On Wednesday 26 January, Glennmont Partners from Nuveen held a webinar session titled ‘Hydrogen realities: Applications and potential’ with speakers including:
Associate Director at Arup, Nick Ash
Manager at Baringa Partners, Shane Heffernan
Chaired by Glennmont CFO, Francesco Cacciabue the webinar discussed the potential of low carbon hydrogen, its applications, costs, the policy landscape, and case studies of ongoing hydrogen projects.
Shane Heffernan, Manager at Baringa Partners, began by saying how hydrogen has only come onto the scene as a viable clean energy alternative in the last few years. He described the different types of hydrogen, the production processes for each, and their uses in making high energy density fuels such as ammonia, E-methanol, or E-kerosene. He also pinpointed feedstock, transport, flexible power supply, and building and industrial heat as potential use cases for low carbon hydrogen.
In terms of the cost of hydrogen, he acknowledged green hydrogen is currently more expensive than fossil fuels. This is due, he noted, to the energy required for electrolysis as well as a high industry CapEx. He relayed an expectation that these would fall, but for low carbon hydrogen to be viable, higher carbon pricing plus hydrogen subsidies are needed, to the tune of $50-200 per tonne.
Despite this, he noted global hydrogen demand is predicted to quadruple by 2050, though much of this will depend on availability of biomass as well as the expected fall in price. He placed Australia, Chile and Gulf States as key future exporters, as they have potential for cheap and abundant renewable electricity generation. Europe, Japan and South Korea are seen as future large-scale importers, with China and the US potentially swinging either way. He described the huge infrastructure changes that will be needed to facilitate hydrogen adoption – 2-3.5TW of renewable capacity on top of decarbonising power systems, then the required electrolysis and transport systems. Finally, he outlined the need for a CFD equivalent for hydrogen, increased social acceptance, and support for industries switching from coal. He also envisaged future supply chain risks, due to materials needed for electrolysers only being found in a few places such as South Africa.
Nick Ash, Associate Director at Arup, ran through technological considerations from an investor’s perspective. He highlighted pyrolysis as a new form of creating clean hydrogen but put his focus on green hydrogen. He pointed to the benefit of hydrogen as a clean way of managing energy supply fluctuations by balancing supply and demand.
In terms of the green hydrogen supply chain, he laid out the 4-stage process of renewable energy generation, hydrogen production, transport and storage, then end use. He made the point that future investors in hydrogen will need to decide how much of the process they invest in, especially as the green hydrogen market is emerging so quickly, and has an uncertain landscape around policy intervention and supply chain security.
He then looked at case studies of Arup’s work on advising around hydrogen powered vans, and a proposal for a large-scale hydrogen production plant on the edge of the Namibian desert. For the former, he elucidated challenges around installing hydrogen refuelling infrastructure, while for the latter, he noted how the prevalence of wind and solar power on the edge of the desert make it an ideal location for a hydrogen production facility.
October 4, 2022