November 03, 2022 • Paul Rodden • Season: 2022 • Episode: 160
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In episode 160, Duke Energy leads a massive collaboration for a hydrogen hub in the southeastern United States. And Kazakhstan goes big on green hydrogen, all of this on today's hydrogen podcast.
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Duke Energy leads a massive collaboration for a hydrogen hub in the southeastern United States. And Kazakhstan goes big on green hydrogen, all of 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 a press release on November 1 Major Southeast utilities establish hydrogen hub Coalition, a newly formed coalition including major utility companies Dominion energy, Duke Energy, Louisville Gas and Electric Company and Kentucky Utilities company, Southern Company and the Tennessee Valley Authority, along with Battelle and others, announced on November 1, its plan to pursue federal financial support for a southeast hydrogen hub. The coalition will respond to the recently announced a funding opportunity from the US Department of Energy which includes $8 billion for regional hydrogen hubs, and is part of the infrastructure investment and jobs act. One of the members of the southeast hydrogen hub coalition will include a growing list of hydrogen users from a variety of industries in Alabama, Georgia, Kentucky, North Carolina, South Carolina and Tennessee.
The coalition expects its membership to grow as news of the opportunities spreads, and as interest in hydrogen intensifies. A hydrogen hub in the southeastern US is expected to bring robust economic development benefits to the region. And hydrogen is attractive as an energy resource because it has immediate potential to accelerate decarbonisation in the southeast and across all sectors of the US economy, including transportation, which generates the largest share of greenhouse gas emissions in the country. Hydrogen also is a dispatchable energy source, meaning it can be turned on or off as needed, enabling power companies to add more intermittent renewable resources to the energy system. Hydrogen may be poised to play a major role in addressing climate change, and could be essential for each coalition member to meet its stated carbon reduction goals. For Dominion energy. That means achieving net zero greenhouse gas emissions across scopes, one two and three for all electric and natural gas operations by 2050.
And for Duke Energy, that means achieving net zero carbon emissions from electricity generation by 2050. The company has interim carbon emission targets of at least 50% reduction from electric generation by 2030 and 80% reduction by 2040, Lewisville Gas and Electric Company and Kentucky Utilities company, along with parent company ppl LG and E and KU has a set goal to achieve net zero carbon emissions by 2050. With interim reduction targets of 70% from 2010 levels by 2035 and 80%. By 2040. Southern Company is looking to achieve net zero greenhouse gas emissions across electric and natural gas operations by 2050. And TVA is looking to achieve 70% carbon reduction by 2030 and approximately 80% carbon reduction by 2035. They're also aspiring to net zero by 2050. Now by working together, the coalition can focus on developing scalable integrated projects at key locations across the entire southeast in support of these carbon reduction goals and encourage the broad based development of a regional energy ecosystem that will allow members to deploy hydrogen as a decarbonisation solution for customers and communities.
Okay, so we've talked quite a bit in the past about hydrogen hubs starting up in Appalachia, Texas, Louisiana, even up north in North Dakota, this is the first real opportunity we've seen start to form in the southeastern part of the United States. Now really, it seems like this coalition is being led by Dominion energy and Duke Energy, both massive companies when it comes to power distribution, and the United States. And so when it comes to delivering energy to clients and customers, these two companies know how to do it and do it the best. What this press release doesn't say is where the hydrogen is going to come from. Now, with that being said, Duke Energy does have nuclear plants in the Carolinas, so it is entirely possible that they could use some of those nuclear plants to develop electrolytic hydrogen. But until more information does come out, I'm going to be keeping my ear to the ground to see just where they're going to be sourcing their hydrogen. Next, in an article from Eurasia net, Kazakhstan makes a $50 billion bet on green hydrogen, best known as an oil and gas hub, Western Kazakhstan hosts to become a leading global exporter of clean energy, the government has signed a $50 billion deal with European renewables group Switzerland to build one of the world's five largest green hydrogen production facilities in the Mangystau region.
Hyrasia One will use electricity generated by solar panels and wind turbines to separate hydrogen gas from water and aims to start production by 2030 and produce 2 million tons annually from 2032 Onward. This is equivalent to 1/5 of the EU's 2030 target for green hydrogen imports. Although there would be logistical challenges transporting the gas from Kazakhstan to Europe. The meteorological conditions and skills base in western Kazakhstan are ideal for the project. This according to Wolfgang Kropp chief executive of Svevind Energy Group, which is behind Europe's largest onshore wind farm in Sweden, and operates in Germany.
He says Kazakhstan's mangystau region offers very favorable natural resources the wind conditions are very stable and strong comparable to near coast offshore wind parks. The solar radiation is as strong as in southern Europe, and the wide steppe regions are widely unused and sparsely populated. He also says because of the experience as an oil and gas exporting country, there's a lot of know how in Kazakhstan that will help to realize Hyrasia One. Now production costs are also competitive this again according to crop, the project will use wind and photovoltaic plants with a capacity of some 40 gigawatts to generate renewable energy of approximately 120 terawatt hours annually. Hyrasia One a seven subsidy company explained in a statement. This energy will supply an industrial park with a capacity of 20 gigawatts located near the port of Kuryk on Mangystau’s Caspian Sea coast, which will produce hydrogen via water electrolysis, hydrogen when burned emits only water vapor. The project can quote, supply hydrogen on an industrial scale, the firm specified Hyrasia One could become quote, a supporting pillar for the hydrogen markets currently emerging in Europe, as well as in Kazakhstan itself and in Asian countries.
No decision has been made on export destinations and routes this according to the firm as they told Eurasia net in response to emailed queries. Transport by pipeline is most cost effective, but existing gas pipelines that would have to be repurposed or the hydrogen mixed into natural gas transport by rail or ship is already feasible. The EU is an eager market for green hydrogen, as it weens itself off of Russian gas, but Kazakhstan's main export route to Europe via Russia is currently closed because of the war in Ukraine. However, alternative routes are being developed through the South Caucasus and the situation may be different by the time the project comes on stream. The shrinking Caspian Sea will be the water source for the hydrogen production, Hyrasia One was unable to specify how much water it would need, but would keep water withdrawal as low as possible because the seat must be used sustainably to protect the environment, the plant will create 3500 jobs during construction and 1800 permanent jobs.
This according to the president's office, that will become a region which is a hotbed of socio economic disaffection. Despite its oil wealth, the company will provide initial financing and is seeking long term investors to build the project at a cost of 40 to $50 billion. The investment agreement defines economic and legal points on land and infrastructure access and unhindered movement of goods and capital and quote, thus gives the project which has already been in development for three years certainty for investors. Okay, so an interesting move, and I think, ultimately, in the long run a smart move by the country of Kazakhstan. Now, as noted in the article, they are an oil and gas hub. And due to so much volatility going on between Ukraine and Russia right now, they're in a prime position to step up as an energy exporter for Europe and Asia, with that big caveat, as noted in this article, being the fact that they have to transport their gas through Russia to get to Europe. Now, while those transportation logistics are a huge concern, if they are able to work their way around those problems, this can be a huge bump for the country's economics, and a great source of hydrogen for Europe.
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