Environment Analyst’s recent webinar saw international policy makers and industry figures discuss strategies needed to unlock a green hydrogen economy.

 

Green hydrogen looks set to dominate hydrogen production by 2030, and will play a key part in the energy transition. But the twin tasks of building new infrastructure and expanding underground storage will be pivotal to ensuring this is the case. With this statement, Brian McCarthy, WSP’s national hydrogen lead, introduced the second in a series of Environment Analyst webinars on the energy transition.

 

“We’re at the very beginning of the curve in terms of technology adoption but private capital will get things moving,” said McCarthy. Chairing the event, McCarthy brought together participants from both sides of the Atlantic to discuss international drivers and developments affecting the hydrogen market to date.

 

One major priority, said McCarthy, is that investors have the confidence that business plans for hydrogen projects “are complete from end to end”. 

 

WSP, a global leader in energy infrastructure development, helps clients in the production, storage, distribution and utilisation of clean hydrogen.

 

Joining the dots

 

Panellists agreed that green hydrogen projects needed to “join the dots” to facilitate both consistent supply and demand for the fuel and to ensure that hydrogen meets projections for its role in the transition. 

 

“We need to bring down costs, scale up projects and achieve a faster rollout to get us where we need to be,” said Celia Greaves, CEO of the Hydrogen Energy Association. “We have to make buying and using hydrogen more attractive than the alternatives,” she added.

 

A recent Global Energy Perspective report by McKinsey & Co projects that industry will drive most of the clean hydrogen uptake up to 2030, after which new applications, dominated by different forms of transport and industrial heating, will come into their own. The report identifies a lack of clarity in government support for new applications — e.g. for aviation — as accounting for uncertainty in demand for the fuel. A symptom of this, noted panellists, was the need for earlier offtake commitments from customers to ensure the viability of specific hydrogen projects.

 

“Less than 10% of projects have offtakes which are firm enough to make them bankable” said Rebecca Masermule, chair of the International Partnership for Hydrogen, which represents 24 countries on all continents. This was making life challenging for private sector investors, she said, and there was a need for more green clusters to bring costs down and pave the way for a permanent hydrogen distribution and storage network.

 

The UK, with an already emerging network of clusters, could claim to be “ahead of the game,” panellists agreed. One such, said Joe Seifert of the hydrogen producer EET Hydrogen, is HyNet North West where the company is playing its part in developing an infrastructure to produce, transport and store low carbon hydrogen across the North West and North Wales. “The biggest challenge is not technical. It’s who pays and how they pay,” said Seifert. “Once you’ve developed a hydrogen pipeline with storage facilities, it completely reduces the risk of being a producer.”

 

David Watson, head of energy transition at the gas distribution company Cadent, said his company had embarked on a huge programme to repurpose existing infrastructure in the UK, replacing old cast-iron pipes with hydrogen-ready plastic alternatives. The Cadent mission is to develop a network of some 200km of pipes to facilitate the safe storage and distribution of clean hydrogen. 

 

Clusters like HyNet 1 are important platforms from which industry can come together and lobby government, said Watson, but now is the time for joined-up delivery. With the right infrastructure in place, investors would be ready to take out final investment decisions (FIDs) right across the value chain.

 

It’s the grid, stupid

 

Panellists agreed on the need for government support to kick-start a scaled-up hydrogen economy. While in the US, the prospect of an election had arguably slowed private sector investment, initiatives such as the 45V tax credit were still important incentives to develop clean hydrogen projects, said Roxana Bekemohammadi, founder and executive director of the Green Hydrogen Alliance. The downside, certainly in the US, she said, is lack of access to the grid, one of three pillars of the US hydrogen market, the other two being incrementality and additionality. 

 

“It’s created a lot of havoc in the market and we are hoping it will be mitigated soon,” Bekemohammadi said. Mitigation, when it arrives, is underpinned by some $22.5bn of allocated government support and a further $13.5bn in tax breaks.

 

Dr Bill Tumas from the National Renewable Energy Lab in the US said that in terms of systems integration, manufacturing and indeed recruitment there were lessons to be learned from the solar energy market. “It’s a question of how fast we can go in areas like grid innovation and power economics, which are just as important as producing more electrolysers for hydrogen production.” The value of renewable energy went beyond cost, he said. Carbon reduction and long term energy resilience were both key factors.

 

Powering the transport sector

 

The Felixstowe Green Hydrogen project was presented at the webinar as an innovative and fully integrated example of the role green hydrogen could play in the heavy duty transport sector. ScottishPower, part of the Iberdrola Group, is developing a £150m green hydrogen plant at the Port of Felixstowe, a highly successful container port on the UK’s east coast. The facility is being developed to produce low cost green hydrogen to power the port’s transport users, said the company’s head of hydrogen Mark Griffin. “Heavy duty transport is a key market for green hydrogen,” he said. “It’s about being able to support different forms of transport without having to build a stand-alone project.”

 

Some 6000 trucks go in and out of the port every day and there is the potential to create a national roadmap as the 100 MW project scales up to its full potential, said Griffin. Trucks, freight trains and even hydrogen-powered container ships could all be refuelled via the company’s centre of port facility. Iberdrola had allocated €3bn for investment in green hydrogen projects over the next 10 years and there would be significant production in place at Felixstowe by 2032.

 

All panellists agreed that there is a requirement for a more connected energy system in which hydrogen, supported by government incentives and renewed investor confidence, could play its part.