'Vorsprung durch Grün'?

Unless you’ve been hiding under a rock this week (and who knows, this may yet form part of the UK’s ever-changing ‘lockdown’ guidance), you may have noticed a certain G7 member and one of the world’s biggest economies weigh into the hydrogen strategy arena.

Yes, on June 7th, Natural Resources Canada confirmed that it is “developing a national hydrogen strategy” - though it “does not have an expected release date”. 

Ah, maybe not that one.

Luckily, Germany was busy with its own much-awaited hydrogen strategy launch. For money-counters, this promised €9bn of spending on hydrogen, the majority of which will go on the low carbon production of this handy gas. 

Needless to say, this spending splurge isn’t all about being nice to polar bears. A key aim of the strategy is to "strengthen the German economy and secure global market opportunities for German companies": in short, jobs and exports.

Perhaps the most eye-catching element of the strategy was the statement that “only hydrogen produced on the basis of renewable energies ('green' hydrogen) is sustainable in the long term”.

In the shorter-term, by 2030, the aim is for enough new renewable power capacity to enable "green hydrogen production of up to 14 TWh”. This is still only around 25% of current hydrogen usage in Germany. So to make up the gap, big money (€2bn) is also earmarked to help develop green hydrogen capacity overseas: that background hum isn’t your ears, it’s the sound of distant cheering from Morocco.

Germany’s long-term green hydrogen focus suggests that ‘blue’ hydrogen (and variants) can expect to be ejected from the disco by bouncers when the party really gets going. Nevertheless, there was recognition that to make up the numbers in the short-term, blue (imports) will be needed too.

Whether such crumbs of comfort will encourage large-scale investment in blue hydrogen remains to be seen. Nevertheless, there has already been talk of countries such as Scotland grasping the opportunity to supply.

There, Petrofac’s Engineering and Production Services (EPS) business announced the award of a support contract to further develop one such project. The Acorn project “holds the first UK CO2 appraisal and storage licence to be awarded by the Oil and Gas Authority”. It is looking to reform North Sea gas to hydrogen - with associated carbon capture and storage infrastructure “in the mid-2020s”.

Another important aspect of the German hydrogen strategy was the expectation that the "initial increase in demand for hydrogen is expected to occur particularly in the industrial sector (chemicals, petrochemicals and steel)”.

As if to emphasize the point, Germany energy giant RWE helpfully announced plans to supply green hydrogen to steelmaker thyssenkrupp’s Duisburg facility “by the middle of the decade”, from a 100MW electrolyser. That would meet around 70% of the steel-maker’s requirements.

It wasn’t just in Germany that green hydrogen was being fêted.

Renewable energy powerhouse Enel announced that it was “actively looking for opportunities to co-locate electrolysers with its vast onshore wind and solar fleet” (12.6GW and 4.7GW respectively). Plants in Chile, Spain and the US were likely first-adopters. Adding even more colour-preference than the Germans, a senior executive went as far as describing any hydrogen not produced from renewables as “a trick”. Ouch!

In Australia, which these days is always a good bet for some “mine is bigger than yours” hydrogen news, there was a plan by Austrom to deploy 3.6GW of solar-plus-storage in Queensland. This gigantic ‘Pacific Solar Hydrogen’ scheme aims for “the production of 200,000 tonnes of green hydrogen per year” with plans for “the port-side location to export to Japan, South Korea and others.” 

As with all such mega announcements, the devil is in the detail – and the detail is… scarce. Thus far the developer has got as far as “commissioning environmental and irradiation assessments” and “approaching key industry stakeholders”.

Still, all this talk of a green-dominated hydrogen future must be music to the ears of electrolyser manufacturers, such as ITM Power. 

Despite some covid-related disruption, they reported “a record pipeline of ￡21.8m in committed contracts (up 24% since January), with ￡30m more in active negotiation”. Indeed its partnership with Linde also has a “pipeline of tender opportunities amounting to ￡263m”. To meet growing demand, ITM is currently completing a new 1GW capacity factory here in the UK, “which it claims will be the world’s biggest electrolyser plant” when ready at the end of this year.

With all this positive news, in the same week as Germany’s strategic tilt firmly towards green hydrogen, ITM’s share price naturally… er… “fell more than 10% on the results”. 

No? Me neither.

Meanwhile over in the US, Trevor Milton, Founder and Executive Chairman of hydrogen-truck venture Nikola, had no such worries. After the company’s listing on the Nasdaq on June 4th, he saw his stake rise to over US$ 8 billion just a few days later. 

That’s almost enough to buy yourself an entire German hydrogen strategy.

This of course despite the fact that, in contrast to ITM, his company doesn’t actually sell anything yet. They do claim “over $10 billion in pre-order reservations” though, and “expect to generate revenues by 2021”. (Ironically that first date sees the rollout of a battery-powered truck, with hydrogen fuel cell vehicles due to follow in 2023).

Finally, regular readers will recall that Norway was centre stage in last week’s news review.

Keen to keep up the momentum, industry consortium Norsk e-Fuel duly announced a plan for “Europe’s first commercial plant for hydrogen-based renewable aviation fuel” using “electrolysis, renewable energy, water and CO2 captured from the air”.

The timescales seem bold: “10 million litres a year in 2023 before being expanded to 100 million litres before 2026”. Naturally, there was no mention of cost-competitiveness against existing aviation fuel.

But hey, what do I know?

By next week their founders may all be billionaires.

The Week in Hydrogen is the weekly analysis service produced by Dr John Massey for the Premium Members of the World Hydrogen Leaders platform. Subscribe to join 350+ senior executives who are already benefitting from this networking and digital content delivery platform.