May 04, 2023 • Paul Rodden • Season: 2023 • Episode: 211
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Welcome to The Hydrogen Podcast!
In episode 211, A new report in The Wall Street Journal compares and contrasts project development between the US and the EU, and Nikola announces a critical partnership. I’ll cover all of this on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
A new report in The Wall Street Journal compares and contrasts project development between the US and the EU, and Nikola announces a critical partnership. I’ll cover 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 an article in the Wall Street Journal Will Horner writes North American clean hydrogen projects are booming, will writes efforts to boost production of hydrogen a fuel seen as crucial for meeting global climate goals are racing ahead at a rapid pace, particularly in the US, threatening Europe’s lead. According to a report. Planned hydrogen electrolyzer projects globally have jumped by 18% in the last six months, surpassing one terawatt of electricity capacity for the first time. According to a semi annual report by Aurora Energy Research.
North America has seen the largest increase in plant hydrogen projects in the past six months. According to the Oxford based consulting firm, while Europe is still the most popular region for new hydrogen projects. Its share has fallen from 63%, six months ago to 56% and the report predicts it will lose its majority share by 2025. Clean hydrogen is a small but fast growing area of the transition to lower polluting energy sources. The clean burning gas is forecast to play a central role in decarbonizing heavy industries, such as steel and chemicals. However, low emission hydrogen production is currently small compared with where analysts believe it will need to be. The International Energy Agency says total hydrogen production will need to be around 180 million metric tons by 2030. From just over 90 million tonnes today to reach net zero carbon emissions by 2050. Low Emission production of the gas is less than 1% of current total production and would need to rise more than 90 million tons by 2030.
Europe has long dominated the burgeoning hydrogen industry, but its lead now appears to be slipping particularly in the face of us plans to spend vast sums of money to boost production of renewable energy and invest in a hydrogen. Europe’s shrinking share of hydrogen projects is a quote direct consequence of the blocs slow response to the US inflation Reduction Act and its delay in developing concrete regulation for renewable hydrogen. This according to Dilara Caglayan, lead hydrogen researcher at Aurora. The European Union has been an early adopter of new low carbon technologies such as hydrogen electrolyzers, electric vehicles and solar power. However, it’s been slow to respond to the Biden administration’s inflation Reduction Act, which earmarked $369 billion for green energy programs. The US now offers straightforward, generous tax credits to clean hydrogen producers. While the EU took many months to work out the details of its incentives, which generally involve more red tape. Washington’s vast spending prompted fears in Europe that its clean energy companies would see the US as a more attractive place to build new projects or may even plan to relocate entirely. The EU in February outlined new plans to enhance the continents competitiveness in regard to low carbon industries and in March proposed allowing some foreign incentives to be matched in certain sectors, including hydrogen electrolyzers.
Europe still has the lead in building a regional market for hydrogen, which includes developing hydrogen producers and consumers in proximity and local infrastructure networks to help transport the fuel and was believed creating liquid regional markets for hydrogen will be crucial in making it more affordable because of the difficulty and cost involved in transporting the highly combustible gas over long distances. Still, much of the industry is nascent, and many of the projects tracked by Aurora won’t come online for some time. Only 1% of the one terawatt of plant hydrogen projects have begun construction, while 86% are in the early planning stages of development. Aurora also stated that installing one terawatt of electrolyzer capacity remains a distant reality. Around 269 gigawatts of the projects will be online by 2030. Compared with around .4 or five gigawatts today, Aurora forecasts European low carbon hydrogen prices will fall from seven euros a kilogram and 2025 to 2.8 euros owes a kilogram by 2050. As new supply comes online, meanwhile, demand for hydrogen in Europe is expected to rise 60% by 2030. And increase threefold by 2040.
Compared with 2023. And a quote from Brian Murphy, Senior Analyst for hydrogen at s&p global commodity insights, the scale of the increases we’re expecting is on an industrial revolution size scale. We are seeing the beginning of that today. Alright, so a very interesting report from The Wall Street Journal showcasing and highlighting the big differences right now in the US and the EU, and how the US is really starting to take in that capital from Europe that was supposed to be slated for European construction, and bring it into the US. Now one of the main things that I think is pertinent about this article is how it contrasts the infrastructure development between the US and the EU. Now the EU has that hydrogen backbone plan that they’ve had for a few years now, the US doesn’t have that. And that transportation component around hydrogen is one of the most critical issues of the industry, you either find a way to transport it cheaply, or you have to make it on site. And that really means finding multiple consumers and off takers of your hydrogen or its derivatives within just a few miles of production.
And that’s really the main drawback between moving from the EU into the US for project development. the off taker space in the EU is much more defined than it is here in the US. Now, that’s not to say that it’s not changing and in some areas changing quite rapidly, especially for derivatives such as green ammonia and synthetic fuels. But really, that’s the question now that these developers need to ask themselves both in the US and the EU in the US. Do you really want to spend the legwork and time trying to identify the transportation and offtake opportunities? Or do you want to try to work the red tape and the hurdles in the EU next in a press release from Nikola, Nikola and Volterra entered into a definitive strategic partnership on hydrogen station infrastructure funding for up to 50 stations. On May 2 of this year, Nikola Corporation, a global leader in zero emissions, transportation and energy supply and infrastructure solutions via the Hyla brand and Volterra, a leading provider of critical infrastructure necessary to support the full decarbonisation of transportation announced a definitive agreement to develop the hydrogen fueling infrastructure required to support Nikola’s deployment of its innovative zero emissions vehicles. Through this Strategic Partnership Agreement.
Nikola and Volterra plan to develop up to 50 hyla stations throughout North America over the next five years. This partnership underpins Nikolas prior announced plans to develop 60 stations by 2026. Through this partnership, Nikola and Volterra will create the largest North American open network of commercial hydrogen refueling stations, providing fuel to vehicles from various manufacturers to accelerate the adoption of zero emission vehicles. Volterra will site, build, own and operate the strategically located fit for purpose hydrogen refueling stations and Nikola will supply the hydrogen fuel and provide technical expertise. This partnership will accelerate the deployment of the several billion dollars will tell her plans to invest into EV charging and hydrogen fueling facilities together Nikola and Volterra will develop a reliable and optimal refueling experience, and a quote from Carey Mendez, president of Nikola energy.
Our partnership with Volterra will bring substantial capital and expertise to support Nikolas plans to build a refueling infrastructure to support its customers. Volterra’s expertise in building out zero emission energy infrastructure will be a key enabler for Nikola’s first to market, hydrogen fuel cell electric trucks and fueling infrastructure. Nikola and Volterra have a shared commitment to the rapid deployment of infrastructure, which is key to enabling the transition to a zero emission economy. And in a quote from Matt Horton, CEO of Volterra. Volterra’s mission is to accelerate the adoption of zero emission vehicles, but taking on the complex and costly nature of developing the necessary infrastructure. By partnering with Nikola, he says we are expanding our focus on beyond battery electric vehicle charging in order to dramatically increase hydrogen fueling infrastructure, reduce barriers for operators buying vehicles at scale to enable mass adoption of hydrogen trucks. Okay, so this is a great announcement.
And to me, this was an announcement that Nikola had to make, and they needed to do this for their Hyla brand to really make sense. Now Hyla was started up to encompass the companies in Energy products for producing, distributing and dispensing hydrogen. But it would have been next to impossible for them to do that without partnering with a company like Volterra. Now, Volterra historically has been focused on EV charging stations. And so the question now is, how fast can Volterra make the switch to hydrogen fueling stations? Because that’s something they’re going to have to learn very quickly.
Now, if you know me, you know, I love location analytics. And that’s something that is particularly highlighted in this announcement. And I really want to know what strategy these two companies have collaborated on To find out just where they’re going to locate these fueling stations.
All right, that’s it for me, everyone. Now, 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 podcast, Spotify, Google, YouTube, whatever it is, that will be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. And as always, take care. Stay safe. I’ll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
