The big oil companies they see business in green hydrogenand after years studying the feasibility of their different projects, they plan large-scale investments to overcome the current limitations that prevent making this clean gas a profitable energy.
The objective of las ‘Big Oil’ goes through a very particular vision of a low-carbon future: multi-billion dollar developments that generate large concentrations of renewable electricity and convert it into clean chemicals or fuels that can be shipped around the world to power trucks, ships or even planes.
On the run for a juicy piece of cake
Until recently, the hydrogen plans of the big companies were modest, but something is changing. “The big oil companies have been building multimillion-dollar projects for years,” the director of the Trafigura Group’s renewable energy department tells Bloomberg.
“This green hydrogen, the green ammonia, will be the new energy industry“, sentence.
The plan is well suited to the strengths that large companies such as ‘Big Oil’ naturally have in terms of project management and their financial weight, but even with these advantages they face the challenge of a technology that has not been proven on a large scale with a Almost non-existent infrastructure.
Nonetheless, figures don’t lie and this month has seen a flurry of big news about hydrogen-focused mega-projects.
An example of this is BP, which leads an investment of 36,000 million dollars called “Asian Renewable Energy Hub”, which intends to install 26 GW of solar and wind farms in a vast 6,500 square km swath of the Pilbara region of Western Australia to generate electricity.
Once up and running, it intends to produce each year “about 1.6 million tons of green hydrogen or 9 million tons of ammonia, which can be used to make fertilizers.”
For its part, TotalEnergies has joined the conglomerate of Indian billionaire Gautam Adani in a company that plans to “invest up to 50,000 million dollars in the next 10 years in green hydrogen”.
With an initial investment of 5,000 million dollars, the project wants to develop 4 GW of wind and solar capacity, “of which approximately half will feed electrolysers that will produce the hydrogen used to make ammonia”.
In the longer term (by 2030), the company wants to reach one million tons of green hydrogen per year, powered by 30 GW of clean energy.
It is only a matter of time before Shell follows the steps of its competitors so as not to be left behind. According to one of the company’s managers in an interview with the Financial Times in London, the oil company “is looking for a place where there are enough wind and solar resources for a large-scale project that suits its interests.”
For its part, the American giant Chevron Corp.. is willing to spend billions of dollars to develop a mix of green and blue hydrogen, which uses a chemical reaction to split natural gas and capture and store carbon dioxide.
And these are just a few examples of things to come, as these oil giants they continue to spend most of their assets on black gold and gas. For now, the more modest projects they have underway serve as ‘trials’.
In the case of BP, it is developing a electrolyzer at its Lingen refinery (Germany) and closer, another at its plant in Castellón to produce green hydrogen that will be used in these facilities.
And Shell, for example, commissioned a 10 MW plant last year that produces hydrogen for its refinery in Rheinland, Germany, and already has plans to expand its capacity.
The nature of hydrogen, its complex processing plants, pressurized pipelines and storage facilities, as well as the specialized tankers required for its distribution, make it “an escape route into the future”, but the main stumbling block remains the price.
Green hydrogen mega-projects may be the future, but there is a long way to go before they are proven commercially viable.
According to the executive director of Hy24, Pierre-Etienne Franc, “facilities will first have to be built on a scale of hundreds of MW, 10 times the size of the pilot projects currently operating in Europe.
This will enhance the operational knowledge and electrolyser manufacturing capacity needed to go to the next level.”
Rystad estimates that the ideal average size for a green hydrogen electrolyser is 3 to 4 MW. That should increase 20-fold by 2025, leaving a lot of legwork to do for gigawatt-scale developments.