Paul Rodden • Season: 2024 • Episode: 338
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Welcome to The Hydrogen Podcast!
In episode 338, It’s a big news day today, as I cover hydrogen movements from Shell, Woodside, H2 Teesside and Raven SR, I’ll go over all this news and give my thoughts on today’s hydrogen podcast.
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Respectfully,
Paul Rodden
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Transcript:
It’s a big news day today, as I cover hydrogen movements from Shell, Woodside, H2 Teeside and Raven SR, I’ll go over all this news 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.
First up today in an article in Rig zone. Rocky Teodoro writes, Shell Makes FID on Hydrogen Electrolyzer in Germany. Shell Deutschland GmbH has made a final investment decision (FID) to progress REFHYNE II, a 100-megawatt (MW) renewable proton-exchange membrane (PEM) hydrogen electrolyzer at the Shell Energy and Chemicals Park Rheinland in Germany. Using renewable electricity, REFHYNE II is expected to produce up to 44,000 kilograms per day of renewable hydrogen to partially decarbonize site operations, Shell said in a statement. The electrolyzer is scheduled to begin operating in 2027. Renewable hydrogen from REFHYNE II will be used at the Shell Energy and Chemicals Park to produce energy products such as transport fuels with a lower carbon intensity. Shell stated that using renewable hydrogen at its Rheinland facility will help to further reduce its Scope 1 and 2 emissions.
In the long term, renewable hydrogen from REFHYNE II could be directly supplied to help lower industrial emissions in the region as customer demand evolves, Shell noted. Shell said that the project will benefit from the experience that the company and its project partners, ITM and Linde, have in developing, constructing and operating other renewable hydrogen projects in Europe. REFHYNE II follows the success of the 10-MW PEM electrolyzer REFHYNE I, which began operating in 2021 and uses the same technology. Since 2021, preparations have been under way to deliver the detailed engineering plans for REFHYNE II, complete on-site groundworks, and connect to existing infrastructure, according to the statement. “Today’s announcement marks an important milestone in delivering our strategy of more value with less emissions. Investing in REFHYNE II is a visible demonstration of our commitment to the hydrogen economy, which will play an important role in helping to decarbonize Shell’s operations and customer products,” Shell Downstream, Renewables and Energy Solutions Director Huibert Vigeveno said.
“Our decision to invest illustrates what can be achieved with the right enabling conditions to deliver competitive projects”. Shell remarked that the REFHYNE II project has been enabled by supportive policies, including the European Union’s (EU) binding targets for the use of renewable hydrogen, and the German Federal Government’s regulatory framework. The project has also received funding from the EU’s Horizon 2020 research and innovation program. The company expects the hydrogen produced from REFHYNE II will meet the requirements for renewable fuels of non-biological origin (RFNBO) in accordance with current EU legislation. The capital investment for REFHYNE II will be absorbed within Shell’s cash capital expenditure guidance, and this project exceeds the internal rate of return (IRR) hurdle rate for its Renewables and Energy Solutions business, the company said.
Shell did not give the specific financial details but said it plans to invest $10 billion to $15 billion in the period of 2023-2025 to support the development of low-carbon energy solutions including e-mobility, low-carbon fuels, renewable power generation, hydrogen, and carbon capture and storage. Last year, Shell invested $5.6 billion in low-carbon solutions, which was 23 percent of its capital spending. Meanwhile, in the Netherlands, Shell is currently constructing Holland Hydrogen I with a capacity of 200 MW, one of Europe’s largest renewable hydrogen plants under construction. Okay, so REFHYNE II is moving forward on the success of the REFHYNE One facility. Now, what makes this so intriguing is that even though we don’t have detailed financials on the project, this article does showcase that the project beats Shell’s IRR targets for this business line, and that’s a big deal, and something that needs to be highlighted, because as more off take opportunities emerge that IRR could grow substantially.
Next in an article in the Wall Street Journal, David Winning writes Woodside to Buy Ammonia Plant From OCI Global for $2.35 Billion. Woodside Energy has agreed to an around $2.35 billion deal to buy an ammonia plant under construction in Texas, seeking greener assets to balance a portfolio that generates most of its profits from oil and natural gas production. Woodside Chief Executive Meg O’Neill said the acquisition of the ammonia project in Beaumont, Texas, from OCI Global would support its strategy of thriving through the energy transition. Construction of the Texas project began in late 2022 with first production of ammonia expected in 2025. The first phase of the plant aims to produce 1.1 million metric tons of ammonia each year. For Woodside, a key attraction is agreements with industrial-gases group Linde and U.S. oil major Exxon Mobil that will allow the company to mitigate its Scope 3 emissions.
The Texas plant will incorporate Linde’s low-carbon intensity hydrogen production and carbon capture technology. Also, Linde has contracts with Exxon to take and store carbon dioxide produced at the facility. Woodside said these agreements will enable output of so-called lower carbon ammonia from 2026. “The potential applications for lower carbon ammonia are in power generation, marine fuels and as an industrial feedstock, as it displaces higher-emitting fuels,” O’Neill said. Global ammonia demand is forecast to double by 2050, with lower carbon ammonia comprising nearly two-thirds of total consumption, she said. Woodside said it aims to be in a position to make a final investment decision on the project’s second phase, which would double production, in 2026. It estimates gross capital expenditure for that expansion at between $1.2 billion and $1.4 billion.
Okay, so Woodside jumping into the low CI ammonia game with this massive acquisition in Texas. Now, Woodside has been trying to get into the hydrogen game for some time now. It’s been making interesting moves along the way. This acquisition is a safe bet for them, as ammonia demand is still looking to skyrocket over the next quarter century, and while $2.35 billion is a hefty sum, I know that the long term gains will dwarf that number, and probably sooner than most think. Next. In an article in the BBC, Joanna Morris writes Plans for hydrogen power plant a step closer. Joanna writes Plans for a new hydrogen power plant have moved a step closer after contractors were appointed. H2Teesside, which would be operated by BP, would be one of the UK’s largest blue hydrogen production facilities.
An agreement of a statement of principles between BP and the government’s Department for Energy Security and Net Zero (DESNZ) has been reached over the Redcar facility. Technip Energies and Costain have also been selected to design the facility and its infrastructure, it has been announced. Costain will design H2Teesside’s pipeline infrastructure while Technip Energies will deliver front-end engineering design for the production facility. A spokesman for BP said the contracts represent an “important step towards commercial operations”. He said the development would support economic development and regeneration on Teesside by creating jobs in construction and operation. He added that agreeing the statement of principles with DESNZ would enable the company to enter the final stage of negotiations for a low carbon hydrogen agreement that would “support the production of low carbon hydrogen on Teesside”.
BP spokesman Andy Lane added: “The project could play a critical role in decarbonising industry on Teesside, helping to transform the region into a leading hydrogen hub and kickstart the UK’s low carbon hydrogen economy.” Okay, so the blue hydrogen project at Teesside is moving forward, and it’s a great thing to see. Teesside is a massive facility, and to leverage hydrogen production there will be a boost to their revenue, as well as the ability to start offering low carbon products to Great Britain. And lastly, in a press release on July 16, Raven SR Awarded €1.4M for Flagship Project in Spain.
Raven SR announced on July 16, it was awarded a 1.44 million euro grant from ministry for ecological transition and demographic challenge. The funding is managed by the Institute for the diversification and saving of energy, or idae, under the Strategic Projects for economic recovery and Transformation Program. The funding will support the development of an organic waste to renewable hydrogen production facility in Zaragoza, Spain, using Raven’s non combustion steam CO two reforming technology. The project is the first in Europe to be established on an industrial scale. Raven Iberia was previously awarded in 2021, 1.7 million Euros by the European Commission, being a part of the European consortium, Hy2 market. And a quote from Matt Murdock, founder and CEO of Raven Sr, this grant award reinforces the attractiveness of the steam CO two reforming technology and the critical role it can play in Spain, in the European. Union when producing renewable hydrogen.
Matt continues by saying, we are honored the ministry recognizes the benefits of our non combustion technology and the opportunity to reduce organic waste by converting it into renewable hydrogen. Spain is at the forefront of hydrogen production and the EU and we look forward to developing this project in the coming year to advance renewable fuel options in the region. The Ministry of ecological transition and demographic challenge is responsible for developing government policy on addressing climate change, prevention of pollution and protecting the natural heritage, biodiversity, forests, sea water and energy for a more ecological and productive social model.
It is also responsible for the elaboration and development of government policy against the country’s demographic challenges. The ministry is supporting with this specific call for projects, innovative developments and advanced technologies to produce renewable hydrogen in Spain that can be replicable and scalable. The publication of the final award resolution was made by the ministry last week after the approval of the Board of Directors of the Institute for energy diversification and savings, a public entity dependent on medico and responsible for managing these funding programs for innovative technologies, by developing and deploying advanced technologies, Raven is contributing to Spain’s national strategy of reducing carbon emissions and promoting renewable energy sources, Raven is also exploring other production opportunities across the European Union, in France, Portugal and Greece. Okay, so our friends over at Raven SR with great news on their award in Spain, this use of their technology really is groundbreaking, and I couldn’t be happier for Matt Murdock and his team at Raven. Well done everyone.
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.
