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“Too little, too late or lessons learnt and time to be brave?” – A Roundtable Discussion

Hoggett Bowers Spiral Stairs

Introduction

Hoggett Bowers hosted an online event with a select group of guests to hear Dr Graham Cooley, CEO ITM Power to share his perspective on the energy transition and the journey to net zero.

Graham opened the discussion by giving a detailed account of what role green hydrogen can play in the low carbon energy transition markets and ensuring national energy supply security for the future:

  • ITM is the world’s largest PEM electrolyser manufacturer for producing green hydrogen. Annual capacity will increase 5-fold by 2025. ITM has secured over £250 million of equity fundraising and continues to have significant support from The City. For example, 21 banks cover ITM Power, compared to 17 for Tesco! The UK Government has recently doubled its ambitions, for 10 GW of low carbon hydrogen production capacity to be onstream by 2030, of which half will come from green hydrogen.
  • The 2019 UK Climate Act to reach net zero by 2050 is an important catalyst as green hydrogen has a major part to play both in the UK and internationally. This, combined with the Russian-Ukraine war has heighted the need for security of energy supply, as well as the wider consequences on food production has yet to be felt worldwide. At the moment, worldwide production of hydrogen stands at 17 Mt per year and this is expected to significantly increase as the demand to ammonia increases, with fertiliser being a major by product.
  • Currently, the high cost of energy makes green hydrogen to be increasingly cost competitive and also it does not suffer from the price volatility of fossil fuels, as costs are reflected by electrolyser performance. Therefore, green hydrogen has zero volatility when connected to a PPA. It also has long duration storage and is relatively easily transported. Inconsequence, the opportunities for green hydrogen market growth together with associated renewables developments is exciting and game changing as customers want low cost turnkey solutions.
  • To achieve this, and determine large scale production and commercial viability, ITM Power has been innovative to establishing differing partnerships with the likes of Orsted, Linde, Yara, Vitol, Shell, Scottish Power, Snam etc. These types of cross sector partnerships are becoming the template for the low carbon sector. More information on this and ITM Power leadership in this arena then click HERE.

Thereafter followed a Q & A session, and the main takeaways are:

  • Other uses for hydrogen: the feasibility of its use in desalination plants is considered viable and also a fuel for transport. The ideal size for a refuelling station would be 4 MW and again, the attraction of price stability compared the petrol station forecourt is appealing. Government incentives to act as a catalyst could be forthcoming in the near term.
  • Cost of green hydrogen production: it is expected the cost of electrolysis will reduce by 40% over the next 3 to 4 years. This is sunk capital which gives a greater predictability of ROI, than mainstream renewables. Green hydrogen has cost parity with blue and grey hydrogen and is likely to be cheaper in the future. Blue hydrogen and associated CCUS requires complex infrastructure and who is going to hold the liability for CO2 storage, Government or industry?
  • Supply chain: Green hydrogen project scale is growing rapidly, and electrolyser scale up increases by a factor of 10 every 2 years, currently at the 100 MW deployment size. Developing the supply chain to meet these needs will be imperative.

Conclusions

Geopolitical events over the first half of 2022 has already had a huge impact on the world’s economy, food markets and the energy sector. This is likely to increase in intensity over the coming year. We have already seen the consequences of not having national policies on security of energy supply. Many European governments are at fault and are currently rethinking supply options and new technology enablers.

Green hydrogen is just one example in the new energy mix, where innovation and business bravery can establish a new market. The demand for green hydrogen is anticipated to grow with increasingly stringent carbon emission regulations and zero carbon energy goals. Also, there is increasing cognizance that ensures national energy security from low carbon intermittent sources, which requires long-term sustainable energy storage. BP expects low carbon hydrogen demand to reach 380 to 450 Mt per year by 2050, representing 15% of the total energy mix.

Moreover, continuously decreasing the cost of green hydrogen production through electrolysis is another factor to spur the demand, which will accelerate in the coming years. The ESG credentials of green hydrogen are strong and the future exciting. To view Graham’s presentation deck, click HERE.

Hoggett Bowers are very grateful to all our guests and a special thank you to:

Ana QuelhasMD HydrogenEDP Renewables
Andy CrouchCEOAlpha Petroleum
Bob TaylorCEOPortsmouth Water
Carl ArntzenCEOBosch Thermotechnology Ltd
Christer StoyellManaging DirectorSevern Trent Green Power
Dave LeesCEOBristol Airport
Derek ProvanCEOAGS Airports Limited
Dr Carole NakhleCEOCrystol Energy
Henry CubbonMDDCC plc
Irina TanaevaDirectorHydrogen & e-fuel Aker Solutions
Jim ArnoldCEOM Group
Jim FairbairnCEOMegger
Kevin MouattCEOEcolutions
Loraine PhillipsIndependent AdvisorEnergy & Petrochemical Sector
Martin GrantDirector TrusteeNuclear Liabilities Fund
Michael LewisChief ExecutiveEON
Mike MaudsleyCEOEnfinium
Murray DouglasDirector of Energy Transition ServiceWood Mackenzie Limited
Neil McDermottCEOLow Carbon Contracts Company
Nick SalmonChairScotia Gas Networks
Oliver MillicanMDBute Energy
Pekka PaasivaaraNED/AdvisorVarious
Peter FranceCEOAsco Group
Peter KallosCEOBuried Hill Energy
Richard BradleyHead of StrategyMidlands Connect
Ross GloverDevelopment DirectorIGas
Tim StedmanCEOAgilyx
Tony CockerChairmanInfinis