Paul Rodden • Season: 2024 • Episode: 313
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Welcome to The Hydrogen Podcast!
In episode 313, Who is looking to lead the world and electrolytic hydrogen production? And how can the UK migrate from LNG exports to hydrogen exports? I’ll explore these questions and give my thoughts on today’s hydrogen podcast.
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Transcript:
Who is looking to lead the world and electrolytic hydrogen production? And how can the UK migrate from LNG exports to hydrogen exports? I’ll explore these questions 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 oil price.com. On May 5, Felicity Bradstock writes the race for green hydrogen dominance is heating up. Felicity writes, Several regions of the world are battling to achieve green hydrogen dominance by rapidly developing their hydrogen production capacity, transport infrastructure, and hydrogen corridors. While Asia and the Middle East are rapidly building their production capabilities, Europe is focusing on connectivity to ensure it can transport hydrogen across borders. Hydrogen is seen as key to achieving a green transition as, unlike many other renewable energy sources, it is considered a versatile carrier that can be used as a fuel to power transport and other hard-to-abate industries.
Decarbonising aviation, freight transport and industries such as manufacturing will depend heavily on regional green hydrogen production, which has encouraged both heavy public and private investment into the sector in recent years to accelerate production and spur technological innovation. Most of the hydrogen produced globally is derived from fossil fuels, with green hydrogen contributing less than one percent of global production at present. However, in line with climate pledges and aims for a green transition, several state governments have introduced green hydrogen policies and funding support to develop widescale green hydrogen projects in the coming decades. There is a global green hydrogen capacity of around 180 kT at present, with 14,000 kT more expected to be completed by 2030. There is a significantly larger global project pipeline that could be deployed pending investment and permitting. At present, China is by far the biggest consumer and producer of hydrogen.
The countries with the most ambitious green hydrogen production pipeline include China, Saudi Arabia, Sweden, the U.S., the U.K., Germany, Vietnam, Australia, Oman, France, and Canada. In 2023, China had 1060.9 kilotonnes of electrolysis-based hydrogen capacity in the final stages of development. While the second biggest green hydrogen power, Saudi Arabia, had 339 kT, followed by Sweden with 230.8 kT, demonstrating China’s dominance of the sector. Saudi Arabia is currently constructing the world’s biggest green hydrogen project to date, a facility that is expected to include ?up to 4 GW of solar and wind energy to produce up to 600 tonnes of green hydrogen per day, or up to 200 GW of green hydrogen every year. The European Union aims to produce 10 million tonnes and import a further 10 million tonnes of green hydrogen by 2030, which it will use to power transport and decarbonise industry.
Germany has big plans for a future in green hydrogen, with almost $14.2 billion in state funding earmarked for the development of around two dozen hydrogen projects. Meanwhile, Sweden opened its largest electrolyser facility last year, with more expected to follow. In the U.K., the government believes “low carbon hydrogen has a critical role to play in [its] transition to net zero.” The U.K. plans to develop 5 GW of low-carbon hydrogen production capacity by 2030, equivalent to the amount of gas consumed by over 3 million households annually. In the Middle East and North Africa (MENA) region, several states are developing their green hydrogen capacity, supported by state and private funding. This month, in Oman, the state-owned group overseeing green hydrogen development, Hydrom, surpassed its annual funding aims with the signing of two new projects in Dhofar worth $11 billion. Oman’s total green hydrogen production is now expected to reach 1.38 million tonnes per year (mtpa) by 2030. The second round of green hydrogen auctions by Hydrom attracted more than 200 companies looking to invest in the sector in Oman.
Meanwhile, in March, the Moroccan government stated that it would be allocating one million hectares to green hydrogen projects, with 300,000 hectares designated for the first phase of development. This is expected to attract greater private investment in the sector. The Prime Minister of Morocco said he expected to help the North African country “play a major role in the field of energy transition globally.” Over 100 investors have already shown interest in producing green hydrogen in Morocco, encouraged by the country’s favourable conditions for solar and wind energy production. In Asia, China is rapidly developing its green hydrogen capacity, with an estimated installed capacity of 1.2 GW at the end of 2023.
The Hydrogen Council and McKinsey predict that China will be the biggest single market for clean hydrogen by the mid-century, transporting most of its supplies via pipeline for domestic use. Meanwhile, in Vietnam, the government launched its national hydrogen development strategy in February. Vietnam aims to produce between 100,000 MT and 500,000 MT a year of hydrogen, derived from renewable energy and carbon capture by the end of the decade. This is expected to increase to between 10 million MT and 20 million MT a year by 2050. In most regions of the world, green hydrogen is in the nascent stage of development. However, several countries have significant green hydrogen production pipelines, which they hope to develop over the next decade. This is expected to support the decarbonisation of hard-to-abate industries such as transport and heavy industry.
While China will no doubt remain the biggest green hydrogen producer, several other countries are developing green hydrogen strategies to support regional development to reduce their reliance on foreign powers for their renewable fuel supply. Okay, so a great review of the global hydrogen market and who the players are currently, a big exporter left off the list, however, is Australia. I’m not sure what their global output is right now. But seeing as they are already liquid hydrogen exporters to Asia, I would say that they deserve a seat at the table when considering who the top players are. But that aside, it’s evident that China is looking to dominate the market in the same way they did with the PV market.
What’s interesting, though, is that they’re targeting hydrogen consumption internally, versus exporting the majority of their product with nearly 1100 kilotons of capacity on the way that is a huge volume to consume. Now, obviously, they have the industrial offtake capacity in the country, and it could be a good way to get foreign investment from governments and corporations who see this as China decarbonizing production. Next in an article in gas world.com Dominic Ellis writes invest small scale to spur UK hydrogen trade.
Dominic writes, The UK is well placed to become a European trade hub for hydrogen but should invest in small scale imports and exports initially to stimulate investment, according to Hydrogen UK’s first Import and Export report. Both areas will be key to building supply chains, driving skills and enhancing clean growth, and ensuring the UK remains competitive as major European economies develop their hydrogen strategies. Hydrogen exports will help increase domestic hydrogen production capacity, and stimulate clean growth while increasing the UK’s importance as a low carbon energy partner to Europe. Imports will have an important role to ‘wet the pipes’ as domestic production gets up to speed, accelerate decarbonisation and enhance energy security as part of a diverse energy mix.
The UK serves as a ‘land bridge’ for LNG imports, which soared 74% between 2021 and 2022, while natural gas exports underwent a three-fold boom. Clare Jackson, CEO of Hydrogen UK, said the report aims to enable the UK to become a leader in the application and service of hydrogen, and create a globally attractive import and export market. She said, “By leveraging the UK’s world-class offshore wind generation and geological storage, we have the potential to become a leading European hydrogen hub and reap all the associated economic benefits.” On the best way to transport hydrogen, whether via pipelines, shipping or developing ammonia, LOHCs or metal hydrides, Hydrogen UK believes all technologies will have an important role to accelerate decarbonisation and exploit the UK’s renewable potential.
The UK Government should support ports, terminals and pipeline infrastructure developers in conducting feasibility studies and preparing for the Net Zero transition. Among the 10 recommendations to Government are coordinating the deployment of hydrogen infrastructure with the European Union, and building international cooperation to achieve mutual recognition of certification frameworks, alongside the Low Carbon Hydrogen Standard (LCHS).
More research is needed on hydrogen supply and demand while domestic production is built out, while targeted demand-side support would accelerate decarbonisation in hard-to-abate sectors. Okay, so some insight into the gas market in the UK and how they need to look at their role as importer and exporter of hydrogen, with their current increases in LNG imports and exports. They know their role in providing energy to many European nations, and now, as they ramp up hydrogen production, they can convert that LNG export into hydrogen.
Along with that comes hydrogen storage, the amount of salt domes around the UK is significant. And with so much capital being invested right now in studying salt domes, as the best long term hydrogen storage solution, the UK could further seal themselves as a major EU energy provider long into the future.
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, YouTube, 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 info@thehydrogenpodcast.com. So until next time, keep your eyes up and honor one another.
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.
