August 19, 2021 • Paul Rodden • Season: 2021 • Episode: 39
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In episode 039, Yellow hydrogen is finally getting some press and some moves in North Dakota could make for a huge hydrogen hub. All of this on today’s hydrogen podcast.
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Yellow hydrogen is finally getting some press and some moves in North Dakota could make for a huge hydrogen hub. 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 will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden. Welcome to the hydrogen podcast.
Can nuclear hydrogen become competitive? Well, an article from oilprice.com tries to answer that question. The appeal of nuclear power in the Western world has dropped significantly after the disaster with Japan’s Fukushima power plant. It fueled the skepticism of taxpayers, and the willingness of politicians to approve new projects that cost years if not decades to finish, and leave behind a radioactive legacy that remains a hazard for 1000s of years. The UK is one of the few exceptions where a nuclear power plant is under construction at Hinkley Point C. And a second one the size of C is awaiting approval for in state owned EDF is the company behind the revival of the nuclear industry on the island.
Although proponents have touted the necessity of carbon free technologies to produce electricity, Hinkley Point C’s eye watering price tag of $27.8 billion dollars for 3.2 gigawatt is reason for concern. Furthermore, research has shown that the typical nuclear plant built since the 70s has a cost overrun of 241%. A significant part of the costs are a consequence of the extended security measures, which have increased over the years. During the extended construction time, IDC which is interest during construction also added up.
All in all this has created a financial burden that needs to be paid back during the lifecycle of the power plant, which obviously goes at the expense of profitability. And although the British government and EDF agreed on a strike price of 92 pounds 50 per megawatt hour for 30 years, critics warn that alternatives are much cheaper, especially the dramatic drop in cost of wind and solar. And the expected continuation of this trend fuels criticism toward the more expensive and somewhat argued dangerous options such as nuclear. EDF, therefore has been looking for ways to increase profitability and improve the reputation of its projects in the UK. Hydrogen is seen as an opportunity to increase the value of the electricity produced in the nuclear power plant. The French company intends to use some of the power from the second and equally expensive plant size of well C for electrolysis the modular nature of the electrolyzers mean that they could also be used for Hinkley Point C. EDF points to the advantage nuclear has over solar and wind which are intermittent. Nuclear power plants can run constantly and therefore are reliable sources.
Also renewables can have a destabilizing effect on the wholesale prices. EDF intends to use the excess power of its facility during periods of overproduction in the system to produce hydrogen through electrolysis. However, analysts are warning that the economics of the proposal don’t add up. The IEA‘s The Future Of Hydrogen report in 2019 shows the levelized cost of hydrogen is strongly dependent on the number of hours that runs. Hydrogen could be produced with a levelized cost of hydrogen of more than $4 per kilogram if the electrolyzer would be running for 500 hours a year. That would drop to 50 cents per kilogram if it was used for 8000 hours a year. According to Michael Liebreich, founder of Bloomberg Nef, the approach needs to be exactly the opposite, have nuclear running 24 seven supplying process require 24 seven power, the only time you need to change that is when there’s no wind or solar.
Then you dial down the processes and switch the nuclear power to keep the lights on. Furthermore, the cost of offshore wind power is already decreased significantly over the past decade. The UK’s latest wind farms have agreed on a strike price of around 40 pounds per megawatt, and this price is expected to decrease even further in the next decade. However, the intermittent nature of renewables does increase the overall cost on the power systems through additional flexibility and infrastructure needs. Nevertheless, EDF is optimistic about its plans. The French company intends to install an experimental two megawatt electrolyzer that will produce 800 kilograms of hydrogen per day, it could increase to around 550 megawatts by 2035, with a daily production rate of 220,000 kilograms. That being said, EDF does expect a levelized cost of hydrogen of around two euros 44 per kilogram, or one pound 89 per kilogram over a 20 year project cycle, depending on power price and volume technology costs.
Next, a press release from Bakken Energy as they announced an agreement to purchase Dakota Gasification Company assets. Clean energy infrastructure developer Bakken Energy announced on August 16 that it had reached an agreement with Basin Electric Power Cooperative on key terms and conditions to purchase the assets of the Dakota Gasification Company is subsidiary of Basin Electric, and the owner of the Great Plains Synfuels Plant. The closing is subject to the satisfaction of specified conditions and expected to be completed by April 1 2023. Located near Beulah, North Dakota, the Synfuels Plant we transformed into the largest and lowest cost clean hydrogen production facility in the United States. In June 2021 Bakken and Mitsubishi Power Americas has announced that they will enter into a strategic partnership to create a world class clean hydrogen hub in North Dakota to produce store, transport, and locally capture and sequester carbon. The Synfuels Plant facility will form the nucleus of a clean hydrogen hub designed to aggressively advance regional, national and global decarbonisation objectives.
The development of clean hydrogen applications for the agriculture, power and transportation sectors. The Synfuels Plant holds a distinguished place in American history is a pioneer in the development of alternative sources of energy. It’s an established large scale producers synthetic fuels, and provides the existing infrastructure and processes required to accelerate its transformation into the largest and lowest cost producer of low carbon clean hydrogen and ammonia in the United States. This transformation will be greatly facilitated by the Synfuels Plant workforce of experienced personnel. New World Class clean hydrogen production facilities generally require up to 10 years to begin producing hydrogen and develop regional infrastructure and applications. The redevelopment of the Synfuels Plant will cut this time in half and produce an estimated 310,000 metric tons of clean hydrogen per year. This production will use locally sourced feedstock and employ established production and carbon capture processes to produce the clean hydrogen.
The project will use advanced autothermal reforming ATR hydrogen production technology and capture 95% of the carbon emissions. ATR technology was selected over steam methane reforming, and other technologies to maximize co2 capture rates and repurposing of existing Synfuels Plant, infrastructure and processes. And in a quote from the North Dakota Governor Doug Berman, today’s announcement that Bakken Energy has reached an agreement with Basin Electric on terms to develop world class clean hydrogen hub in North Dakota is of historical significance for our state and nation and heralds the extension of North Dakota being home to innovative leadership and fueling and feeding the world. The North Dakota hydrogen hub will lead the establishment of new industries, create high paying jobs and the development of new domestic and foreign markets. This project illuminates how the power of innovation over regulation can save versus destroy jobs. Congratulations to Bakken Energy, Mitsubishi Power and Basin Electric for their expansive vision to leverage the existing Synfuels Plant, its talented workforce and North Dakota’s abundant resources to grow our economy and achieve our shared carbon neutrality objectives. The North Dakota hydrogen hub is expected to be commercially operational in late 2026 with a redevelopment budget for the broader hub including carbon capture and sequestration and hydrogen storage exceeding $2 billion.
Now as part of the agreement between Basin Electric and Bakken, the Synfuels Plant will continue existing operations through 2025. The transformation of the existing facility and subsequent operations of the redeveloped clean hydrogen production facility require the same level of highly skilled employees. Alright, so great news coming out of North Dakota, and really looking for a 2026 turnaround on this technology is very fast. And also setting up this hub in the Bakken Shale makes absolutely perfect sense. So great news on this deal, and great news for North Dakota.
Alright, that’s it for me, everyone. If you have any questions, comments or concerns about today’s episode, come visit me on my website at thehydrogenpodcast.com and leave a message I would really love to hear from you. 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 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.