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The road to a sustainable future paved with green hydrogen?

The road to a sustainable future paved with green hydrogen?

 

Noise across the energy sector is growing with regards to hydrogen – particularly ‘green’ hydrogen. It is an, as yet, widely untapped market that seems to provide enormous potential for the global journey to net-zero. But how do we get there and what role might green hydrogen have to play?

Matthew Knight is one of several individuals and companies keen to help shape the future of hydrogen in the UK and abroad. He is the Head of Market Development at Siemens Energy – a new enterprise that spun out from Siemens AG last year – and he is tasked with supporting the company’s energy transition.

He has more than 30 years’ experience in the energy market, having been involved with electricity grid projects, the establishment of offshore wind farms and, more recently, he has been focused on developing the potential of green (and blue) hydrogen. He is also on the Government’s Carbon Capture and Storage Taskforce and Hydrogen Expert Group, engaging with Government as an industry representative to help shape sector regulations and support. 

Matthew is passionate about the need for eminent and significant development of the industry, dramatically increasing production capacity and doing so relatively quickly. He says:

“Hydrogen is only worth doing if done at scale. We don’t have time to mess around with something that won’t make a tangible contribution to saving the planet. It will take 30 years to deploy hydrogen at the scale needed to replace the fossil fuel system, so we need to start making real progress now.

“Our current electrolysers use 17.5MW of electricity to make eight tonnes of hydrogen per day, but we need to be working towards 50MW in the next two to three years and 100MW in the next five. This would help the industry fulfil its green promises and would need to be followed by consistent deployment of gigawatts in the UK each year throughout the next two decades to play its part in delivering net-zero by 2050.

“We are going to need a lot of hydrogen. Siemens Energy is currently building Europe’s most efficient natural gas fuel power station with SSE Thermal at Keadby in Lincolnshire, which could well be the last new natural gas station built in Britain. To run this on green hydrogen would require 55 tones every hour, which equates to 120 tube trailer loads an hour. Of course, a pipeline supply would be more practical, but this highlights the importance of adapting systems to cater for future needs. 

“We are also developing the capability of our gas turbines to run on hydrogen. Consider the HYFLEXPOWER project, which uses one of the engines we build in Lincoln. As the world’s first integrated power-to-X-to-power hydrogen gas turbine demonstrator, it will run on 100% hydrogen by 2023 – this is the very cutting-edge of the industry. I hope many more world firsts will happen in UK within our industrial clusters as we create and develop a new industry to decarbonise our planet.”

As is true in most walks of life, cost is a challenge in the upscaling of green hydrogen, as Matthew goes on to explain:

“The goal is to reach green hydrogen production costs that rival natural gas. Right now, we can produce green hydrogen for around £5 per kilogram – we need to halve this by 2030. As the cost of green hydrogen comes down, new opportunities for large-scale projects will open up.”

From a technology provider perspective, a massive increase in production capacity for electrolysers is needed, which is already being prepared for. The combination of hydrogen production capacity and costs has created what Matthew calls the “hydrogen conundrum”.

“The hydrogen economy is great once everything is set-up and running,” he says.

“However, there are two challenges to overcome first. One – no one wants to supply hydrogen until there’s a market for it, but no one can buy technology powered by hydrogen until there is a supply. Two – we know that the more projects we do, the more we learn, the better our electrolysers will get and thevcheaper the entire process becomes. Going first comes with risks of being undercut by later projects, but if no one goes first, no one will learn. Cost and operational efficiencies are only developed over time and with experience, so business models must overcome both parts of the conundrum.

“There are some market niches where resistance to hydrogen is lowest. For instance, the value of energy is high in transport as we are used to paying duty on road fuel. Hydrogen can, therefore, be cost competitive in the right conditions, especially where zero emission zones or premiums for high carbon emissions exist. Other sectors expressing a growing interest in green hydrogen include distilleries and breweries, the food and beverage industry, and leisure and tourism.”

The Port of Cromarty Firth recently announced plans for a green hydrogen hub for Scotland’s famous distilleries, supporting their targets for decarbonisation. For food and drink, there is a growing market for greener products, as driven by public demand. Similar circumstances could also increase the need for greater sustainability with regards to travel and leisure activities, further expanding the potential market for green hydrogen. 

Collaboration will be crucial across all relevant sectors for the successful and significant growth of green hydrogen. The Government’s hydrogen strategy, expected later this year, may prove pivotal, offering not just public investment in the sector, but also greater visibility to projects.

Matthew comments:

“We need the Government to help create the market for green hydrogen. Private capital can do a lot, allowing continual investment and boosting competition. The UK Government is working on a market support mechanism that would support the faster growth needed to unlock significant project activity in the UK.

“There is a substantial contrast in the UK’s market approach compared to most other European countries, where projects are largely funded by Government grants. The competitive nature here creates an envelope of secrecy that makes it difficult to assess the market as a whole. Indeed, during recent Government market research, they were pleasantly surprised to be informed of more than 90 projects currently being developed in Britain. More visibility could encourage greater public and investor interest in the sector and ensure that the supply chain is located in areas of greatest demand. Government funding of early 10-30MW scale projects could also provide the initial kick start that the industry needs to flourish.

As any new industry is established, success is not achieved by companies and individuals working in complete isolation. Co-creation between end-customer and supply chain is critical for significant and sustained growth.”

The importance of early projects cannot be overestimated. Matthew believes in leading by example and, as such, has been personally involved with innovative projects that created world-firsts of their own. Just earlier this year, a GeoPura green hydrogen fuel cell unit powered a 100% emission-free, live BBC Winterwatch outside broadcast. This uncovered a new demand for clean, off-grid energy, which the company is now developing and offering solutions for in collaboration with Siemens Energy. One is focused on overcome grid constraints for car park owners and operators by using green hydrogen to power charging stations for electric vehicles. www.geopura.com

In another ‘first’, Siemens Energy showcased the possibility of using ammonia as a hydrogen carrier for easier transport and storage by building a demonstration plant in Oxfordshire. The concept is now being explored around the globe, with huge plans announced for green hydrogen and ammonia plants in Saudi Arabia. In April, Uniper also announced plans to build an ammonia import and cracking facility, which will deliver clean hydrogen in Germany.

Matthew concludes:

“Hydrogen is the future. Siemens Energy is all about the energy transition and, though hydrogen is just one element, it is an important one. Our purpose as an energy technology company is to energise society and support customers with their energy transition to a more sustainable future.

“The time is right for green hydrogen. Countries and businesses are looking to get involved and money is available for investment in good projects. When a viable business model emerges and this investment is released, hydrogen will become unstoppable. It is critical that the UK takes advantage of the small window of opportunity we have to get to the front of the race for upscaling capacity and driving down costs if we are to benefit from the full potential available.”

Read the latest issue of the OGV Energy magazine HERE

Published: 17-02-2022

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