Page 5 - EurOil Week 30

EurOil COMMENTARY EurOil

Rosatom wants to use
its vast fleet of nuclear
power plants to produce
so-called yellow
hydrogen.

turbine than runs on a mix of methane and expanding the use of renewables. But reducing
hydrogen next year, and study ways over the emissions from gas will move up their priority
next five years of using a methane-hydrogen list over the coming years, jeopardising Russia’s
mix at various gas installations and as a fuel in market share in Europe, which is by far the top
transport. Pilot projects are scheduled to start destination for its gas.
production in 2024. Gazprom estimates that the European hydro-
That year Rosatom, Russia’s state nuclear firm, gen market could be worth €153bn ($178bn) by
aims to launch trial production of yellow hydro- 2050, while Russia’s energy ministry has calcu-
gen. In other words, it wants to generate hydro- lated a more conservative range of $32-164bn.
gen from water using electrolysis, but powering Russia has a competitive edge over other poten-
the process with nuclear rather than renewable tial hydrogen exporters, thanks to its proximity
energy. It is also looking to test-convert trains to to Chinese, Japanese and European markets. It
hydrogen fuel cells on Sakhalin Island. also benefits from having existing infrastructure
in place to transport the fuel in the form of its
An opportunity and a threat pipelines.
Estimates for how large a market for hydrogen Gazprom’s older export pipelines could
energy will emerge vary considerably. The pace pump up to 20% hydrogen and 80% natural gas
of its development will depend greatly on policy without needing modification. But its newer
choices. But the Hydrogen Council, consisting projects such as Nord Stream could carry up to
of BP, Royal Dutch Shell, Total and other inter- 70% hydrogen. It could either produce hydrogen
national companies project that hydrogen could in Russia and then pump it to Europe, or flow gas
account for 18% of global energy consumption to Europe and then convert it into hydrogen at
by 2050. plants there. This option would reduce the cost of
The EU is looking more seriously at hydrogen upgrading infrastructure and potentially allow
development than ever before, after recognising Gazprom to collect EU supply-side incentives.
that electrification alone is not enough to decar- Still, embracing the hydrogen revolution will
bonise its economy. A number of EU members be costly. Japan for instance, which is spearhead-
have also adopted national hydrogen strategies, ing hydrogen development, allocates €300mn
including Germany, currently the biggest buyer of its annual budget for research and develop-
of Russian gas. Outside the EU, Norway has also ment and subsidies on the fuel. Russia, which is
drawn up a strategy, while the exiting UK has starved of revenues as a result of the collapse in
recently set up a national hydrogen council. commodity prices and coronavirus (COVID-
For Russia, as an energy superpower, the 19) economic support spending, is less able to
hydrogen revolution is both a potential oppor- invest in hydrogen than richer nations. Further-
tunity and a threat. more, Russia's government could take longer
EU policymakers have so far focused on the than anticipated to agree on a strategy and intro-
phasing out of coal to meet climate targets, while duce subsidies. ™

Week 30 30•July•2020 www. NEWSBASE .com P5