Every so often the market works itself up into the idea that hydrogen is the next big thing. Investments are made, research is performed, and it turns out that hydrogen wasn’t ready for prime time. Is this time different? In the Financial Times, David Sheppard explains why some people think so, writing:
Hydrogen has been billed as a fuel of the future, with oil and gas companies and governments hailing it as the solution to decarbonising parts of the economy that are not easily electrified.
Yet the fuel has experienced previous false dawns, and energy majors backing hydrogen are having to step up their efforts to explain what role they see it playing, and the sectors it could transform.
Equinor, the Norwegian state-backed energy company, which rebranded from Statoil in 2018, is now mapping out a vision for investors that it believes demonstrates the fuel’s wide range of potential uses. They extend from decarbonising the steel industry to powering the ships that underpin world trade, the group says.
Irene Rummelhoff, head of marketing, midstream and processing, says Equinor’s backing of hydrogen is simple logic: as governments commit to net zero targets to curb carbon emissions, clean forms of hydrogen will become economically viable.
“It boils down to policy and political will,” Rummelhoff says. “We expect to see the hydrogen business and carbon capture and storage to kick off after 2030.”
Irene Rummelhoff, Equinor
Irene Rummelhoff, Equinor
Green hydrogen, which is made with renewable power, or blue hydrogen, which is produced using natural gas but with the resulting carbon emissions being captured and stored, will go towards replacing hydrogen that is made using less green methods (see box below).
Royal Dutch Shell, for example, recently launched what is billed as the world’s largest hydrogen electrolyser at one of its German refineries — to be powered by offshore wind — to provide a cleaner source of the fuel.
But while such projects should reduce carbon emissions and test how well green hydrogen can be scaled, some are also targeting wider applications for the fuel, beyond industry.
Already, hydrogen is being used in heavier transportation such as buses, where it is seen as a cheaper alternative to battery power.
“When it comes to decarbonisation of transport, the most difficult thing to change is people,” says Jo Bamford, chair of Wrightbus, which is developing hydrogen-powered double-decker buses in the UK.
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He argues that a bus can be filled up with liquid hydrogen in roughly the same time it takes to fill up with diesel, while battery powered buses require lengthy charging — which is an issue for bus depots close to city centres where land use is at a premium. The cost of hydrogen, Bamford argues, is less of an issue when competing with heavily taxed transport fuels in countries such as the UK.
“The price you need to get to [for transport] is about £6.30 per kilogramme,” he explains. “On the gas grid, it’s more like £2/kg as you’re competing with [untaxed] natural gas. We’re not quite there yet but I think we can get there quite quickly.”
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