March 14, 2022 • Paul Rodden • Season: 2022 • Episode: 98
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Welcome to The Hydrogen Podcast!
In episode 098, The world’s largest green hydrogen hub is coming to Texas. I’ll dive into the press release and give you my two cents on the project. All this on today’s hydrogen podcast.
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Transcript:
The world’s largest green hydrogen hub is coming to Texas. I’ll dive into the press release and give you my two cents on the project. All 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 on March 3, Green Hydrogen International has unveiled plans to create the world’s largest green hydrogen production and storage hub in South Texas Hydrogen City, Texas will be an integrated green hydrogen production storage and transport hub growing to 60 gigawatts in size and producing over two and a half billion kilograms of green hydrogen per year. The project is centered around a hydrogen storage facility and the Piedras Pintas Salt Dome located in Duval County. Pipelines will deliver the green hydrogen to Corpus Christi and Brownsville where it will be turned into green ammonia, sustainable aviation fuel and other products or delivered by pipeline directly to hydrogen power plants and other users around the state.
The project will be powered by 60 gigawatts of behind the meter solar and wind power with additional renewable energy drawn from the ERCOT grid during periods of low prices. According to GHI’s founder and CEO Brian Maxwell hydrogen City is a massive world class undertaking that will put Texas on the map as a leading green hydrogen producer. Texas has been the world leader in energy innovation for over 100 years and this project is intended to cement that leadership for the next century and beyond. The project will be built in phases and the first phase is expected to commence operations in 2026, consisting of two gigawatts of production and two storage caverns at the Piedras Pintas salt dome. Access to salt storage is critical to the scaling up of green hydrogen production, as it allows for maximum utilization of electrolyzers and serves as a buffer between variable wind and solar production and final delivery of green hydrogen to customers. Eventually, over 50 caverns can be created at the Piedras Pintas salt dome, providing up to six terawatt hours of energy storage and turning the dome into a major green hydrogen storage hub.
Similar to the role Henry Hub plays in the natural gas market. Negotiations are ongoing with respect to in use options for GHI produced green hydrogen, but these operations include green ammonia for export markets, GHI is exploring the opportunity to export green ammonia to Asia. Japan’s Ministry of Economy, Trade and Industry METI plans to add 30 million tons per year of renewable ammonia to the country’s fuel mix by 2050. Again, according to Maxwell, Japanese and Korean companies are interesting partners for us in this project given their country’s desire to shift to green ammonia, there’s also green ammonia for the fertilizer market. Higher natural gas prices has led to skyrocketing fertilizer costs for farmers. Fertilizer produce from Green hydrogen can help remove unexpected price volatility. There’s also sustainable aviation fuel GHI is in discussions with potential oft acres of green hydrogen as a feedstock for sustainable aviation fuel or SAF GHI believes Corpus Christi is well placed to become a major SAF production hub. There’s also sustainable rocket fuel. The company is looking at combining hydrogen with co2 at the border of Brownsville to create a green methane rocket fuel for launch operations in South Texas. And lastly, they’re looking at fuel switching power plants.
Hydrogen can also be used as a natural gas substitute at power plants. Over four gigawatts of new gas power plants have been proposed in the US that can burn a combination of hydrogen and natural gas. The plans for hydrogen city are large enough that eventually the project could supply multiple types of customers. Again, according to Maxwell, we see hydrogen city becoming one of the largest hydrogen production centers in the world, supplying many different customers with 100% Clean hydrogen fuel. Now according to a top global consulting firm, the market growth for hydrogen will be enormous. A recent sector report estimates annual global sales for hydrogen and related technologies at two and a half trillion dollars a year by 2050. And a quote from Andy Steinhubl, a former McKinsey Senior Partner and GHI board member hydrogen City is a project perfectly positioned near low cost renewable resources plenty of available land salt domes, and proximity to the large energy port of Corpus Christi, it will be a world cost leader and position GHI to take advantage of the growing demand for green hydrogen, Australian based renewable energy developer Energy Estate is assisting GHI on the development of hydrogen city.
Okay, so what are my two cents on this press release? Well, the numbers that GHI are throwing around are monstrous. 60 gigawatts of power is unbelievable. And two and a half billion kilograms of green hydrogen is unheard of. Now, if you’ll notice what this press release doesn’t say, is the technology that they’re going to use to create the hydrogen. Now they’re saying green hydrogen. So most of us would think that it’s electrolysis, but it may not be. There are several other technologies coming out now that are calling themselves green, that don’t use that platform to generate the hydrogen. Now, that being said, on their website, they do talk about electrolysis being a primary method they use to generate hydrogen. So that could be it. And if so, that really makes me wonder where they’re going to get this much water to create that much hydrogen. And it’s not just going to be a water supply issue. But an electrolyzer issue, the industry is already being faced with a supply shortage of electrolyzers. And so what I imagine is happening is that GHI is already looking to be the primary buyer from a particular company on their electrolyzers.
And also to say that right off the bat, they’re going to be producing two gigawatts by 2026. That’s a bold claim and a big number to release at the kickstart of a project like this. Now, do I think that can be done? Absolutely. With enough planning and forethought, that can be done. And one of the reasons why I do think it’s possible is that this announcement takes into account something that a lot of announcements don’t, and that’s off taker opportunities. Now, with everything going on politically, in Europe, right now, sustainable fuels need to be talked about more and more, especially with the intense ramp up of prices that we’ve seen in the last week, and also to discuss their storage plans. I think it’s a slam dunk, there are so many salt domes in the Gulf of Mexico, that they will find zero problems finding any place to store excess hydrogen. And so if we put supply economics aside, what we should also focus in on are the politics in the US surrounding projects like this, as well as the economics of the project itself. So right now, the current establishment in the United States is very supportive of projects like this. And globally, I think there is a big welcoming of this type of energy source. So the question then is, can they identify enough global off takers to support a 60 gigawatt infrastructure? Now, obviously, Europe is going to be high on their list of off taker opportunities.
But that being said, Europe is so far ahead in hydrogen and the strategic development necessary to develop a hydrogen infrastructure, Europe is quite a bit more advanced than the US. So then where could potential off takers be? Well, Japan is looking to Australia right now, and next to the Middle East. That being said, the next opportunities could come into play in South America or Africa. And so now, if we put politics aside, what we really need to focus in on then, is economics. How feasible is this project? Now, initially, they’re talking about a two gigawatt facility that in and of itself, is really big. Now, neither this announcement, nor their website mentioned any kind of investor opportunity, or current investors within the company, outside of energy estate in Australia, and this project will need multiple billions of dollars to get launched. Now, could that happen in the next four years? Well, it’s possible. But without any firm numbers, I just don’t know. Now, it may sound like I’m negative on this project.
And I’m really not. I’m very much for this kind of project, not just in Texas, but California. And the rest of the world. I’ve said this before, and I’ll say it again, we are entering into the next Wild West of energy opportunities. And I think it’s very easy to look at hydrogen as the next oil boom. So even if this project launches in 2026, with two gigawatts of capacity, there is still so much more room for other developers just in the state of Texas. And that setup is the same globally. And so with that being said, I really do wish Brian Maxwell and the green hydrogen International Corporation, great success with this project. I really do hope it gets off the ground as soon as they state that it will.
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 info@thehydrogenpodcast.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.
