Paul Rodden • Season: 2023 • Episode: 263
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In episode 263, Germany announces its massive hydrogen pipeline plan. And how can we get Net Zero hydrogen to an affordable level? All discuss these topics and give my thoughts on today's hydrogen podcast.
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Germany announces its massive hydrogen pipeline plan. And how can we get Net Zero hydrogen to an affordable level? All discuss these topics and give my thoughts 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 reuters.com Riham Alkousaa writes Germany presents hydrogen core network plan in bid for 2045 climate neutrality, Germany's core network for hydrogen fuel will extend over 9700 kilometers or 6000 miles and cost around 20 billion euros or $21 billion. By 2032. The chairman of the transmission system operator FNB Gas said on Tuesday, as Berlin bets on the fuel for decarbonisation, existing natural gas pipelines will make up to 60% of the network connecting ports industry, storage facilities and power plants.
FNB Gas Chairman Thomas Goessmann told a news conference presenting the network's plans with Economy Minister Robert Habeck the project will be privately financed. Germany is seeking to expand reliance on hydrogen as a future energy source to cut greenhouse gas emissions for highly polluting industrial sectors that cannot be electrified, such as steel and chemicals and cut dependency on unimportant hydrocarbons. In July, the German Cabinet approved a new hydrogen strategy setting guidelines for hydrogen production, transport, infrastructure and market plans. Goessmann also added that the hydrogen network which will run through all federal states, as a core part of that infrastructure, and drilling will start next year.
He also said we all know that we have no time to lose, and that the first hydrogen must flow as early as 2025. The excavators have to roll next year, an expectation of an acceleration and future demand for the green fuel. The network will be about three times larger than the expected demand in 2030 of some 100 terawatt hours around a 10th of Germany's annual gas consumption. In the years before the 2022 energy crisis, the government will evaluate the network's plans every two years and adapt accordingly. This again according to Habeck, the network will be the core of Europe's hydrogen grid, and we'll be connecting to Germany's neighbors such as Denmark, Norway and Spain as Berlin expects to import up to 70% of its hydrogen needs. Again, according to Habeck, although we will remain an import country we will significantly reduce our dependence on imports are government built to accelerate hydrogen expansion is expected this year, the cost of the hydrogen lines should be covered by user fees. But in light of the relatively few users, the government will make advance payments over the next 20 years to keep use affordable and promote the ramp up of the hydrogen economy.
This again according to Habeck, the fees should initially be uniform. A draft last seen by Reuters on Tuesday showed again according to Habeck, the idea is that there will be no distortion of competition in Germany. This means that all customers will pay the same amount for network usage fees. The Cabinet will meet on Wednesday to discuss the network's financing and its regulation. Okay, so Germany is finally finalizing its hydrogen transportation network, and now has some estimates on total pipeline infrastructure costs. Now $21 billion is a hefty sum. And for Germany to expect cost to be covered by user fees may turn out to be a bit optimistic, especially with such a small user base, meaning the government floating those costs could go on longer than expected. But it's good to see more formalized plans around the European hydrogen backbone plan. I think we've all assumed that Germany would be the core network. And now we know that to be fact, it's also interesting to see that they're looking to use 60% of their existing natural gas pipeline network.
I would imagine that hydrogen blending will be the first steps and I'm curious note what percentage they'll start with. That also means that 40% of the pipelines will be new hydrogen specific lines. A big reason I'm sure why the price tag is so large, and Germany is also moving extremely fast on this. They're looking to move dirt starting next year in preparation for the 2025 rollout. So if you're with an EPC company, make sure you get on the list of providers as soon as possible. Germany is moving at lightning speed. Next in an article in forbes.com Claus Nussgruber writes navigating the dynamics hydrogen production cost versus carbon intensity. The green hydrogen revolution central to renewable energy development and decarbonisation is increasingly scrutinized through two critical lenses cost and carbon intensity. Hydrogen production methods vary significantly in both aspects with green hydrogen representing the ideal low carbon footprint yet, it's challenged when trying to meet the necessary economical cost point. The cost point is also changing significantly as newer technologies come to market.
While traditional hydrogen production methods such as Steam methane reforming are cost effective, they come with a high carbon footprint. On the other hand, green hydrogen, although environmentally friendly, typically remains significantly more costly than its hydrocarbon counterparts due to existing hurdles that cause inefficiencies, balancing these two factors is essential for green hydrogen to fulfill its promise and the energy transition. Currently, the production cost of green hydrogen is a significant hurdle to widespread adoption factors like the capital cost of electrolyzers, operation and maintenance expenses and the cost of renewable electricity all contribute to the high price tag. Consequently, even though green hydrogen holds a great potential for renewable energy and decarbonisation, its traditional economic competitiveness is relatively low. However, the cost dynamics of green hydrogen production are changing rapidly. Technological advancements, economies of scale and degrees of renewable energy costs are gradually reducing the price of green hydrogen.
That said, a change can be achieved if for instance, the need for electricity can be removed from the reactor process completely, and the efficiency of the production process improved. While cost is an essential consideration, the carbon intensity of hydrogen production is an equally important metric. carbon intensity refers the amount of carbon emitted per unit of hydrogen produced, lower carbon intensity means fewer greenhouse gas emissions aligning with the goals of decarbonisation, and climate change mitigation. Traditional methods of hydrogen production, like Steam methane reforming, have high carbon intensity due to their reliance on hydrocarbons. Green hydrogen and contrast has near zero carbon intensity When powered 100% by renewable electricity.
Newer technologies help provide the promise of lower end competitive cost points at similar carbon intensities provided by green hydrogen produced from renewable power. Utility Global's ie zero technology platform is one example as it works with the inherent energy contained in a variety of waste gases to drive conversion and eliminate the need for electricity. Another example is transformed materials, which converts natural gas into hydrogen, creating acetylene as a byproduct with zero co2 emissions. Other processes like the novel by metallic catalyst, developed by Pacific Northwest National Labs, and West Virginia University convert natural gas into hydrogen and solid carbon without emitting co2. The ultimate goal for green hydrogen industry is to balance low cost and low carbon intensity.
Achieving this balance will not only make green hydrogen or net zero hydrogen more competitive but also contributes significantly to renewable energy integration and decarbonisation. strategies to achieve this balance include technological advancements to improve efficiency and durability. These improvements can be realized from a combination of factors such as removing electricity from the reactor process, advances in pipeline material technology that can reduce the costs associated with transporting hydrogen over long distances, or using specialized micro organisms that can produce hydrogen under specific conditions. These are just a few examples of technologies that have the possibility of eliminating the hurdles to make hydrogen a mainstream sustainable and global fuel source.
Looking ahead, the future of hydrogen lies in realizing cost effective low carbon production, the potential for green hydrogen or net zero hydrogen to transform various sectors ranging from energy to transportation and industry is vast. However, unlocking this potential requires addressing the dual challenge of cost and carbon intensity. Progress is already being made, the cost of green hydrogen is projected to fall and its carbon intensity remains among the lowest of all hydrogen production methods. With continued innovation, policy support and strategic investments. The dream of cost effective low carbon hydrogen is becoming a tangible reality. Okay, so a look at how we can drive down the cost of green hydrogen.
And what I find interesting is that the examples being given for alternative pathways involve waste gases, or hydrocarbons as feedstock. I also find it interesting that the author equates green hydrogen to net zero hydrogen, my assumption is that we can include other technologies outside of what is traditionally thought of as green hydrogen. It's also important to note that the SMR technology discussed in this article never mentions CCUS now I know that's a touchy topic.
But one that bears mentioning as it CI score is drastically reduced from Legacy gray production. But I am relieved to see the author bringing these new technological developments outside of the traditional blue green narrative. These technologies such as methane pyrolysis that I discuss often have the potential to revolutionize hydrogen and solid carbon manufacturing, all with low CI scores and embracing all avenues of clean hydrogen production is the only way to drive the hydrogen economy forward.
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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.