December 06, 2021 • Paul Rodden • Season: 2021 • Episode: 70
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In episode 070, Raven SR with a big acquisition, a big change is looming for the coal industry, and hydrogen could finally be shipped from Australia to Japan. All of this on today's hydrogen podcast.
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Raven SR with a big acquisition, a big change is looming for the coal industry, and hydrogen could finally be shipped from Australia to Japan. 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 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 a press release from Raven SR, a waste renewables Fuel Company. They announced on December 1, the company had acquired Benicia Fabrication & Machine Inc., which will construct several key components of ravens steam co2 reformer system, as the company ramps up to meet increasing demand for green hydrogen and renewable synthetic fuels. BFM which is based in San Francisco Bay Area brings extensive experience in producing pressure vessels, heat exchangers, and other crucial operational equipment for the upstream and downstream oil and gas as well as power and utilities sectors. The acquisition by Raven SR extends BFM's engineering and equipment fabrication capabilities into the renewable fuels sector.
BFM will fabricate the proprietary reactors of the Raven SR systems to be installed in 2022 for waste to energy projects in California, and serve Raven SR's expanding global project pipeline. According to Matt Murdock, Raven SR's CEO, By acquiring an American firm with a record of success in the energy sector, we will reliably deliver our renewable fuels production units to a growing market, companies and consumers are demanding responses to climate change sooner rather than later. And our acquisition of BFM means we can meet the challenge now and mitigate manufacturing disruptions. By acquiring a high quality specialized fabricator moving into the green energy fabrication. Raven will ensure quality control of its production units, maintain competitive pricing of its retail fuels, and manage its equipment supply chain in order to successfully meet project demand. BFM will retain its CEO Carmelo Santiago, who is a professional engineer, and will become vice president of manufacturing at Raven and president of BFM.
As a wholly owned subsidiary of Raven SR. BFM will also continue to serve its existing customers in the refining and utility sectors. And a quote from Santiago becoming a part of Raven SR launches us into renewable energy, giving us the immediate opportunity to join the energy transition. By combining our mechanical engineering know how and Raven SR's chemical engineering advances, we can serve a broader array of customers across the energy spectrum. BFM is also aligned with its customer basis initiatives in clean energy. Its first customers Chevron is also a strategic investor in Raven SR. BFM offers engineering design and fabrication of ASME code certified equipment for all types of industries. It fabricates equipment through final assembly in turnkey fashion and components for original equipment manufacturers, as well as replacement for non OEM components. It also provides a maintenance support for the repair of industrial equipment.
The BFM acquisition comes after Raven SR announced its partnership with Republic Services to site its first California waste to hydrogen production facility at the West Coast Contra Costa sanitary landfill in Richmond, California. Raven SR will convert organic waste with its patented non combustion process to produce green hydrogen to be resold and commercial fueling stations in Northern California to power passenger and heavy duty fuel cell vehicles. Raven SR will break ground in early 2022 at the Richmond location. So great news from Raven SR.
And what this really does signify is the next stage in evolution for the hydrogen industry in the United States that universally this technology is past its demonstration phase has found a market and is now starting to reach that market and acquire new companies to help them do so. So great news from Raven SR and great news for the hydrogen industry. Next, in an article from recharge news.com Andrew Lee writes a titanic pivot from coal to hydrogen could redraw global steel map. The global steel industry is on the verge of a titanic pivot from coal to hydrogen as its main source of energy that could shift the geographical focus of the sector to favor markets with access to abundant renewable power.
This according to Bloomberg Nef, the research group said green hydrogen from renewables has the potential to be the cheapest energy source for steel production by 2050 by when it could account for 31% of the global market with recycled steel processed using clean power set to make up another 45% the market would be unrecognizable from the current 70% domination of steel made from coal fired blast furnaces. According to Kobad Bhavnagri, head of industrial decarbonisation at BNEF said the global steel industry is poised to begin a titanic pivot from coal to hydrogen. Green hydrogen is both the cheapest and most practical way to make green steel. Once recycling levels have ramped up, this transition will cause both great disruption and great opportunity. companies and investors don't yet appreciate the scale of these changes ahead.
A major role for green hydrogen will require the steel sector to invest in new production capacity that's ready for conversion from fossil gas to hydrogen and electric furnaces, both of which require massive amounts of renewable power and shift to the use of higher grade iron ore. This again according to Bloomberg Nef study, decarbonizing steel, a net zero pathway, nations with ready access to both could be poised to strengthen their positions in the steel sector. This again according to the study, citing Brazil, which has said could be producing some of the lowest cost hydrogen by 2030. Along with India, Russia and South Africa, Australia, however, quote currently produces lower grade ores and could lose its number one place in the supply chain if it does not invest in equipment to upgrade its product. The study also notes the critical role of China, which accounts for more than half of the current steelmaking capacity and whose quote, power to lower emissions will set the direction for the industry as a whole, as always with renewable hydrogen cost is a decisive factor.
Bloomberg Nef said the steel industry faces a $278 billion investment bill for the capacity and retrofits needed to make the shift to hydrogen and recycled steel, which it labeled relatively modest in energy transition terms. But the research group said reducing costs of green hydrogen by around 80% to below $1 per kilogram is critical. Bloomberg, Nef added green recycling is also cost effective and immediate solution. Still recycling using 100%. clean electricity would only require a 5% premium to match costs for today's recycled material. By 2050. With a lower clean power costs this premium could shrink to less than 1%. So interesting insights from the Bloomberg Nef study, but I also do wonder how keen their focus was specifically on renewable green hydrogen, was that the only type of hydrogen that they studied?
Or were they just assuming hydrogen with a low CI index? I believe that as time moves forward, that type of identifier is going to be crucial. And also, in regards to the remarks on Australia. I'm curious to see just how important the steel market will be to Australia with their focus so heavily on hydrogen right now, are they willing to lose that steel market share globally, in exchange for taking a heavier share of hydrogen, and lastly, their target focus of $1 per kilogram being crucial if that number is their goal, and not the $2 per kilogram that everyone talks about, then it is going to be considerable time before green hydrogen or renewable derived hydrogen gets to that point. That being said, there are many other low CI hydrogen technologies available that can be used for this purpose.
And again, it's not just the steel industry that can utilize this, but also other heat intensive industries like cement, that can also utilize hydrogen. And while many people have speculated it's going to be 2030 When this happens, I think it's going to happen much sooner. And I really wouldn't be surprised to see this sort of shift happen not by 2030 but by 2025. And lastly, a quick bit of news out of Tokyo, as Kawasaki Heavy, says liquefied hydrogen carrier may leave Japan this month and report from UK Obayashi on reuters.com. The world's first liquefied hydrogen carrier could leave Japan for Australia to pick up its first cargo of hydrogen late this month through the return date has yet to be decided due to COVID-19.
Japan's Kawasaki Heavy Industries said on Friday, December 3, the $353 million pilot project led by Kawasaki and backed by the Japanese and Australian Government's was originally scheduled to ship to its first cargo of hydrogen extracted from brown coal in Australia this spring. It was delayed to the second half of Kawasaki financial year in October to March due to COVID 19 pandemic. According to a Kawasaki spokesperson, it will still depend on the pandemic situation but we think the ship could leave Japan for Australia as early as late this month. Kawasaki Heavy aims to replicate its success as a major liquefied natural gas tanker producer with hydrogen, a key element that may help decarbonize industries and aid in the global energy transition.
In March this year, Japanese Australian venture started producing hydrogen from brown coal and the test project that aims to show liquefied hydrogen can be produced and exported safely to Japan. The Kawasaki spokesperson said the hydrogen carrier Suiso Frontier has been registered by ClassNK, a ship classification society giving it recognition that it complies with International Maritime Organization standards. The schedule for the return journey from Australia is not yet fixed due to uncertainty about the impact of Omicron variant of the Coronavirus. He said, adding a one way trip takes about 16 days. partners on the Australian side of the project include Japan's electric power development company, I Watani Corporation, Marubeni Corp, Sumitomo Corp, and Australia's AGL energy limited, whose mine is supplying the brown coal.
So just a quick takeaway from this news that really what we've been talking about for the last year of Australia, supplying hydrogen to Japan is really starting to take shape. And while this shipment really is more of a demonstration project, it does finally encapsulate all the work that's been put in by Japan, and Australia. Now, what's interesting to note is that this is brown coal derived hydrogen, and not the renewables hydrogen we keep talking about, or that keeps making the news. Now, while I don't have numbers on the carbon intensity of this particular hydrogen, I would assume that the Australian Government does have tight wraps on the carbon intensity of this project. And what this also shows.
And what's important to take note of is really what we've been talking about on this podcast for a few months now. And that's the energy transition part of the hydrogen industry that we can start with a either this coal derived hydrogen or a hydrocarbon based hydrogen to meet the current and near term hydrogen demands, and transition later to electrolysis derived hydrogen as those costs drop.
Well, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, come and visit me at thehydrogenpodcast.com, or you can always email me at firstname.lastname@example.org. I would really love to hear from you. And as always, take care. Stay safe. I'll talk to you later.
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