November 11, 2021 • Paul Rodden • Season: 2021 • Episode: 63
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In episode 063, Japan continuing to invest big in hydrogen. A new green hydrogen project from Shell has gotten announced. And Baker Hughes is getting into the turquoise hydrogen business. All of this on today's hydrogen podcast.
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Japan continuing to invest big in hydrogen. A new green hydrogen project from Shell has gotten announced. And Baker Hughes is getting into the turquoise hydrogen business. 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 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 from s&p global.com, Henry Edwards Evans writes Cop 26, Japan to invest $100 million to convert hydrocarbon fired plants to hydrogen based ammonia. He writes Japan is to invest $100 million in the transformation of hydrocarbon fired plants into ones based on ammonia and hydrogen. The country's Prime Minister Fumio Kishida, said at the UN's Climate Conference of the Parties in Glasgow on November 2, hydrocarbons accounted for 69% or 651 terawatt hours of Japan's electricity generation in 2020, the seventh highest share in the G 20 countries. According to Kushida. With solar said to play a major role in the transition conversion of thermal power to zero emission generation is a necessary path to stabilize frequency.
Japan's renewable energy generation grew by 64 terawatt hours in 2020. The bulk of this coming from solar additions and again according to Kushida, as he told the COP 26 delegates, I want to assure you that Japan attends to reduce its greenhouse gas emissions by 46% by 2030. On 2013 levels, this with an effort to extend this to 50%. Japan would use its $18 billion Green Innovation Fund to develop next generation batteries and motors, hydrogen and synthetic fuels, quote, which together hold the key to the spread of electric vehicles. This again according to the Prime Minister, by 2030, Japan aims to have 800,000 fuel cell vehicles and more than 5 million residential fuel cells deployed, supported by an international hydrogen supply chain. s&p Global Platts assess the price of Japanese hydrogen which is pem electrolysis, including capex at $12.10 per kilogram on November 2, conventional hydrogen which would be SMR with carbon capture, including capex was assessed at $4.89 per kilogram.
On COP 26 is drive to boost international climate financing, Kushida said Japan would add a further $10 billion to its pledge to provide 60 billion over the next five years to 2025. Under the Paris Agreement, developed nations promised to supply $100 billion per year in finance from 2020. To support developing economies climate actions, the target is not expected to be reached before 2023 Kushida also said Japan would double its contribution to adaptation funds to $14.8 billion to reduce disaster risk and provide some $240 million to support forestry conservation. Okay, so interesting article, but is it really a big surprise that Japan is investing even further in hydrogen infrastructure? Not really. When it comes to fuel cell deployment and hydrogen infrastructure Japan is on the forefront globally. But there are still some interesting takeaways to be gleaned from this article, including the lack of any color scheme.
So the big question does remain. Where is this ammonia and hydrogen going to be coming from? Well, the way things currently stand, there are two potential targets Australia and Canada, with the possibility of the Middle East entering into a bidding war to ultimately supply Japan with its ammonia and hydrogen needs. And I would not be surprised that due to this, a benchmark will be established on a hydrogen supply chain for shipment and transportation of hydrogen and ammonia. Next, in a press release, Hydro and Shell join forces to explore renewable hydrogen projects. Hydro Havrand, Hydro’s green hydrogen company, and Shell New Energies Holding Europe B.V. or shell have agreed to explore the potential for joint projects producing hydrogen from renewable electricity. The ambition is to use the hydrogen to help decarbonize Hydros and shells own operations and to supply customers in heavy industries, the maritime sector and road transport.
In a Memorandum of Understanding signed on November 9, shell and Hydro Havrand, aim to jointly produce and supply hydrogen produced from renewable electricity in hubs centered around hydro and Shell's own business and where they see strong potential for scaling production for customers and heavy industry and transport. The companies have started initial work Under the agreement, they will first identify opportunities to produce and supply renewable hydrogen to hydro, shell and the broader market from locations in Europe. The intention is to expand into additional regions and locations over time. Replacing natural gas for heating purposes and aluminum production with renewable hydrogen will contribute it to Hydros global commitment to reduce its greenhouse gas emissions by 30% by 2030. In a quote from Arvid Moss, Hydro Executive Vice President for Energy, hydro looks to green hydrogen as a way to reduce our aluminums carbon footprint even further, as well as a business opportunity on its own merits in the ongoing decarbonisation of the economy.
Hydro Havrand, can leverage a broad set of competencies within hydro, and through its total offering help other industrial players succeed in their energy transitions. And according to Elisabeth Brinton, Shell’s Executive Vice President for Renewables & Energy Solutions, hydrogen will play a key role in decarbonizing hard to electrify sectors, which is vital for accelerating progress toward a net zero emissions future. By leveraging each other's strengths and capabilities, hydro Havrand and Shell can work toward a shared goal of establishing integrated hydrogen value chains, and ultimately a strong global market for hydrogen. So another interesting joint project announcement. And what makes this announcement really interesting is the application of hydrogen for hydro. It's no secret that heavy industries such as cement and metals, usually steel, but in this case, aluminum are one of the largest concentrations of co2 emissions in the world.
And the announcement of hydro and shell to focus hydrogen applications to decarbonize their aluminum industry is really big news. And I would not be surprised to see other large energy producers or energy manufacturers, like Shell partner with other industries like cement or steel manufacturing for this similar process. And lastly, another press release, Baker Hughes invests in Ekona Power to accelerate the delivery of a lower carbon hydrogen production solution. Again in a press release on November 9, Baker Hughes, an energy technology company has announced investment in Ekona Power Inc, a growth stage company developing novel turquoise hydrogen production technology. Through its investment Baker Hughes will enhance its broader hydrogen and natural gas decarbonisation solutions portfolio, further contributing to the energy transition. Now for a little background turquoise hydrogen is made from methane using pyrolysis, also known as splitting or cracking Ekona's methane pyrolysis solution uses combustion and high speed gas dynamics in a reactor to separate feedstock methane and hydrogen and solid carbon, drastically reducing carbon dioxide emissions versus the traditional and prevalent steam methane reforming process.
The innovative solution is designed to easily integrate with standard equipment for natural gas and hydrogen applications including carbon separation and hydrogen purification, thus simplifying industrial process integration. The two companies will join forces to accelerate the scale up and industrialization of the technology by identifying suitable pilot projects and leveraging Baker Hughes leading turbomachinery portfolio as well as established technical expertise in providing modular and scalable solutions for global hydrogen and natural gas projects. According to Rod Christie, executive vice president of Turbomachinery & Process Solutions at Baker Hughes, This strategic investment further demonstrates our commitment to advancing new energy frontiers by accelerating the pace at which novel technologies are being brought to market.
Ekona powers methane pyrolysis platform for the production of cleaner and lower cost turquoise hydrogen builds on our growing and diverse portfolio of decarbonisation technologies, including blue and green hydrogen, carbon capture, utilization, and sequestration, and emissions management solutions. Through the adoption of this technology, the industry can leverage existing and abundant natural gas reserves to reduce lower carbon, hydrogen, and accelerate its use across the energy value chain. According to Chris Reid, CEO of Ekona Power, At Ekona we are deeply committed to delivering cleaner energy solutions that cost effectively address industry pain points. Our innovative technology has the potential to produce hydrogen at costs on par with conventional steam methane reformers, while drastically reducing greenhouse gas emissions. In addition, our solution isn't reliant on co2 sequestration, so it has the potential to be quickly and broadly deployed across various industries and market regions.
This important investment from Baker Hughes, who is an established global player is a key step to commercializing our technology. For this Baker Hughes will take an approximately 20% stake in Ekona to help advance new project development and commercialization. Baker Hughes will also assume a seat on Ekona's board of directors Fort Capital Partners acted as advisors to Ekona power. Along with lead investor Baker Hughes Ekona has been supported by numerous Canadian federal and provincial partners, including the BC innovative clean energy fund, National Research Council, Natural Resources Canada, Breakthrough Energy Solutions Canada program, emissions reduction Alberta, the natural gas Innovation Fund, and Pacific Economic Development of Canada.
In addition, BDC capital's clean tech practice invested in 2020, to help fund Ekona technology development program. So a very interesting move by Baker Hughes getting into the methane pyrolysis hydrogen development segment. Now, it's no secret that I really like that particular method of hydrogen development, as I also believe there's a strong developing market for solid carbon sales. Now, one of the biggest drawbacks for turquoise hydrogen is a heavy upfront cost. So it will be very interesting to see what the scientific minds at Baker Hughes can do to lower the upfront costs and increase scalability of this technology.
Alright, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, come and visit me at my website at thehydrogenpodcast.com or email me at email@example.com. 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 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.