Page 5 - Euroil Week 32 2021

EurOil COMMENTARY EurOil
“Blue hydrogen is a low-carbon and commer- cially accessible technology, and we should not pander to the ‘green only’ ideal; we need real- ism, not idealism, to solve the energy transition conundrum,” Xodus continues. “To that point, schemes that consider making hydrogen in the UK and selling direct to Europe should not be as encouraged as schemes that provide hydrogen to the UK and then the continent.”
Based on forecasts by the independent Cli- mate Change Committee (CCS) in its Balanced Net Zero Pathway, the UK will be producing 213 TWh or 5.4mn tonnes per year (tpy) of hydro- gen by 2050. And if all this hydrogen were blue, it would be produced using 2.32bn cubic feet per day (24bn cubic metres per year) of gas, at a cost of $1.50-2.40 per kg of the fuel. In contrast, green hydrogen from offshore UK wind would cost $2.5-8.0 per kg to produce, and while the expenses will fall, its levelised cost will still be around $2.6 per kg in the early 2030s, versus $1.0 per kg for blue hydrogen.
It would also be a challenge to produce the same amount of green hydrogen, requiring some 33 GW of dedicated green electricity supply. Considering the local capacity of UK offshore wind, this would require some 61 GW of wind turbines.
As stated, the UK has the potential to produce 150 GW of wind capacity, but the CCC envis- ages that only 95 GW will be up and running by 2050. Taking into account that amount that will be needed to decarbonise the power grid as well, this means green hydrogen supply will very likely fall short.
Furthermore, the locations where wind tur- bines can be installed are often far removed from the main potential demand centres for hydro- gen, mostly in the south and the midlands. The onshore grid is already struggling to deal with the large influx of wind power, and would be more constrained having to handle the future projected supply.
Still, Xodus stresses it is nevertheless sup- portive of green hydrogen, and notes the syn- ergies that can be created by promoting green hydrogen with blue hydrogen projects. They can share infrastructure, and local consumers ben- efit from choosing between two sources of sup- ply, depending on whether natural gas or wind power is cheaper at the time. From a technical point of view, green hydrogen production also releases oxygen that can be used to improve the efficiency of blue hydrogen production.
Projects underway
Companies are already working on a series of blue hydrogen supply projects. BP notably revealed plans in March to build a 1-GW blue hydrogen production plant in Teesside in north- east England. The facility is expected to contrib- ute 20% towards the UK’s target for hydrogen supply by the end of the decade.
BP reported on August 5 that it had signed memoranda of understanding (MoUs) with possible customers for the plant. One deal was signed with the UK’s CF Fertilisers, which wants to use the fuel to decarbonise operations at its plant in Billingham. Another potential buyer is Japanese group Mitsubishi, which is looking to use hydrogen at its methyl methacrylate plant in Teesside. Singapore’s Sembcorp also wants to tap BP’s supply for its heat and power stations and other facilities at the Wilton International indus- trial park in Teesside.
At all these facilities hydrogen will replace the natural gas that is currently used. BP also signed a fourth MoU with Saudi Arabia’s Alfa- nar, which wants to build a new waste-to-avi- ation fuel plant in Teesside that would run on hydrogen. Earlier the company also signed MoUs on hydrogen supply with Venator, a major producer of titanium dioxide pigments and performance activities, and gas distributor Northern Gas Networks.
“Teesside has all the attributes of a world- class clean hydrogen hub – the right natural resources, concentrated demand, potential for hydrogen storage and pipelines, ample access to carbon capture utilisation and storage (CCUS) and the right skills base,” BP’s senior vice pres- ident for hydrogen and CCUS, Louise Jacobsen Plutt, said in a statement.
BP’s hydrogen plant is one of a number of pro- jects that comes under the Net Zero Tesside ini- tiative, which also involves Eni, Equinor, Royal Dutch Shell and TotalEnergies and many other commercial enterprises. The expected 2mn tpy of CO2 from the facility is set to be stored under the North Sea.
Another notable blue hydrogen project in the UK is Acorn. The initiative is backed by clean energy developer Storegga, with Shell and Har- bour Energy serving as equal-equity partners. It will store 5-6mn tpy of CO2 offshore, from not only its own blue hydrogen plant but also third- party industry. ExxonMobil and Ineos signed preliminary deals on becoming customers for the CO2 storage in July. ™
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