Paul Rodden • Season: 2024 • Episode: 336
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Welcome to The Hydrogen Podcast!
In episode 336, OPW makes some massive acquisitions to push them further into the cryogenics and liquefied gasses markets, and is economics finally playing its necessary role in green hydrogen development. I’ll go over all of this and give my thoughts on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
OPW makes some massive acquisitions to push them further into the cryogenics and liquefied gasses markets, and is economics finally playing its necessary role in green hydrogen development. I’ll go over all of this 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 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.
First up today, we actually have a dual press release from our friends over at OPW. The first press release on July 18, OPW Announces Acquisition of Demaco, a European Leader in Cryogenic Components and Systems. On July 18, OPW announced that it has completed the acquisition of Demaco, a provider of vacuum jacketed piping and other cryogenic equipment for gas producers, research institutions, EPC contractors, and end-users of liquefied gasses within various end-markets. Demaco will become part of the OPW Clean Energy Solutions business unit.
Established in 1960, Demaco is headquartered in Noord-Scharwoude, The Netherlands, and employs 150 people. It designs, manufactures, and installs cryogenic components and systems, with a strong global focus on hydrogen, cryogenic and other industrial gas markets. Leveraging the current OPW operating scale and capabilities is expected to yield significant growth and offer benefits to both OPW and Demaco customers. Demaco products and services are highly complementary to the existing OPW Clean Energy Solutions (“OPW CES”) business unit and will further expand the product offerings of OPW on a global basis. “This acquisition marks a significant milestone in the OPW expansion strategy, enhancing our capabilities and broadening our product offerings to meet the growing demands of the clean energy market worldwide,” said Kevin Long, President of OPW.
Similar to RegO and Acme Cryogenics businesses within OPW CES today, Demaco has been serving the cryogenic and industrial gas industry for many years with an intense focus on delivering the most advanced infrastructures for their customers across the globe. With Demaco joining the OPW CES team, we are poised to drive innovation and growth in the cryogenic and industrial gas markets, solidifying our ability to serve our customers with advanced technological solutions.” And in OPW second press release on July 22 OPW is pleased to announce that it has completed the acquisition of Marshall Excelsior Company (“MEC”), including all its entities (Marshall Excelsior Co, Xanik, CPC-Cryolab and BASE Engineering Inc.). Based in Marshall, MI, MEC is a leading provider of highly engineered severe-service flow-control solutions for use in compressed and liquefied-gas applications.
“For more than 48 years, Marshall Excelsior has been a well-regarded manufacturer of high-quality equipment and systems that have been designed to optimize the handling of various forms of compressed and liquefied gases, including LPG, anhydrous ammonia (NH3) and cryogenic liquids,” said Kevin Long, President of OPW “These products support the transport, transfer, storage, delivery and dispensing of these critical commodities, which makes MEC an ideal addition to our OPW portfolio of product brands.”
To confidently serve the compressed and liquefied-gas market, MEC offers a comprehensive portfolio of valves, regulators, controls and ancillary products, all of which have been engineered to help reduce the risk of system failure, resulting in optimized uptime and return on investment for the end user. This expansive portfolio of products enables MEC to offer clean-energy solutions to a wide range of industries, including refining, power generation, chemical, space launch, medical, semiconductor, agriculture, bulk storage, recreational vehicle, commercial and residential.
“Since our founding, MEC has been committed to producing cleaner and greener products and systems that help optimize safety and performance,” said Pat Donovan, President & CEO of MEC. We see that same commitment from OPW and their product brands and look forward to playing a leading role as the company continues to build its reputation as a leader in the growing and evolving compressed and liquefied-gas markets in both North America and globally. Okay, so, two great acquisitions from our friends over at OPW. This really does further their expertise in cryogenics and the liquid gas market, namely hydrogen. And if you haven’t had an opportunity to watch my interview with Felipe Sperduti Machado from OPW, I highly suggest doing so. He shares some incredible insights into the work OPW is doing in the hydrogen space.
And next in an article in Reuters, Antony Currie writes, Green hydrogen fever gets needed doses of reality. Antony writes, Hot air is seeping out of the green hydrogen bubble. Over the past five years fans of the low-carbon gas have argued it can replace fossil fuel in everything from industrial processes to heating homes to transport. Yet cost and science make many of its applications fanciful. Developments in July at two big proponents of the technology suggest the industry may be about to get more practical and smaller. European Union auditors, for instance, have called the bloc’s target of producing 10 million tons of green hydrogen and importing as much again by 2030 as “overly optimistic, opens new tab” and lacking “robust analyses”. Fortescue, opens new tab, meanwhile, has just ditched its goal of producing 15 million tons a year by 2030.
Andrew Forrest, the $38 billion Australian iron ore miner’s founder and a climate campaigner, has been one of the gas’ most vocal backers, calling sceptics “muppets”. Forrest blames high energy costs for the pullback from the gas extracted from water using renewable energy. That’s just one of many factors though. The scale of power needed is daunting: using green hydrogen in all steelmaking, aviation and shipping would require almost five times the solar and wind capacity installed globally in 2022, says Michael Liebreich, co-managing partner at EcoPragma Capital. The storage and shipping capacity required is also higher than for the conventional hydrogen made from fossil fuels. All in, producing green hydrogen, for most companies, would currently cost at least $6 a kilogramme, four times the expense of producing the dirtier version of the gas, per Liebreich. He notes, using International Energy Agency data, that just 1% of some 1600 green hydrogen projects by production volume have progressed much beyond the exploratory stage.
And as a fuel it is incredibly wasteful. At least 70% of the energy is lost to making and moving it by the time it lands in, say, a hydrogen-powered car, like the 500 Mirai models Toyota Motor (7203.T) , opens new tab supplied to the Paris Olympics; for pure electric vehicles, the loss is just 20%, according to White House climate adviser Saul Griffith. The concept still has some clear uses. It could replace the natural, or fossil, gas that currently creates around 100 million tons a year of hydrogen for manufacturing fertiliser, petrochemicals and other products. It could replace coal in at least some steelmaking, which is where Forrest is now focusing Fortescue’s efforts.
And it could play a small role in other applications, say as emergency long-term backup in some electricity grids. But electric batteries, heatpumps and biogas are usually better alternatives to green hydrogen for power, heating and transport – from cars to jet fuel. Trying to compete with them will just burn money. Fortescue Energy CEO Mark Hutchinson on July 25 said the company is “steadfast in its commitment to green hydgrogen”. He was speaking to investors and analysts a week after parent company Fortescue said it was putting on hold its target of producing 15 million tons of green hydrogen by 2030. On July 17 the European Court of Auditors published a report saying that the European Union is unlikely to meet its “overly ambitious” goals of producing 10 million tons of green hydrogen and importing a further 10 million tons by 2030. Okay, so there’s quite a bit to unpack from this, but first, it’s important to ask, what is it that this article is trying to say? Is it saying that hydrogen is done? No.
Is it saying that green hydrogen is done. Also, no. Is it saying that economics have finally entered into the discussion for green hydrogen development. Yes, and it’s about time. Economics will always need a seat at the table when global energy policy is being discussed. Let’s look at the EU for instance, the fact that they’re finally pulling back from their goal of 10 million tons produced and another 10 million imported by 2030 is an astronomical number, and while there are electrolytic hydrogen plants being developed at that scale in places like Oman, they won’t be up and running and producing in those numbers within the five to six year time frame the EU is hoping for.
But what’s really hamstringing the hydrogen market is this ideology that only one type of hydrogen production is good. It’s the same blind allegiance that legacy oil and gas investors have about their industry. Both arguments are polar opposites, and both arguments will restrict energy developments in the future, hydrocarbons are a critical resource and will continue to be so long in the future, that doesn’t mean we can’t use hydrocarbons in a more efficient way, and I still believe that electrolytic hydrogen has its place in the energy spectrum, but that time is still decades away.
Nearly every other hydrogen production method is cleaner than what we have historically used for generating electricity on a full cycle carbon intensity score, those are the production methods that need to be embraced by the EU to allow for the hydrogen transition to take place. And it is from that vantage point that we can be and should be optimistic about the future of global energy supply.
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.
