July 25, 2022 • Paul Rodden • Season: 2022 • Episode: 133
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In episode 133, The US Congress talks hydrogen blending. Hydrogen is now cheaper in Europe than natural gas. And Toyota has a big announcement for light duty trucks. All this on today's hydrogen podcast.
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The US Congress talks hydrogen blending. Hydrogen is now cheaper in Europe than natural gas. And Toyota has a big announcement for light duty trucks. All 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.
In an article from PV magazine.com Sergio Mata Lucci writes, gas prices are higher than levelized cost of hydrogen for several technologies in Europe. Natural gas prices are currently higher than the levelized cost of hydrogen using alkaline electrolyzer technology on an energy equivalent basis in the UK, Sweden, Italy, Spain, France, Poland and Germany. This according to the data provided by Bloomberg Nef to PV magazine. That being said the same does not hold for China, the US and the United Arab Emirates, where gas prices are significantly lower. The analyst found cheapest hydrogen and the European Union could be produced in Sweden and Italy, while Germany and Poland would have the highest levelized cost of production. According to Bloomberg Nef, Meredith Annex, this reflects the comparably better renewable resources in southern Europe. And according to Bloomberg NEF modeling, onshore wind is the cheapest source of electricity to power electrolyzers in all European countries. By contrast, solar is the cheapest source and Turkey in the United Arab Emirates. Chinese alkaline electrolyzers are currently the cheapest equipment for making green hydrogen in the market and would allow hydrogen projects to compete the most effectively with current natural gas prices. proton exchange membrane equipment is more expensive, adding a price premium of 11 to 17%. Compared to Western alkaline technology, now using PEM to produce hydrogen would make clean fuel less competitive with current natural gas prices in Europe.
This is again according to Annex, explaining that European gas prices will likely fall again later this decade, making green hydrogen less competitive on an energy equivalent price basis. She ends by saying yet industrial players may see higher demand for green hydrogen as a hedge against future gas market volatility. Okay, so some quick information but some good information on hydrogen becoming competitive price wise in Europe. And that's really not a surprise since Europe is paying roughly six to seven times more for natural gas than we are here in the United States. But I think there are two critical things in this article that need to be looked at more in depth. The first is that this is a levelized cost of hydrogen, but specifically looking at alkaline electrolyzer technology. That means that the cost they're looking at is green hydrogen, which in this case makes it appropriate to not include blue hydrogen, as its feedstock price makes it extremely cost prohibitive. The other point that I want to highlight in this article, and was highlighted at the end by Meredith Annex, is that industrial players may still see higher demand for green hydrogen as a hedge against future gas market volatility. Now, I've
talked about this previously in the past, and it holds true more now than ever before. And that is when dealing with hydrocarbons in this mixture, you do have to incorporate some price volatility, and that increases your risk. And so because of that, I'm really glad to see that there are some market analysts that are beginning to incorporate that risk into their hydrogen market analysis. Next, in an article from the Houston chronicle.com James Osbourne writes, Congress explores possibility of moving hydrogen through existing gas pipelines. He writes, Congress is examining whether the nation's existing natural gas pipeline system should be used to move hydrogen enabling its use as a transportation fuel. At a Senate hearing this week, lawmakers questioned representatives from the energy sector on the feasibility of blending hydrogen with natural gas and whether the government needs to establish a regulatory scheme to allow them to do so. An executive from Oklahoma based Williams said there interstate pipelines that could safely move a mixture of gas and up to 20% hydrogen and a quote from Chad Zamarin, a Senior Vice President at Williams, we have an opportunity to scale up a hydrogen economy with the technology that already exists today in our infrastructure. Now both oil and clean energy companies are already moving to expand hydrogen energy into the transportation sector. with Houston and its abundant supplies of cheap natural gas viewed as a potential hub for the industry, natural gas pipelines would offer the nascent sector a vast infrastructure through which to move the product.
All the hydrogen currently produced worldwide would only take up 10% of just one of Williams existing gas pipelines. This according again to Zamarin. Congress is eager to see hydrogen expanded beyond its existing market in the industrial sector. Senator Joe Manchin, chairman of the Senate Energy and Natural Resources Committee said shifting to hydrogen as a transportation fuel could not only help slashed the carbon emissions of the US energy sector, but also boost America economically. He said we have a lot of work to do to make our hydrogen goals a reality. We must accelerate these efforts. Now hydrogen is a small market today with US demand of 11 million metric tons a year compared to oil demand of almost a billion metric tons per year. But if the trucking industry and other heavy duty transport were to switch to hydrogen fuel from diesel, that number would increase many fold. Already several US pipeline companies are running pilot projects to see what if any effects blending hydrogen has on their systems. This is according to Frank Wolak, president of fuel cell and hydrogen Energy Association, which is a trade group. He said we're happy these conversations are starting. Let's set up some rules now. So when people want to start injecting hydrogen into their pipelines, we're ready to go. Okay, so really good news that these conversations have finally started happening, and the conversations that absolutely have to be had before the hydrogen industry can really take off in the United States. regulations have to be established and standards must be identified before the hydrogen industry can be solidified here in the US.
And lastly, on a press release on July 19, Isuzu motors limited Toyota Motor Corporation, Hino Motors limited and commercial Japan partnership Technologies Corporation announced they would jointly plan and develop light duty fuel cell electric trucks for the mass market. The joint initiative is expected to contribute to the realization of a hydrogen society as well as a carbon neutrality by expanding the options available for customer use and increasing the demand for hydrogen. The companies will also promote the introduction of FC electric trucks to the market along with their widespread use. On the road to carbon neutrality. There are various powertrain options that meet customers demands, including ATVs, BEVs, and FC EVs or fuel cell electric vehicles, relying on the energy conditions in different countries and regions, and how customers use their vehicles. Light Duty trucks are often used for distribution in supermarkets and convenience stores that support people's daily lives. In addition to being equipped with refrigeration and freezing functions, they're required to drive long distances over extended hours to perform multiple delivery operations in one day. They must also meet requirements such as fast refueling capability. The use of fuel cell technology which runs on a high energy density hydrogen, and has zero co2 emissions while driving is considered effective under such operating conditions.
CJPT, or the commercial Japan partnership Technologies Corporation will be responsible for planning the jointly developed mass market light duty FC electric trucks, the four companies will mobilize their combined knowledge the truck technology that Isuzu and Hino have accumulated over the years, as well as Toyotas FC technology in pursuit of products that meet the performance and conditions required for these light duty trucks. It will be introduced to the market after January of 2023 and used by the partners at actual distribution sites in Fukushima Prefecture and Toyota social implementation projects. In this way, the companies will promote sustainable and practical initiatives toward the widespread use of light duty fuel cell electric trucks and hydrogen while also responding to customers needs at a high level. Okay, so an interesting announcement on a joint venture between Hino Isuzu and Toyota. And so if we pull back and we look at the global implications of this announcement, we know that these vehicles will be a well built and manufactured. We also know that there are plenty of agreements currently established to deliver hydrogen to Japan to fit this market. I also wouldn't be surprised to see in 2020 for these trucks being offered to the European market as the hydrogen market there continues to gain ground.
All right, that's it for me everyone. If you have a second I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple, podcasts, Spotify, Google Whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you're welcome to email me directly at firstname.lastname@example.org. And as always, take care. Stay safe. I'll talk to you later.
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