeholders to create a supportive ecosystem for the growth of green hydrogen adoption?</span></h2><p style="text-align: justify;"><span data-contrast="none">Just how the key stakeholders in a green hydrogen project come together as a constellation is critical. Suppose the renewable energy piece is to be dedicated to the green hydrogen scheme, the entity providing that needs to be factored in as a key player. </span><span data-contrast="none">The industrial gas giants can deliver (and operate) the hydrogen station complete with storage plus subsequent conversion to green ammonia and its storage. </span><span data-contrast="none">Who delivers and operates the terminal is a key question. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Finally, do the off-takes want some skin in the game, or are they happy to be on the outer but be locked in by long-term supply contracts? </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">There is commercial risk and how that risk is shared, and, indeed, how the overall project is funded, and the relative ownership of the project are all issues to be addressed in the collaboration arrangements.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p>
KR Expert - Bruce Robinson
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