December 09, 2021 • Paul Rodden • Season: 2021 • Episode: 71
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In episode 071, The BBC talks blue hydrogen in Japan. And Aramco announces some big partnerships. All of this on today's hydrogen podcast.
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The BBC talks blue hydrogen in Japan. And Aramco announces some big partnerships. 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.
Before I get started today, I want to say a quick word about our special interview series. Coming up on Tuesday, I was able to secure an exclusive interview with Bill Smith, the founder of XcelPlus International Bill has a lifetime of experience when it comes to plasma gasification and as applied his efforts to the hydrogen market. We spoke in detail about his waste of hydrogen model, and I definitely had some aha moments. So I hope you'll keep an eye out for this interview.
Now, in an article from the BBC Rupert Wingfield-Hayes writes, climate change is blue hydrogen, Japan's answer to coal, Rupert writes, it's a glorious autumn afternoon and I'm standing on a hillside looking out over Tokyo Bay. Beside me is Takao Saiki, a usually mild mannered gentleman in his 70s but today Saiki-san is angry. It's a total joke he says in perfect English just ridiculous. The cause of his distress is a giant construction site blocking our view across the bay, a 1.3 gigawatt coal fired power station in the making. I don't understand why we still have to burn coal to generate electricity. So Saiki san's friend, Rikuro Suzuki, this plan alone will emit more than 7 million tons of carbon dioxide every year.
Suzuki-sans point is a good one. Shouldn't Japan be cutting its coal consumption, not increasing it at the time of great concern about coals impact on the climate. So why the coal? The answer is the 2011 Fukushima nuclear disaster in 2010, about 1/3 of Japan's electricity came from nuclear power, and there were plans to build a lot more but then the 2011 disaster hit and all Japan's nuclear power plants were shut down. 10 years later, most remain closed and there's a lot of resistance to restarting them. In their place. Japan's gas fired power stations have been doing a lot of overtime. But as Britain has found out recently, natural gas is expensive.
So the Japanese government decided to build 22 new coal fired power stations to run on cheap coal imported from Australia, economically and made sense environmentally, not so much. Japan is now under intense pressure to stop using coal. Instead of closing the old coal plants and switching to renewables. Japan's answer is to switch to burning hydrogen or ammonia. The investment made by electric power companies and coal fired power plants would suddenly be useless without the value in their balance sheet. This is according to Professor Tomas Kaberger, an expert on energy policy at Chalmers University in Sweden, and it would create financial difficulties he continues for electric power companies, and then for banks and pension funds. And that is the challenge for Japan, the plants can be quite easily converted to burning hydrogen or ammonia, neither of which produce any carbon dioxide. So this seems like a good solution.
But Japan's government has a much bigger ambition than that. It wants to be the world's first hydrogen economy. This is where the carmaker Toyota comes in. Now later in this podcast, I'm going to dive in more into Toyota. So I'll skip over what the author says now and focus more in on what Japan is talking about when it comes to hydrogen. The author continues that instead of green hydrogen today, most hydrogen is made from natural gas or coal. That's cheap, but it produces a lot of greenhouse gases. However, if you capture those greenhouse gases, and you bury them in the ground, you're allowed to call it blue hydrogen. This is exactly what Japan says it's going to do. Earlier this year, Japan and Australia opened a joint project in the state of Victoria to turn a type of coal called lignite or brown coal into hydrogen. The hydrogen is then liquefied to a minus 253 degrees Celsius, then piped into a specially built ship which carries it to Japan. What happens to the greenhouse gases produced at the site?
Well, right now they go straight up into the atmosphere. But Japan and Australia are promising that at some point in the future, they will begin capturing the greenhouse gases produced at the Latrobe Valley site and injected into the sea floor off the coast. Climate change campaigners are horrified by this plan. They say the technology to capture and store greenhouse gases is unproven and will lock Japan into digging up vast quantities of brown coal for decades to come. According to Professor Kaberger, the biggest hole in the plan is economic. Technically, he says it's possible but it will always be expensive. Using hydrocarbons with carbon capture and storage will always be more expensive than using hydrocarbons alone. And now in many parts of the world, renewable electricity is already cheaper than hydrocarbons without carbon capture.
Professor Kaberger thinks the Japanese government chose blue hydrogen a decade ago when renewables are still expensive. They're now locked into a plan that no longer makes sense. He says Japanese companies need cheap electricity to be competitive, and they need clean electricity to be internationally acceptable. That means that they need renewable electricity, delaying this development will harm the Japanese economy. In the meantime, on the edge of Tokyo Bay construction continues apace. The giant new coal fired power station will go online in 2023. It's expected to run for at least 40 years. So some interesting insights from the BBC on the energy outlook of Japan. And while I do agree with the professor in this article, that the biggest issue revolves around the economics one, I don't think it's a big hole, but instead of driving force for blue hydrogen, and I'm also not entirely sure why the professor believes that renewables would be cheaper in Japan than hydrogen land in Japan is at the utmost premium around the world, meaning that Japan is not going to be putting in wind and solar farms and is going to have to import their electricity from somewhere else. And whether that's the current situation of coal, or their transition into hydrogen through either hydrogen or ammonia, it's going to have to be imported. And it seems to me that looking into the next half century, importing hydrogen or ammonia is the cleanest, safest way to ensure Japan's energy needs and decarbonize their environment.
Next, in a press release on December 4, the Saudi Arabian oil company Aramco today announced the signing of five agreements with leading French companies including an agreement to explore a hydrogen powered vehicle business with Gaussin, a pioneer in clean intelligent transport solutions. Signing the agreements took place during the event in Jeddah, organised by the Ministry of investment to explore investment opportunities for French companies in Saudi Arabia. The event was attended by H.E. Khalid Al Falih, Minister of the investment of Saudi Arabia, and H.E. Franck Riester, Minister delegate for foreign trade and economic attractiveness of France, along with Aramco president and CEO, Amin H. Nasser. According to NASA, this partnership is a continuation of Aramco's long standing relationship with a number of leading French companies. It represents an opportunity to promote hydrogen as a low carbon solution, not just for motor sport, but eventually for mass transportation as well. Such collaboration helps us to advance economic growth in the kingdom as part of the name our industrial investment program, and takes us a step closer to our shared vision of a more sustainable future.
The agreement between Aramco and Gaussin aims to establish a modern manufacturing facility for on road and off road hydrogen powered vehicles in the Kingdom of Saudi Arabia. As a first step, Gaussin and Aramco will study the feasibility of manufacturing facility and a hydrogen distribution business to serve the Middle East region. The two companies also agreed that Aramco's advanced Innovation Center will be closely involved in Gaussins development of hydrogen powered vehicles, and the development of a remote controlled and autonomous hydrogen racing trucks. Lab seven aims to integrate Aramco composite materials in a Gaussins existing range of products to reduce the weight, energy consumption and cost of the vehicles. Aramco will also be sponsoring the world's first hydrogen fueled racing truck, which has been developed by Gaussin and which will compete in 2022 to car rally in Saudi Arabia. Aramco sponsorship of Gaussin participation in the Dakar Rally continues to promote the low emission transportation technology developments. In addition to Gaussin other agreements were announced, which seek to further Aramco's research and development in the areas of carbon capture technology, artificial intelligence, and local manufacturing. Those MOU's include Air Liquide, which is a non binding MOU to evaluate low carbon hydrogen and ammonia production, logistics and backtracking technology and an additional non binding MOU to evaluate carbon capture and sequestration opportunities.
So Aramco continuing to move forward in the hydrogen space. While the news about Gaussin interesting. The most important part of this is the Air Liquide MOU. And we'll be playing close attention in the near future to see what exactly Air Liquide has in store for Aramco and its hydrogen development. But it's also important not to overlook the Gaussin MOU and I mentioned it before on this podcast, that while it may seem absurd to be investing in racing technology, it's that kind of technology that will eventually trickle down into standard consumer products, making those products more stable, and more reliable.
Alright, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, come and visit me on my website at thehydrogenpodcast.com, or you can always 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.