March 03, 2022 • Paul Rodden • Season: 2022 • Episode: 95
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In episode 095, Goldman Sachs talks the hydrogen market, Phillips 66 gets into the hydrogen refueling game, and a big announcement from the Rocky Mountains in the United States on hydrogen. All of this on today's hydrogen podcast.
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Goldman Sachs talks the hydrogen market, Phillips 66 gets into the hydrogen refueling game, and a big announcement from the Rocky Mountains in the United States on hydrogen. 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, and welcome to the hydrogen podcast.
In an article from cnbc.com. Anmar Frangoul writes, hydrogen generation could become a trillion dollar per year market according to Goldman Sachs. Hydrogen has an important role to play in any transition to net zero and its generation could develop into a market worth over $1 trillion a year, according to Goldman Sachs, and a quote from Michele DellaVigna, the bank's commodity equity business leader for the Europe, Middle East and Asia region. If we want to go net zero, we can't do it just through renewable power. We need something that takes today's role of natural gas especially to manage seasonality and intermittency, and that is hydrogen. Hydrogen has a diverse range of applications and can be deployed in a wide range of industries. DellaVigna continues by saying it's a very powerful molecule, we can use it for heavy transport, we can use it for heating, and we can use it for heavy industry.
The key he argued, was to, quote produce it without co2 emissions. And that's why we talk about green and why we talk about Blue hydrogen described by the International Energy Agency or IEA. As a quote versatile energy carrier, hydrogen can be produced in a number of ways. One method includes using electrolysis with an electric current splitting water into oxygen and hydrogen. Electricity is used in this process comes from renewable sources such as wind or solar, then some call it green or renewable hydrogen. Blue hydrogen refers to hydrogen produced using natural gas, which is a hydrocarbon with the co2 emissions generated during the process captured and stored. There has been a charged debate recently around the role of blue hydrogen can play in the decarbonisation of society. Again, according to DellaVigna, whether we do it with electrolysis, or we do it with carbon capture, we need to generate hydrogen in a clean way. And once we have it, I think we have a solution that could become one day at least 15% of the global energy markets, which means we'll be over a trillion dollar market per year.
And that's why according to DellaVigna, we need to focus on hydrogen as the successor of natural gas in a netzero world. Now DellaVigna's comments echo the analysis in a recent report from Goldman Sachs research, which he co authored, published earlier this month. The reports bull scenario sees hydrogen generations total addressable market having the potential to hit more than $1 trillion by 2050, compared to around $125 billion today. Okay, so a very brief discussion from Goldman Sachs. And really what this is in reference to is the carbonomics report released by Goldman Sachs on February fourth of this year. The 123 page report beautifully details Goldman Sachs thoughts around the hydrogen market and I would encourage anyone who's interested in this report to definitely take a look at it.
Next in a press release from February 7, Phillips, 66 and H2 Energy Europe to develop hydrogen refueling network in Germany, Austria and Denmark. On February 7 of 2022, Phillips 66 and H2 Energy Europe announced their commitment to develop up to 250 retail hydrogen refueling stations across Germany, Austria and Denmark by 2026 through a 50 joint venture between their subsidiaries Phillips 66 Limited and H2 Energy Europe AG. The agreement is subject to regulatory approvals and customary closing conditions. Phillips 66 Limited is a UK based wholly owned subsidiary of Phillips 66, a diversified energy manufacturing and logistics company, Phillips 66 has a strong retail presence with more than 1000 jet branded stations in Europe and a growing hydrogen refueling network in Switzerland. Through its participation in the Coop Mineraloel AG joint venture, Swiss headquartered H2 Energy Europe is a joint venture between commodity trading firm Trafigura and h2 energy Holding AG a leading hydrogen provider in Europe with investments in the production, distribution and utilization of green hydrogen. Through its affiliated companies. H2 Energy was the first to develop and deliver hydrogen fuel cell trucks to commercial users and create green hydrogen fueling ecosystem in Switzerland.
According to Rolf Huber, founder of h2 energy we consider hydrogen and fuel cell technology an enabler of the energy transition buffers excess electricity production and stores and distributes energy that has been produced by renewables. The European subsidiaries of Phillips, 66 and h2 energy will leverage their capabilities to develop a retail network, bringing together hydrogen supply refueling logistics and vehicle demand. The party's aim to supply the retail refueling network with green hydrogen as available. Demand is anticipated in part through h2 energy's ownership and Hyundai hydrogen mobility or retail and distribution partner in Europe for Hyundai's commercially available heavy duty fuel cell electric truck, and according to Brian Mandell Phillips 66, Executive Vice President of Marketing and commercial. At Phillips 66 We believe that expanding access to hydrogen is critical to achieving a lower carbon future.
We're excited to join forces with h2 energy, which has demonstrated success in developing technology assets across the hydrogen value chain. The joint ventures Future Network of hydrogen refueling stations in Germany, Austria and Denmark will comprise existing jet branded retail stations, as well as new locations on major transport routes. h2 energy will be responsible for integrating hydrogen production supply and the refueling apparatus through its wholly owned and affiliated entities. Government support will be required for the implementation of refueling network HQ Energy recently unveiled activities to build a one gigawatt electrolysis plant in Denmark capable of generating up to 90,000 metric tons a year of green hydrogen from electricity source from offshore wind, or so another great joint venture announcement from two huge players in the energy space Phillips, 66 and h2 Energy Europe. And truth be told, if I were to handpick two companies to partner up for this kind of development, I don't think I could pick a better pair. Both of these companies has some of the strongest track records in their given space, so it's hard to see this announcement as anything but a complete win.
And lastly from AP news.com. Mead Gruver writes Rocky Mountain states to team up on a hydrogen tech proposal. Rocky Mountain states will cooperate on developing ways to make the most abundant element in the universe hydrogen more available and useful as clean burning fuel for cars, trucks and trains. The state's governor's announced Thursday February 24, Colorado, New Mexico, Utah and Wyoming will plan a hydrogen hub to be built somewhere in the region drawing from $8 billion and recently approved federal infrastructure funding for for more such regional hubs in the US. In a joint statement from Wyoming Governor Mark Gordon, and other governors Jared Polis of Colorado, Michelle Lujan Grisham of New Mexico and Spencer Cox of Utah. This coalition represents a shared vision for the future of hydrogen in the Mountain West region. The western interstate hydrogen hub will have facilities in all four states under plans to be submitted to the US Department of Energy.
This according to an agreement signed Wednesday, February 23. Goals will include economic development, and quote the latest science research and technology for cost effective generation transportation, and use of clean hydrogen this again according to the state's agreement, as we know hydrogen can be arrived from water using an electric current, and when burned emits only water vapor as a byproduct. The fuel could theoretically reduce greenhouse gas emissions, and air pollution depending on how it's obtained. As with electric vehicles, however, hydrogens potential has been limited by infrastructure. Lack of fueling stations limits the market for hydrogen fuel vehicles, few hydrogen fueled vehicles limits investment in producing and moving hydrogen in New Mexico, Lujan Grisham, who's a Democrat has amid criticism pushed aggressively to attract private investment and federal dollars for hydrogen production and distribution. And then a quote from The New Mexico governor. Hydrogen is coming everywhere in the country. My job is to make sure we have the right safeguards and effort. Critics point out that as it's produced now, hydrogen isn't green, carbon free or unlimited. Currently, nearly all hydrogen commercially is produced in the US, which comes from not water but natural gas this according to the US EIA, while advocates say using hydrocarbons to produce hydrogen now can help to develop a clean industry later, but environmentalists are skeptical.
Okay, so some big states in the United States coming together to look towards hydrogen and the hydrogen future. Now I've reported several times about New Mexico jumping into the hydrogen bandwagon. And for good reason, New Mexico is one of the top states in the United States to push for a hydrogen hub and by bringing in Colorado, Wyoming and Utah that gives them an immense amount of leverage to bring a massive Hydrogen hub to that region. Now obviously, the question of where the hydrogen will come from, is a big question. And what I really do like about this situation are the different geographies of the states associated with this deal. You have excellent sources of hydrocarbons for hydrogen sourcing, but you also have great renewable electricity potential in the entire region, both by wind and solar. And you also have in some places a decent amount of water to use as your feedstock. So I really do see this as a great opportunity for the two sides of hydrogen debating to come together and move the hydrogen industry forward.
Alright, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, come 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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