Episode 2

Exploring the Hydrogen Economy

The Energy Transition series is comprised of one hour panel sessions involving executives and industry experts dedicated to improving awareness on various elements of the energy transition, as well as identifying investment opportunities for corporate and institutional investors.

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By Biraj Borkhataria, John Musk and guest speakers
Published September 21, 2021 | 3 min watch
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Key Points

  • What sectors is hydrogen set to play a key role in?
  • What is the growth opportunity, and when is it likely to become a viable business?
  • Does the colour of hydrogen matter?
  • What are the key obstacles for the Hydrogen economy in the coming years?

Although it currently plays a minimal part, in the future hydrogen looks set to play a key role in a cleaner economy. As part of the European Green Deal, the European Commission has published targets for hydrogen, including 40GW of electrolyser capacity in the EU by 2030. To discuss hydrogen’s potential, RBC Capital Markets invited Andy Brown, ex-Shell, Head of Upstream now CEO of Galp, Grete Tveit, SVP & Head, Low Carbon Solutions, Equinor, and Thorsten Herbert, Director Market Development & Public Affairs, Nel Hydrogen.


Four Key Takeaways:  

Momentum for hydrogen is building

“We’ve had lots of ups and downs but currently this is different from other ‘ups’,” notes Thorsten Herbert of Nel Hydrogen. While before the ‘ups’ were driven by transport - only to decide at the time that efficiency was too complex and the infrastructure too costly - now it seems that finally the benefits of hydrogen for renewable energy systems are understood. He thinks the European Commission published the EU Hydrogen Strategy together with the Energy System Integration Strategy shows an understanding of the key role of hydrogen currently in a renewable energy system. “The ambitious international climate targets are forcing hard-to-change sectors such as industry, chemistry, refineries and transport - including ships and planes - to find solutions now and hydrogen is the only promising option. Finally, due to the existing climate emergency, big oil & gas companies are also looking into new green business opportunities and looking at hydrogen solutions.”

A hydrogen future requires a collaborative approach

Reminiscing about setting up Shell Hydrogen in 2000 only for it to fold after a number of demonstration projects, Andy Brown, ex-Shell Head of Upstream, thinks it was too early. “This will only happen if all the players in the value chain come together, from the generators of hydrogen and users, underpinned with government policy and regulations. A lot of these things were not in place.” As the momentum for energy transition is happening, we’re back into hydrogen again - whether it’s green or blue hydrogen. “There’s a lot of adjacency between what a lot of companies are doing in hydrogen because of blue hydrogen, or infrastructure, or owning the client relationship and when they put the capital behind it, it will accelerate.”

Hydrogen forms part of a good business strategy

“Equinor has a living position in carbon efficient operations generally and is very proactively pursuing climates carbon goals, both towards 2030 and beyond, says Grete Tveit. “Our first goal is to have an upstream CO2 intensity below 8k per barrel produced by 2025 - and today we are at nine. The average for the industry is double. Going forward we have an ambition to have carbon neutral operations and zero methane ambition by 2030. Our third goal should see absolute greenhouse agas reduction of 40% by 2030 and near zero emissions by 2050. We will reduce net carbon intensity by at least 50% by 2050. Is this a good business strategy? Yes, it’s not taking the responsibility of others, we believe this is strengthening our competiveness and presents attractive business opportunities.” This will be achieved through operational efficiency in oil & gas, CCS and hydrogen. She thinks CCS is a prerequisite for green hydrogen, hence the joint Northern Light Project, the first flexible CCS project where CO2 can be captured and stored in different locations and support CO2 to hydrogen. Other projects include a bunker vessel to transport hydrogen in a liquid form, industrial applications such as steelmaking where hydrogen replaces coal, and the Zero Carbon Cluster in Humber where Equinor and 11 other organisations submitted a joint proposal to create a cluster in the UK’s largest and most intensive carbon region. Until then, she believes we will need both blue and green hydrogen.

Aviation could be an early adopter

Consumers are becoming really conscious of CO2, stresses Andy Brown, who believes that once aviation, a sector which grows 4% a year, adopts hydrogen it could then accelerate fast. “A hydrogen system - fuel cell system or compressed hydrogen - compared to batteries is 4 or 5 times lighter. It’s also really energy dense at 33 k/h per kg vs 13 for gas. Storage is the issue.” However, with hydrogen solutions cheaper than conventional engines due to their lower fuel costs, maintenance, and more durable fuel cells, some small companies are looking to commercialise hydrogen places in the next couple of year, amid political momentum thanks to the UK government Jet Zero and EU Aviation initiatives. “Airbus recently revealed by 2025 there will be three new hydrogen planes. The big boys are following suit.”

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