April 18, 2022 • Paul Rodden • Season: 2022 • Episode: 108
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In episode 108, A new announcement in northwest England could bring big changes to hydrogen offtaker agreements globally. I'll discuss this on today's hydrogen podcast.
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A new announcement in northwest England could bring big changes to hydrogen offtaker agreements globally. I'll discuss this on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen and this podcast will give you the answers. My name is Paul Rodden and welcome to the hydrogen podcast.
An article from businessgreen.com Cecilia Keating writes, Kellogg's Kraft Heinz Jaguar Land Rover and PepsiCo Inc deals for blue hydrogen from HyNet cluster. UK production of Monster Munch crisps, Heinz baked beans Rice Krispies cereal and Land Rover Discovery cars could be powered by low carbon hydrogen in the near future. After a flurry of manufacturing companies in the northwest of England and north Wales announced agreements for the versatile energy source produced at the proposed HyNet industrial decarbonisation cluster. The HyNet Northwest coalition today said it had signed an early agreement with 28 companies across the UK food drink consumer goods metals, paper, cars, glass and chemicals industries to provide blue hydrogen produced at the cluster in order to help the manufacturers reduce the reliance on hydrocarbon gas.
Among the organizations confirmed to have signed memorandum of understandings with HyNet over the last 10 months include Kellogg's, which is aiming to reduce the emissions of its cereal manufacturing facilities in Manchester and Wrexham and PepsiCo, which is eyeing the decarbonisation of operations at skelmersdale factory, which produces walkers, crisps, and Monster Munch. HyNet which was selected by the UK government last year as one of two priority industrial decarbonisation projects is planning to produce low carbon or blue hydrogen from the mid 2020s as part of plans to reduce emissions generated by the UK largest manufacturing region by 10 million tonnes. The cluster of companies aim to produce the hydrogen using SMR powered by natural gas power plants fitted with carbon capture and storage technology to mitigate the vast majority of emissions generated through the process.
Other manufacturers have signed as interested off takers for the blue hydrogen produced at the site include Kraft Heinz, which operates Europe's largest food processing facility in Wigan, and Novelis, owner of the continents largest aluminum can recycling plants and Werrington glass bottle manufacture insert glass manufacturer Pilkington glass and auto company Jaguar Land Rover and consumer goods company essity have also signed a memorandum of understanding with HyNet this according to the coalition HyNet project director David Parkin said the slew of deals was evidence of high demand for low carbon hydrogen that could help emissions intensive businesses decarbonize their operations. He says we are receiving a high level of interest from businesses who want to use it to rapidly cut their carbon dioxide emissions, helping the UK journey to net zero and to manufacture low carbon products driving value for businesses and its customers.
Parkin noted that the hydrogen produced by Vertex hydrogen recently formed a joint venture between HyNet partners SR oil and Progressive Energy could be stored to manage demand on an increasingly renewables dominated grid, as well as helping support the decarbonisation of local industry. He continues saying, as renewable electricity generation expands, high net infrastructure can also increasingly be used to create transport and store hydrogen made from renewable electricity. In the meantime, we must decarbonize the natural gas that industry relies on today using UK technology, including carbon capture and storage to reduce low carbon hydrogen. government backed trials by the HyNet scheme over the last year has seen the fuel used successfully to fire furnaces used to make Unilever household goods and sheet glass made by Pilkington UK. Okay, so a great article discussing some big news coming out of the UK as more investors are coming into the hydrogen scene, in this case, industries that previously weren't really thought of as hydrogen utilizers. Now coming on, not just as investors but also off takers.
Now, we have seen other companies other industries do something similar like this, but never something this big at this kind of scale. And when I say scale, I mean this is a big scale investment. 28 different companies across food, drink consumer goods, metals, paper, cars, glass, chemical industries, these are all Lots of different companies investing in, in this case, blue hydrogen to start supplanting their reliance on hydrocarbons. But what I really like about this is the beauty and simplicity that's put around it, we can still use hydrocarbons to develop the hydrogen, capture and sequester the co2 And for their other energy needs, they can still rely on the renewable grid to provide that energy. And really, one of the things that I like about this article, and this news is that there are no new industries that were really never thought of as utilizers of hydrogen coming into the fold.
This including food, good manufacturing. And something that I'm hoping happens is that in the US, and other similar countries can take note of what's going on there and start building up these relationships between hydrogen generating companies, large industrial investors, and then to that end, large industrial off takers. But now just to dive in a little bit more into the type of hydrogen that's being produced here. Why so much in this article are they talking about Blue hydrogen? Well, that's what HyNet is, at least for right now. It's a purpose built plant designed to take hydrocarbons and convert that into hydrogen with co2 capture and sequestration. But ultimately, it won't matter in the end where the hydrogen comes from.
But in looking at the broader overall scope of these investments, and the high net setup, you really start to get the image that they're taking the future into account when talking about this project, such as utilizing renewable electricity to generate the hydrogen, but also continuing to develop hydrogen in this manner. When renewable electricity is in its off peak time. Now, one of the partners that was announced that I am really excited about is the Jaguar Land Rover investment, and that they have announced a fuel cell vehicle to come out later. And now regardless of what model gets developed, it really doesn't matter. The fact is, now Land Rover has a straight source for their hydrogen, not just for vehicle development, but also testing and manufacturing processes that go into it. And now lastly, just to dive a little bit in to what HyNet is. Now HyNet is a hydrogen hub that's been set up between Liverpool and Chester.
And when I say hub, I mean, this is a legitimate hub, the hub is set to launch in the mid 2020s. HyNet will produce store and distribute low carbon, hydrogen, as well as capture sequester co2 emissions. And now HyNet is estimating that by 2030, they're going to be reducing co2 emissions by 10 million tons a year. And so with that being said, any investor and off taker in this situation will also benefit from those co2 drawbacks. And so now, with all the energy issues that have been going on in the UK, this area in the northwest of England has been one of the biggest to feel the sting. And so now with this low carbon energy opportunity being made available to all of this industry, they now have a new low carbon sustainable energy source well into the future.
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