www.teitimes.com
October 2019 • Volume 12 • No 8 • Published monthly • ISSN 1757-7365
THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com
Special Technology
Supplement
Wind farm
decommissioning:
planning ahead
Deploying renewables across
all sectors through ‘Power-to-X’
is crucial to achieving carbon
neutrality.
The industry must not lose sight of the
challenges decommissioning can and
will pose to the wind sector. Page 14
News In Brief
Electricity leads
decarbonisation but other
sectors need to act
Decarbonisation of the power sector
is gaining pace in the EU but further
political action is needed to ensure
timely decarbonisation of other end-
use sectors.
Page 2
Davis-Besse tests hydrogen
technology
The USA is investigating ways of
improving the commercial outlook
for its nuclear energy sector through
the development of nuclear-to-
hydrogen technology.
Page 4
New minister calls for end to
nuclear in Japan
Japan’s new Environment Minister
has called for the country’s nuclear
reactors to be scrapped to prevent
a repeat of the Fukushima nuclear
disaster.
Page 5
Offshore wind reaps rewards
in UK auction
The UK’s latest renewable energy
auction has generated record low
strike prices thanks to plummeting
costs in the offshore wind energy
sector.
Page 6
Adding value through
digitalisation
Adding value through digitalisation
and IoT are key to the success
of utilities. TEI Times speaks to
Omnetric’s CEO, Daniel Felicio.
Page 12
Hydrogen and a zero-carbon
world
Hydrogen production is a possible
key mechanism to a zero-carbon
energy system. The challenge is
how to accelerate the uptake of a
hydrogen economy.
Page 13
Technology:
Superconducting HVDC
passes the test
A superconducting HVDC cable
has passed qualication testing for
the rst time, heralding the rst real
step in demonstrating the technology
could be a viable option for
transmitting large amounts of power
over long distances.
Page 15
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With carbon emissions at their highest and sea levels rising, world leaders committed to more
urgent action on climate change at this year’s UN Climate Change Summit in New York.
Junior Isles
Corporations embrace sustainability as climate
change battle heats up
THE ENERGY INDUSTRY
TIMES
Final Word
There seems to be some
role reversal when it
comes to climate change,
says Junior Isles. Page 16
World leaders and businesses gathered
at last month’s UN Climate Change
Summit to call for urgent action to
avoid catastrophic climate change.
At the end of September at the New
York summit, more than 60 heads of
state, spurred by António Guterres,
UN secretary-general, announced a
series of new climate targets, with
about 66 countries pledging to reach
“net zero” carbon emissions by the
middle of the century.
Guterres set the tone for the gather-
ing, saying: “If we don’t urgently
change our way of life, we jeopardise
life itself. My generation has failed in
its responsibility to protect our planet.
That must change.”
In the run up to the meeting Guterres
lobbied world leaders to come to the
summit with concrete commitments
to stop subsidising fossil fuels, stop
building new coal power stations and
move toward net zero emissions.
He also barred leaders from the US,
Brazil and Saudi Arabia from taking
the stage because of their failure to
support the Paris climate agreement,
as well as from other leading econo-
mies such as Japan and Australia be-
cause of their continued support for
coal.
In one of a number of three-minute
speeches from heads of state, French
President Emmanuel Macron urged
world leaders to respond more ur-
gently to climate change and said
France would not pursue new trade
negotiations with countries that were
not following the Paris climate
change agreement.
Signatories of the agreement
pledged to limit global warming to
well below 2°C and ideally to 1.5°C,
but their current climate commit-
ments do not add up to the emissions
cuts required.
Carbon dioxide emissions have hit
record highs and a report just pub-
lished by the International Panel on
Climate Change (IPPC) claims that
by 2100 a sea level rise of as much as
1.1 m was likely under a business-as-
usual scenario, where global carbon
dioxide emissions keep increasing.
With coal widely acknowledged as
a major driver of rising emissions,
the IPCC said in a report last year that
limiting warming to 1.5°C would re-
quire cutting coal use to virtually
zero and cutting emissions to net zero
by the middle of the century. Another
report issued by Climate Analytics
during the summit said global carbon
emissions from coal red power sta-
tions need to peak next year, and coal
Continued on Page 2
A large group of multinational compa-
nies signed up to the UN Global Com-
pact (UNGC) at last month’s UN Cli-
mate Action Summit in New York.
With the announcement of 59 new
participants, the group, with its cam-
paign to keep global warming below
1.5°C, now has 87 companies with a
combined market capitalisation of
$2.3 trillion. The initiative was
launched earlier this year with 28
companies signing up in July.
Although over 600 companies had
already committed to limiting global
warming to 2°C in line with the Paris
Agreement, their progress on actu-
ally hitting their goals has been
mixed.
Companies signing the UNGC
pledge have agreed to set indepen-
dently veried “science-based” tar-
gets and create decarbonisation plans
within 24 months to start bringing
their emissions down to keep warm-
ing below 1.5°C. They also have the
option to publicly commit to reach-
ing net-zero emissions by no later
than 2050.
Andrew Steer, a board member at
the Science Based Targets Initiative
– a coalition between the UNGC and
various environmental research and
activist groups in charge of vetting
the companies signing the pledge –
said companies now realise that
smart policies on climate change en-
courage more resource efciency
and the development of new technol-
ogy, which can improve, rather than
reduce, competitiveness.
“Just ve or 10 years ago, the vast
majority of CEOs, boards and gov-
ernments believed it would be nice to
do something about climate change
but it would require a trade off,” he
said.
Engie Impact was created this year
by French multinational electric util-
ity company to offer consulting and
services for sustainability strategy
development, execution and tracking
to accelerate sustainability transfor-
mation for corporations, cities and
governments.
Speaking on the sidelines of New
York Climate Week, the company’s
CEO, Mathias Lelievre, said: “Sus-
tainability is really a business com-
patible approach. We are hearing
good stories everywhere of people
reducing energy consumption, water
consumption, putting some circular
thinking into how they design their
products. This is happening locally
because they can reconcile the busi-
ness with the carbon dollars.
“What we are uncovering is that
when you reduce your energy con-
sumption, for example, and change
how you consume key resources, it
gives a direct bottom line opportu-
nity to plug all of that into renewable
schemes, etc.”
He said, however, the question is
how to scale this at speed. “It’s all
about how to accelerate this energy
transformation. It’s difcult and very
complex.”
One of the key challenges for com-
panies is formulating a good road-
map based on reliable data to take
action.
“Today, only a few [organisations]
are really equipped to measure in
real-time what’s going on when con-
sidering the impact on the environ-
ment, and really getting what they
need to make sure they are address-
ing the right priorities, investing in
the right projects and tracking those
projects. This is a key element that is
not there today,” said Lelievre.
UN climate
conference calls
for action
French President Emmanuel Macron urged world leaders
to respond more urgently to climate change
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
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E.On says it is looking to take the next
“decisive step” in its realignment after
winning approval from the European
Commission for its merger deal with
RWE.
The German energy giant said last
month that the 76.8 per cent stake in
Innogy previously held by RWE has
already been transferred to E.On, and
that it also planned to also close the
voluntary public takeover offer to In-
nogy’s minority shareholders.
The transaction is part of a wider,
complex merger deal between E.On
and RWE that will see E.On focus on
energy networks and services to retail
customers, and RWE become largely
a renewable energy rm.
In February the Commission ap-
proved the acquisition by RWE of
certain generation assets owned by
E.On, but wanted to take a closer look
at the retail side of the proposals over
concerns about the impact on competi-
tion. Following its investigation, the
Commission concluded the deal would
not result in signicant loss
of competition in Germany or other
European markets.
In exchange for E.On’s takeover of
Innogy, RWE will receive an equity
interest of 16.7 per cent in E.On and a
seat on its supervisory board. E.On will
also transfer its renewables activities
and minority interests in two nuclear
power plants to RWE. Innogy’s entire
renewable energy business, gas storage
business and stake in Austrian utility
Kelag will come to RWE as “quickly
as possible next year”, RWE said.
E.On will also receive nancial com-
pensation worth €1.5 billion from
RWE.
8
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
Companies News
E.On ready for “swift”
RWE integration
Masdar and EDF are targeting the en-
ergy services sector in the United Arab
Emirates (UAE) through a new joint
venture.
The two rms have announced that
the joint venture will explore and col-
laborate on opportunities in non-utility
scale renewable energy and energy ef-
ciency investments.
The agreement will reinforce EDF’s
and Masdar’s “already strong” ties in
the region, where they are currently
collaborating on large-scale renew-
able energy projects, Masdar said in
a statement.
The agreement is “a reection of
Masdar’s global clean energy ambi-
tions and further supports the UAE’s
Energy Strategy 2050 objectives to
increase renewable energy usage and
energy efciency across the UAE, the
region and internationally,” said Mo-
hamed Jameel Al Ramahi, Chief Ex-
ecutive Ofcer of UAE-based Masdar.
Both rms will leverage their inter-
national experience and expertise to
expand in small-scale solar and energy
efciency.
“Having accomplished several com-
mon successes in renewables, EDF and
Masdar are now extending their coop-
eration to energy-efciency services,”
said Marianne Laigneau, Group Senior
Executive Vice President of EDF in
charge of the International Division.
“Along with Masdar, our ambition is
to develop innovative solutions to op-
timise energy consumption and reduce
the carbon footprint of our customers
in the Middle East and in other coun-
tries where both companies already
cooperate.”
In August, the consortium of EDF
Renewables and Masdar announced
that they had reached nancial close
on the 400 MW Dumat Al Jandal wind
project in Saudi Arabia, the country’s
rst utility-scale wind farm.
In May, the Moroccan Agency for
Solar Energy (MASEN) announced
that the consortium of EDF Renew-
ables, Masdar, and Green of Africa,
was the successful bidder for the de-
sign, construction, operation and main-
tenance of the 800 MW Noor Midelt I
multi-technologies solar power plant.
Both companies are also partners in
developing the third phase of the 800
MW Mohammed bin Rashid Al Mak-
toum (MBR) solar park in Dubai, 200
MW of which was commissioned in
2018 and 300 MW is expected to enter
into service in 2019.
Senvion has said that it was aiming to
close a deal for the sale of parts of its
business to Siemens Gamesa Renew-
able Energy (SGRE) by the end of
September.
The troubled German turbine manu-
facturer announced last month that it
had entered exclusive, non-binding
talks with SGRE for the sale of “se-
lected services and onshore assets in
Europe”.
“The parties are now entering nal
negotiations and, if nal agreements
are reached, expect that the necessary
decisions will be taken by the end of
September,” Senvion outlined in a
statement. It added that it is continuing
to explore options and negotiations
with investors for the remaining parts
of its business.
Senvion also said that the nancial
arrangements to secure ongoing busi-
ness activities continue to be in place.
“Wind turbine continuation projects
are underway and will secure a major-
ity of production jobs for the next
months, with some going into 2020,”
it added.
Yves Rannou, CEO of Senvion, said:
“Today’s announcement means that
we are close to nding a safe harbour
for a signicant part of the business
and substantial parts of its employee
base. In these difcult circumstances,
these are positive news.
“Looking ahead to the weeks to
come, the management team will con-
tinue to put all efforts behind nding
the best solutions possible for the rest
of the business.”
In early 2019 Senvion announced
that it had led an application in Ger-
many for self-administration pro-
ceedings, a pre-emptive insolvency
process.
The company secured €100 million
of funding to help shore up its nanc-
es in May.
Norway’s Kvaerner is looking to new
growth areas in its renewables and oil
and gas divisions to boost its business.
The company has announced plans
to expand operations in the offshore
wind energy sector and oating pro-
duction units, targeting 40 per cent
growth “within a few years”.
In the offshore wind sector, Kvaern-
er sees increasing opportunities in
Europe and North America. It has
already delivered 50 units for off-
shore wind projects and is currently
involved in early phase work for
several customers.
Earlier this year, the company
signed a contract with Equinor to
study how oating concrete substruc-
tures for offshore wind turbines for
the planned Hywind Tampen project
in the North Sea can be designed and
constructed.
“The market for the development of
offshore wind power is growing expo-
nentially. If such developments are to
be protable for both energy compa-
nies and society, it is important that
suppliers can contribute with safe and
efcient execution. We bring valuable
knowledge from the oil industry where
the cost over time has been signi-
cantly reduced,” said Karl-Petter
Løken, Kvaerner ASA CEO.
“From now on, Kvaerner will, to-
gether with customers, subcontractors,
and public knowledge institutions etc.
aim to build a whole new industry with
jobs, expertise and value creation.”
Overall Kvaerner is aiming to in-
crease its annual revenues from around
NOK 7.3 billion ($803.9 million) in
2018 to NOK 10 billion by 2023.
UK energy utility Ovo has launched
a zero-carbon business strategy ahead
of its planned takeover of SSE’s en-
ergy retail unit.
Ovo and SSE last month conrmed
a takeover deal in which Ovo will pay
£500 million to acquire SSE’s GB
household energy and services busi-
ness. The deal will make Ovo the
second-largest energy supplier in the
UK and enable SSE to focus on its
renewable energy and regulated net-
work assets units.
Ovo’s ‘Plan Zero’ strategy aims to
drive progress towards zero carbon
living and is a direct response to the
climate crisis. “Plan Zero demon-
strates the clear role that businesses
and individuals have to play in reduc-
ing carbon emissions and acting to-
gether to ght the climate crisis,” Ovo
said in a statement.
Under the plan, Ovo hopes to mo-
bilise its customers to create a zero
carbon community, helping them
halve their total lifestyle carbon emis-
sions, and eliminate their household
emissions by 2030. Ovo will also
commit to optimise 5 million homes
with exible, low carbon technolo-
gies such as smart EV chargers and
smart heaters, it added.
The company also plans to reach net
zero emissions across its operations
and supply chain by 2030.
Ovo currently serves around 1.5 mil-
lion customers in the GB market. It
will pay £400 million in cash plus
£100 million in loan notes for SSE’s
retail unit, which provides energy,
telecoms and home services.
The deal for SSE’s retail unit will
accelerate its ambitions, the company
said. This transaction marks a sig-
nicant moment for the energy indus-
try,” said Stephen Fitzpatrick, CEO
and founder of Ovo. “Advances in
technology, the falling cost of renew-
able energy and battery storage, the
explosion of data and the urgent need
to decarbonise are completely trans-
forming the global energy system.
For the past three years Ovo has
been investing heavily in scalable
operating platforms, smart data capa-
bilities and connected home services,
ensuring we’re well positioned to
grow and take advantage of new op-
portunities in a changing market,” he
added:
Ovo was launched in 2009 and has
a market share of ve per cent. The
purchase of the SSE retail unit will
increase its market share to 18 per
cent, just behind Centrica-owned
British Gas, with 19 per cent.
Last year Ovo announced an invest-
ment in German start-up energy sup-
plier, 4hundred, marking a move into
Europe’s energy markets.
Earlier this year Ovo secured invest-
ment from Japan’s Mitsubishi Corpo-
ration in exchange for a 20 per cent
stake to help it fund future growth.
Ovo sets out
Plan Zero
strategy
Masdar and EDF in Esco venture
n E.On moves on Innogy takeover n Energy giants ready for new focus
Senvion in talks with SGRE
Kvaerner looks to new growth
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
Special Technology Supplement
Power-to-X: the pathway
to a carbon-free world
Deploying renewables across all sectors of the global energy economy is seen as crucial in meeting zero carbon
emissions targets. Power-to-X is the key to unlocking the potential of this so-called sector coupling.
Junior Isles
About half of it is used for the syn-
thesis of ammonia, which is the basis
for ammonia phosphate or urea and
other chemicals, mainly methanol.
Hydrogen is also used in reneries
for hydrocarbon cracking and other
processes.
Unlike the SMR method, the gen-
eration of e-hydrogen via electrolysis
of water with electrical energy from
renewable sources is completely free
of CO
2
emissions. “This pathway is
pretty straightforward,” said Dr Pug.
“We are already seeing the rst proj-
ects because it can be done on a small
scale, e.g. for private passenger cars
or hydrogen buses and trucks.”
He added: “Right now we are devel-
oping a project in Chile. This is the
world’s best renewables location and
we can produce green hydrogen from
electrolysis at the same cost as from
steam reforming of natural gas.”
The second pathway, which Dr
Pug believes will be “a signicant
part of the future”, is using hydrogen
to produce synthetic fuels. Although
the direct electrication of cars
through batteries is an important lever
in the utilisation of green electricity,
he says it cannot be applied to all
types of transport.
“If you look at the energy consumed
in mobility, 50 per cent goes to heavy
trucks and long haul marine and avia-
tion. These three areas cannot use
battery-based energy storage. This is
where hydrogen and synthetic hydro-
carbon fuels kick-in.”
Using synthesis with carbon dioxide
(from biogenic sources, unavoidable
industrial emissions or from the air),
hydrogen can be converted into syn-
thetic, sustainable ‘e-fuels’ such as e-
methanol or e-jet fuel or other carbon-
based chemicals.
These “green fuels” can replace
fossil fuels, lowering the carbon
emissions from their expended energy
by as much as 90 per cent. They can
also replace biofuels, such as ethanol,
which now consumes considerable
farmland to grow its main feedstock,
corn. This can resolve the food-ver-
sus-fuel debates on the use of increas-
ingly valuable farmland and return
acreage to food production or non-
crop uses, such as nature reserves,
recreation areas, residential develop-
ments and reforestation.
E-fuels can immediately be mixed
with fossil fuels to reduce the overall
carbon footprint. P2X thus allows a
T
here is a general consensus that
far more has to be done, and far
more quickly, if the world is to
avoid irreversible climate change. In
an effort to limit global warming to
well below 2°C above pre-industrial
levels, the Paris Agreement, negotiated
at the 2015 United Nations Climate
Change Conference, requires effect-
ively zero emissions by 2050.
The global climate effort has re-
sulted in huge investment in renew-
ables in the electricity sector, increas-
ing the share of renewables to up to 22
per cent globally. But it has had little
impact on global carbon emissions.
Some 60 per cent of global carbon
emissions come from outside power
generation, i.e. in transportation,
buildings, industry and heating, and
there has been very little progress in
decarbonising these sectors.
To reach the target of zero CO
2
emissions by mid-century, there has
to be an integrated approach to decar-
bonising all sectors of the economy.
Using renewable electrical energy
from the power sector – especially
energy from wind and solar that can-
not be immediately consumed – to
decarbonise energy across all sectors
unlocks enormous environmental and
business benets. This so-called
‘sector coupling’ is one fundamental
element of the energy transition and
involves increased direct electrica-
tion of other sectors as well as provi-
sion of renewable energy to other
sectors in a suitable (e.g. chemical)
form.
It is a growth area that Siemens be-
lieves has tremendous potential and is
therefore investing in technologies
known as Power-to-X (P2X) that en-
able sector coupling.
Commenting on the idea, Dr. Volk-
mar Pug, Vice President Energy
Consulting, Siemens AG, said: “Of
all the buzzwords over the last 10
years, sector coupling is a very big
one because it really can change the
world.
“The idea of sector coupling is
nothing more than bringing renew-
able energy from the power sector
into the other sectors to thereby de-
carbonise the entire energy system,
making electricity the backbone of
energy supply in the future. As an
example, an increase of power gen-
eration by 25 per cent would reduce
primary fossil energy consumption
by a half, due to the increased ef-
ciency associated with electrication
of other sectors.”
Although there has been growing
interest around this line of thinking
for the past two or three years, it has
really come to the fore in recent
months. “This,” says Dr Pug, “is
because there are now, practically, not
just theoretically, enough technolo-
gies available at reasonable cost that
can help decarbonise the world.”
As one of many activities to decar-
bonise global energy production and
use, Siemens is active in the “Power-
to-X for Applications” Working
Group at the Mechanical Engineering
Industry Association (VDMA),
which has 3200 member companies
and is Europe’s largest mechanical
engineering organisation. Siemens
says its involvement with VDMA is
part of its commitment to social and
environmental responsibility.
Siemens is driving three pathways
for P2X. The rst is what it calls e-
hydrogen – using renewables to gen-
erate electricity, which is then fed to
an electrolyser to produce hydrogen.
Hydrogen is a versatile energy carrier,
which can be stored and used in the
transport, industrial or chemical sec-
tors or as a fuel in gas turbines.
Currently, over 50 Mt of hydrogen
is produced worldwide every year
from fossil sources via the steam
methane reforming (SMR) process.
CO
2
emissions reduction has so far focused on power, but all sectors in the economy must contribute
in gas turbines. Green hydrogen pro-
duced by electrolysis can be converted
into electricity again (re-electrica-
tion) and used as an admixture with
natural gas or in pure form to fuel gas
turbines.
“Over time, oil and gas will be dis-
placed by green fuels or green gases.
Hydrogen would be a very good op-
tion here,” said Dr Pug.
Several gas turbine manufacturers
are already making progress in this
area.
In 2019, as part of its commitment
toward environmental sustainability,
Siemens signed a European industry
agreement that promises that its new
gas turbines will be capable of operat-
ing on 20 per cent hydrogen (mixed
with natural gas) by 2020 and 100 per
cent hydrogen from 2030 onwards.
Parts of these commitments have
already been fullled, as much of the
Siemens gas turbine portfolio can use
fuel mixtures with hydrogen levels of
up to 30 per in large gas turbines, 60
per cent in medium sized machines
and even up to 100 per cent in
aeroderivative models with a wet low
emissions system.
“It’s an area where we are continu-
ally working,” said Dr Pug. He
stressed: “Gas turbines can operate on
natural gas from fossil sources or
green gas such as hydrogen. This
makes gas turbine plants a sustainable
investment and avoids the risk of
ending up as stranded investments
when decarbonisation is enforced by
regulators. All scenarios for a deeply
decarbonised world in the year 2050,
consider gas turbines as the most
economic option to provide security
of supply.”
Erik Zindel, Director Energy Con-
sulting at Siemens added: “Fifty or 60
per cent of the time, there is sufcient
sun, wind or hydro available. The rest
of the time, you can use the stored
hydrogen by combusting it in conven-
tional combined cycle plants. Gas
turbines are the technology of choice
for providing dispatchable power
when there is not enough solar or
wind power in the grid. It is an area of
great interest to plant owners, many
smooth transition from the fossil
world to one that is largely carbon-
neutral.
Dr Pug noted that synthesising to
methanol is hugely important. “We
strongly believe that methanol is the
substance of choice; it could be a
substitute in the replacement of bio-
ethanol, for example. The big advan-
tage is that, basically, you can create
any kind of hydrocarbon fuel using
methanol as the basic substance.
“You could also use existing infra-
structure [for methanol], e.g. transport
logistics and refuelling stations,
which you could not do if you go the
(molecular) hydrogen pathway. And
you avoid step increases in technology
that are initial cost and performance
hurdles to their widespread imple-
mentation in established markets”
Notably, Dr Pug says that the need
for CO
2
in producing e-fuels could
trigger a renaissance of carbon cap-
ture, i.e. carbon capture and utilisa-
tion. CO
2
could be captured from ex-
isting, unavoidable point sources, e.g.
from cement production, biomass
power plants or fossil fuelled power
plants. In future, recovering CO
2
from
the atmosphere (direct air capture,
DAC) could also become an option,
especially for regions that are rich in
renewable energy but far away from
industrial sites.
The third pathway that Siemens is
pursuing, is power-to-ammonia.
Here, e-ammonia (NH
3
) is synthe-
sized from e-hydrogen and nitrogen
derived from an air separation using
the Haber-Bosch process. E-ammo-
nia can be used as feedstock for fer-
tilizers (urea, ammonia phosphates)
and other chemicals. With about 175
kg hydrogen per tonne of ammonia,
it is an excellent carrier of hydrogen
to transport it over long distances.
Ammonia cracking processes are
under development for recovering
the hydrogen.
“The problem here,” says Dr Pug,
however, “is that there are no green
drivers for ammonia, and no one
wants to make food more expensive.
So, reducing the cost of green am-
monia production is an imperative.”
Siemens is currently developing
technology solutions in line with the
three pathways that it foresees for
hydrogen.
One clear component is the elec-
trolyser. There are three types of
electrolysis: alkaline, which has the
longest experience; solid oxide (SO),
which is currently used at smaller-
scale; and proton-exchange mem-
brane (PEM) electrolysis. With PEM
technology the electrolyser can be
switched on and off without preheat-
ing, leading to high exibility, ramp
rates and overall system efciencies
even with partial loads.
With an extended operating range,
PEM technology can ramp up in-
stantly in its operating capacity. It can
then operate at from 5-100 per cent of
capacity at very high ramp rates.
This, says, Siemens makes it per-
fectly suited for the load proles of
renewable power sources like wind
and solar which are volatile by nature.
Siemens has what it calls its H
2
package, which comprises all units to
produce e-hydrogen. “We have one of
the most advanced PEM electrolyser
portfolios,” noted Dr Pug.
In 2015, Siemens deployed the Si-
lyzer 200, a large-scale, commercial
version of PEM electrolysis at one of
the world’s largest power-to-gas
plants in Germany. Today, the com-
pany has taken that technology into
its third generation, with the deploy-
ment of the Silyzer 300 at the H2FU-
TURE project, in partnership with
Verbund Solutions GmbH, voestal-
pine Stahl GmbH, K1 MET GmbH,
and the Austrian Power Grid AG.
The Silyzer 300 consists of up to 24
PEM electrolytic modules per array
that together draw 17.5 MW of power
to produce up to 340 kg/h of virtually
pure hydrogen with no CO
2
emis-
sions. The system operates at over 75
per cent efciency,
The Siemens Silyzer development
roadmap targets fourth-generation
hydrogen plants that, by 2023, can
draw more than 100 MW of power for
hydrogen production at ever greater
efciencies. By 2030 and beyond,
Siemens envisions building 1000
MW, fth-generation plants.
The second area of technology de-
velopment for Siemens is what Dr
Pug calls “Power-to-X solutions”,
where the current focus is power-to-
methanol and power-to-ammonia.
Here Siemens can provide all equip-
ment related to these applications,
including the electrolyser, compres-
sion and storage equipment, instru-
mentation and controls, electrical
equipment (transformer, switchgear,
rectier etc.); water treatment and
de-ionisation equipment, hydrogen
cleaning systems, etc.
The third big area is in develop-
ments that allow hydrogen to be red
Special Technology Supplement
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
With sector coupling, the
increased electrication
reduces primary energy
consumption signicantly
Sector coupling is nothing
more than bringing renewable
energy from the power sector
into other sectors to thereby
decarbonise the entire energy
system
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
produced,” said Dr. Pug. “In terms of
technology, we are at the beginning of
driving down costs by automating the
manufacturing side of electrolysers
for example. And if you look at carbon
capture, you could say we are still at
the beginning there too, considering
that CO
2
capture never really took off.
If you can make this very cheap, it will
eventually be a disruptive technology.
“This is another area where we are
doing some technology develop-
ment,” he added.
Siemens has developed a process for
the post-combustion removal of CO
2
from power plant ue gases. Employ-
ing an environmentally friendly aque-
ous solution of an amino acid salt
(PostCap
TM
), approximately 90 per
cent of the CO
2
from ue gases are
captured. Siemens is looking for an
opportunity to re-demonstrate its
PostCap technology together with
customers/partners in the context of
P2X.
With regards to policy, Siemens be-
lieves a few things have to happen.
First and foremost there has to be
legislation in support of carbon reduc-
tion. “As these technologies are still
more expensive than the conventional
black fuels, all of this won’t happen if
there is not a clear regulatory push for
decarbonisation,” said Zindel. “It’s a
of which are already investigating
whether their machines can be up-
graded in the future to burn hydrogen.”
“This would enable the transition to
100 per cent renewables. But we ex-
pect this to happen at a later stage, as
we believe that at the moment the
value of green hydrogen is higher in
other sectors than in the pure power
generation industry.”
Hydrogen is expected to rst pene-
trate the areas, outside of the power
sector that are proving difcult to de-
carbonise such as parts of the chemical
sector, the steel and cement industries
and mobility.
For P2X to really materialise, how-
ever, both technology, which will en-
able cost reductions, and policy will
have to develop simultaneously.
While Siemens says that e-hydrogen
can already present a positive business
case in some instances, costs will need
to be driven down by lowering capex
and the levelised cost of electricity of
the renewable energy that is used to
feed the electrolyser. It also said much
depends on the amount of hours that
the electricity produced is available.
The capacity factor is as important as
the LCOE because it denes the capi-
tal efciency of the electrolysis plant.
“These are the main three parameters
that dene the cost of the hydrogen
bit like solar and wind power; 20
years ago they were completely out of
the market in terms of cost… now
their LCOEs are a third of most
modern gas red stations. You need
incipient markets to warrant R&D
investment and economies of scale to
bring the costs down.”
Secondly, the value of e-fuels pro-
duced from green hydrogen has to be
recognised by governments. “The use
of synthetic fuels from green sources
has to be accepted,” said Dr Pug.
And to some extent, this is already
happening. Under the new Renew-
able Energy Directive (RED II) the
EU stipulates that green fuels should
represent 14 per cent of the market
share of transport fuels by 2030.
Despite the target, Dr Pug believes,
however, that the emphasis that gov-
ernments have put on EVs has created
an uneven playing eld for technolo-
gies. “There has to be a level playing
eld between e-cars and [cars running
on] synthetic fuels,” he stressed.
“The emissions they associate with
e-cars are measured from the battery
to the wheel, so there are no emis-
sions. But if you look at the lifecycle
– taking into consideration battery
production and the energy mix used
to provide electricity to charge the
battery – for the rst one or two years,
e-cars emit a similar amount of CO
2
as a regular car,” Dr Pug explained.
“And if the lifetime of a battery is
only around four years before it has
to be disposed of, you have a signi-
cant carbon footprint for a battery-
powered car.”
He argues that if carbon emissions
are assessed over the entire lifecycle,
there would be much greater focus on
e-fuels or hydrogen fuelled cars.
Thirdly, Dr Pug says there needs to
be government support for the instal-
lation of large scale demonstration
projects, as we have seen in Germany.
Germany is investigating how hydro-
gen can be used on a large scale as an
energy carrier in the heat market, the
transport sector and industry. The
project will cost the ministry more
than €100 million per year, and results
should be seen by 2020.
In July this year, Federal Economics
Minister Peter Altmaier said Germany
wants to be a global leader in the de-
velopment of hydrogen technologies.
The government also said it will de-
velop a hydrogen strategy by the end
of the year.
In terms of frontrunners, geographi-
cally, Siemens says much depends on
production and consumption.
Zindel said: “If we are talking about
methanol, we don’t have to produce
the methanol in the same country that
it will be consumed. We can produce
it in areas where there is good wind or
solar and export it those where there
is a good price premium for it, such as
Europe, California or Japan.”
Dr Pug added: “Much depends on
the regulatory regime and energy
policies. If the green fuel is attractive
and fetches a premium, then it makes
a business case feasible. Projects are
developing in Austria, Denmark,
Germany, Switzerland and the UK,
and we see a number of things coming
up in Latin America, Central America,
Canada, China and parts of the US.”
Essentially, developed countries
with a goal to decarbonise are the
main areas for consumption, while
production will be in places where
conditions are good for renewable
energy, such as the Middle East,
which is increasingly looking to take
advantage of its favourable solar
conditions.
According to Siemens, it is seeing
varying degrees of interest from po-
tential customers.
Zindel said: “They are not so aware
of it in places like Africa and Latin
America but in Central Europe and
Japan, it’s already a topic. Some in-
dustries like oil and gas know they
are in a business that is not sustain-
able, politically and in terms of regu-
lation, over the long term. Oil majors
like Shell and Total are already
thinking about these technologies.
Utilities looking to reduce their CO
2
emissions are also asking us about
our hydrogen capabilities on gas
turbines. We have also had a lot
meetings with utilities in the US
about hydrogen in recent months.”
This interest, adds Zindel, extends
across various sectors, noting that car
manufacturers and airlines are also
enquiring about Siemens’ capability
in the eld of synthetic fuels.
Siemens believes the world is only
at the beginning of the switch to a
sustainable future. In the power sector
there has already been a shift from
fossil fuels to renewables but Siemens
says it is about more than just the
power sector.
Zindel concluded: “It’s about energy
consumption in all the sectors in the
economy worldwide. There has been
a huge movement from conventional
energy to renewables in the last 10-20
years but looking worldwide at all the
sectors, we are just at the beginning of
the transition. It’s probably one of the
largest transformations in energy
technology that the world will have
seen in the last 100-200 years.”
Three pathways of
power-to-x: electricity-based
molecular hydrogen, ethanol
and hydrocarbons, as well as
ammonia
E-hydrogen can already
present a positive business
case in some instances
Special Technology Supplement
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siemens.com/power-to-x
so they will be using IoT to create a
digital twin of the substations to un-
derstand, exactly, things like whether
there is a danger or if the substation
needs maintenance. This is very clear
but it’s not so obvious for other organ-
isations and utilities.”
He says that, generally, US utilities
are aware that they need to collect and
make better use of their data and that
IoT and digitalisation are important.
And while maybe 20 or 30 per cent
are talking about bold digitalisation
strategies, the operation at scale is
“really not there yet”.
Felicio noted: “They need to under-
stand how to go forward and start pi-
loting with clear criteria; implement
at scale and if it doesn’t work, move
to the next pilot.”
Looking to Omnetric’s future in
addressing the industry’s near to mid-
term challenges, Felicio re-iterated
the company’s mission: to capitalise
on the industry change in order to
generate value for its customers. “All
of our growth and protability will
only come from creating value for our
customers,” he said.
With utilities looking to become
smarter, greener and more diverse,
Omnetric notes that it has a lot of
competence in the areas that utilities
are looking to expand in the short to
mid-term. “We will be going from the
meter rollout that we had in the past
to all these areas around the rollout.
Utilities will be concentrating more
and more on business optimisation,
which I believe will run at a larger
scale.
“With our IoT and IT integration
capabilities, we are in a good position.
And together with our buildings
technologies unit of Siemens, we
have a very good offering.
“The expansion of renewables and
EVs will also be playing a role, and
here we can count on the support of
our colleagues in ‘future-grid’ in our
smart industries operating unit. These
areas will bring us the growth required
in the next one to three years.”
Going forward, Omnetric says it is
building on the expansion of IoT in
other industries, with the goal of
building a €3 billion business by
2023. This will come from expansion
into other verticals in the Siemens
domain. Felicio cited smart infra-
structure and logistics mobility as
examples, where it can build on its
competencies in the pure energy/util-
ity arena.
“Building a €3 billion by 2023 is an
awesome challenge and part of what
attracted me to Siemens. But we’ve
had lots of growth and I’m very con-
dent. If you think of why Siemens
acquired the share from Accenture,
our strength is that we have the IT
capabilities. We have the IT DNA but
we can also use the operational tech-
nology (OT) competencies of Sie-
mens and very quickly dene the rel-
evant use cases and assess the impact
on our customers’ businesses, based
on the assets they already have. With
the deep knowledge of IT and OT
assets, we really understand where we
can deliver value.”
T
here is a broad consensus that
the electricity and energy sector
is just at the start of an enormous
scaling of the digitisation of busi-
nesses, where the Internet of things
(IoT) and related services will play an
increasingly important role. The ac-
celerating shift means that players
need to better understand how to move
away from a pure proof-of-concept
approach to a situation where they
understand the value of digitalisation
and implementing IoT at scale, and
how it can generate real value.
It is an issue that Daniel Felicio sees
as one of the most immediate chal-
lenges facing the industry, and one of
the rst tasks he will address as the
new CEO of Omnetric.
Initially formed in 2014 as a joint
venture company owned by Siemens
(51 per cent) and Accenture (49 per
cent), Omnetric brought together
Siemens’ range of products and so-
lutions with Accenture’s manage-
ment and technology consulting,
systems integration and managed-
services capabilities.
Felicio joined Omnetric in Sep-
tember 2018, shortly after Siemens
acquired Accenture’s share in the
company to become sole owner.
Since the start of this year he has
been CEO of Omnetric as well as
CEO of Siemens’ IoT solutions and
implementation unit.
He commented: “My biggest chal-
lenge is how we convey the right
messages and produce the right
lighthouse projects that show the
industry we can generate value for
our customers through IoT and digi-
talisation and create a new economy,
not only in energy but also in other
industries.”
When it was rst formed ve years
ago, Omnetric was heavily involved
in the smart meter rollout that is still
ongoing across Europe. It has also
been participating in projects aimed at
integrating distributed generation
sources into the IT space. Now things
are changing. Today it is much more
about creating systems that allow
sharing of utility data, even with po-
tential competitors, to allow new
business models to be created.
Felicio explained: “[In the past]
projects were not so much driven by a
vision to generate a partner eco-sys-
tem to create a digital system. But
today, in one project that we are doing
with a large central European utility,
we are connecting the leader data
management platform to the billing,
to the SAP and to the portal. The util-
ity said either they play a role in creat-
ing an eco-system of partners where
the partners can connect to the plat-
form and use customer data… to cre-
ate new business models, or risk
competitors passing them by and be-
coming irrelevant.
“This is a good example of a project
where we have delivered a platform
with interfaces to the billing, to the
SAP, and to the portal, etc., and are
now creating the use cases. For ex-
ample, a developer might have solar
panels or EV charging and want to
connect to a billing platform and
customer access platform. They could
now simply connect to this [leader
data management] platform via the
portal as a business-to-business [user]
and draw from all the consumer and
billing data that the customer already
has, and provide an added value ser-
vice to their consumers and share the
revenue with the utility.
“This is a very concrete example of
how utilities are not only thinking
about IT driven by regulatory issues
or smart metering, but are really
thinking about creating new business
models and building an eco-system of
partners.”
Although utilities are now actively
building new business models, ex-
perts often question whether they are
moving at a fast enough pace in the
rapidly changing energy landscape.
“What I’m very worried about – and
I also see it as our role and task to help
drive this process with [our] custom-
ers – is the HR transformation that is
also required. This is often neglected
in projects; utility organisations still
too often act in silos. But I am hope-
ful,” he said. “More and more, I see
the CIO, or chief digitalisation ofcer,
and the COO at the same table. So
although I am very worried at the
speed at which the industry is trans-
forming itself, there are some positive
signs.”
Felicio notes, however that the
speed of transformation and chal-
lenges vary from market to market,
which presents differing levels of
opportunity. The US is seen as being
in the “second generation after smart
meter production”, where projects are
“very much driven” by IT. “We see
there is a good follow up and expan-
sion of the IT platforms to allow the
companies to transform,” he said.
Like the US, Europe has been
stimulated by the expansion of re-
newables but, says Felicio, digitali-
sation has been slowed by data pro-
tection and regulatory issues.
“Sometimes, I would like to see
more boldness in the transformation
of utilities. There are very good ex-
amples like Enel, who very early on
recognised the need to transform
themselves, but a lot more needs to
happen.”
In the Middle East, where the energy
sector is largely still state-owned,
progress is much slower. “Although
the smart cities initiative is driven by
a lot of money, energy utilities are
typically very conservative,” noted
Felicio.
In Asia, the biggest transformation
is ongoing in China, where the gov-
ernment says it will fully digitalise its
energy network by 2022. “We are
tracking it very closely and feel there
is denitely an opportunity there. But
we don’t yet have a clear view of how
they can achieve such a timeline,” he
said.
Digitalisation and IoT bring many
benets but there are also dangers.
The technologies allow adopters to
deliver myriad outputs without hav-
ing a large amount of resources and
the associated xed costs. “It allows a
company to be much lighter, more
dynamic and able to give much more
added value to the customer, and have
more direct contact to the customer,
etc.,” said Felico.
Yet, introducing IoT into a company
is not straightforward. “It’s not a case
of creating all of your stats and out-
comes at the beginning and imple-
menting steps one, two and three to
get there,” Felicio noted. “The world
is now much more dynamic and vola-
tile. You need to start with specic
assumptions, start implementing pi-
lots and quickly go to scale. But you
will only go to scale if you clearly
know the original intent and have
clear criteria on why you want to ex-
pand quickly. If you don’t have this
clear criteria, you will be in a proof-
of-concept hell where you don’t know
whether you will create value or not
by scaling, so you will be trying re-
peatedly and this will drag you down.
So there are positives and negatives.
“Sometimes it’s easy; like the large
utilities in North America. In Califor-
nia, for example, where there have
been res, they know they need wider
visibility and control of the substa-
tions. The risk has been recognised,
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
Interview
12
Omnetric believes the
ability to add value
through digitalisation
and IoT are key to
the success of utilities
– and to achieving
its own near-term
growth targets.
Junior Isles caught
up with Daniel Felicio,
the company’s new
CEO.
Adding value through
digitalisation
Felicio: Utilities will be concentrating more and more on
business optimisation
“… we can generate value through IoT and
digitalisation and create a new economy, not only in
energy but also in other industries”
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
13
Industry Perspective
H
ydrogen production is a pos-
sible key mechanism to a
zero-carbon energy system.
Currently available mature technolo-
gies for hydrogen production are
electrolysis from water and reform-
ing of natural gas. As power genera-
tion from renewable sources increas-
es, it is possible to anticipate a time
in the near future when peak output
will regularly exceed demand. Sur-
plus power can be converted to hy-
drogen. Hydrogen from renewables
is described as ‘green’. Production
of hydrogen from fossil fuels, using
techniques such as steam methane
reforming (SMR), is termed ‘brown’
if by-produced CO and CO
2
are sim-
ply discharged into the environment.
Marrying H production with carbon
capture, usage and storage (CCUS)
makes it ‘blue’ hydrogen, with car-
bon monoxide and dioxide. This too
can be compatible with a net-zero
carbon energy system by.
But so far, hydrogen for energy is
conceptually and technically in its
infancy. In the UK, some work on
adaptation of domestic appliances
and conversion of some industrial
thermal energy applications is under
way. There are limited plans for hy-
drogen fuel-cell vehicles and small-
scale power-to-gas. Two proposals
for bigger steam methane reforming
(SMR) with CCUS plants are in
train. However, there are no utility
scale hydrogen production projects
up and running anywhere, globally.
Rapid acceleration is required to
develop the systems we need to meet
2050 zero-carbon commitments.
More radical action by government
and industry is required to drive de-
velopment of a hydrogen-based en-
ergy system forward. Only by dem-
onstrating and scaling up the
systems, and guaranteeing a market,
can a robust and investable hydrogen
economy be created.
Clearer and more consistent poli-
cies would reduce risk for private in-
vestors. There is already a ban on in-
ternal combustion engine vehicles
from 2040 in the UK. This should be
accompanied by similar deadlines in
other consuming sectors, including a
commitment to run all combined cy-
cle gas turbines (CCGT) – the work-
horses of the current power system –
on hydrogen say by 2035. Direct
state involvement may even be need-
ed in the construction of major key
elements of hydrogen infrastructure,
such as new gas transmission and
distribution grids.
There are signs that the system can
work. Carbon taxes, market incen-
tives, the availability of cheap re-
newables, and half hourly pricing
that reects variation in the power
supply and demand balance, are al-
ready encouraging some hydrogen
output in northwest Europe. Hydro-
gen is becoming more valuable at
peak times due to its potential for
conversion to power in CCGTs and
fuel cell power plants.
Perhaps the most promising imme-
diate opportunity for hydrogen is for
energy storage. Renewables are
dogged by intermittency. When sup-
ply is high, prices fall. Indeed, sup-
pliers can be penalised for exceeding
demand. Meanwhile, there are peri-
ods when renewable power output
falls short of demand.
Converting surplus electricity to
hydrogen and using it in a gas tur-
bine or fuel cell to generate electrici-
ty would produce a hybrid solution
capable of evening out power supply
and maximising revenue. Cheap ex-
cess renewable electricity and vari-
able power prices in Europe have led
electrolysis unit manufacturers and
hydrogen production advisers, in-
cluding Air Liquide, Hydrogenics,
ITM Power, Nel Power and Siemens
to invest in such technologies.
But existing hydrogen production
units based on electrolysis are small.
Air Liquide’s largest, used in the
EU’s agship electrolysis project in
Austria, is only 6 MW.
Co-ordinated planning as well as
capital investment are needed in
electrolysis at scale, brown hydro-
gen with CCUS, hydrogen utilisa-
tion, and transmission, distribution
and storage.
Japan offers an interesting example
of the benet of government support.
It has yet to introduce carbon penal-
ties or price power in real-time and
has less cheap renewable power
available than the UK. But there
have been more extensive state
sponsored efforts to push hydrogen
development in tandem with private
companies.
In the UK and Europe, the state
could also play a key role by getting
directly involved. To date, govern-
ment has had to remove risk from
major private energy investment
projects, to attract private investors.
For example, the $20+ billion Hin-
kley C nuclear power project has a
government-guaranteed price for
power of £92.50/MWh.
One option now being considered
for large energy projects is the Regu-
lated Asset Base (RAB) model. The
state, acting through the energy regu-
lator, would ensure security of cash-
ows to private sector asset owner-
operators, so reducing the cost of
capital. This approach is favoured
for proposed SMR projects in the
UK. Their backers have different
motives for involvement, but all are
waiting for central government to
adapt the regulatory environment in
line with the national policy commit-
ment to net-zero carbon emissions
by 2050.
For the biggest hydrogen projects,
there may be just too much risk for a
private company or consortium, and
direct state funding and ownership
(as least initially) may be required.
This was the case when the existing
natural gas systems were established
in the 1970s. Such projects might in-
clude, in the UK, a 3000 km, multi-
billion-pound dedicated hydrogen
national transmission grid.
So far SMR with CCUS project
proposals have been far bigger than
electrolysis proposals. On the draw-
ing board are the Hynet Northwest
Partnership on the Mersey estuary,
backed by a consortium of gas dis-
tributor Cadent, oil and gas giant
Shell, and developer/port operator
Peel. In the northeast, a consortium
is backing a Teesside plant that will
supply Leeds. On Humberside, a
third SMR/CCUS hub is proposed
by oil and gas company BP with en-
ergy rms Centrica, Ørsted, Equi-
nor, Engie and Northern Gas Net-
works. In North Yorkshire,
generator Drax, Equinor and Na-
tional Grid Ventures (the transmis-
sion rm’s new energy technologies
arm), are aiming to develop a large-
scale hydrogen demonstrator on the
Drax site by the mid-2020s, com-
bining carbon capture from SMR
hydrogen production as well as
from thermal power production.
Some hydrogen-only pipelines
have already been built in Europe,
including Air Liquide’s pipeline
from France to Belgium, and a 210
km network in Germany. Up to 20
per cent hydrogen can be safely
blended with natural gas in existing
gas transmission and distribution
pipelines. Blending pilot projects are
going ahead at Keele and Leeds in
the UK.
In addition to SMR, several small
electrolysis plants are operating at
reneries, including Shell’s 10 MW
electrolysis plant in the Rhineland
renery in Germany (partnering with
ITM Power). Shell says it aims to
test the technology on an industrial
scale in order to develop new busi-
ness models, but its investments so
far are modest. BP has a similar re-
nery-based electrolysis project in
the Netherlands.
Blue hydrogen produced using
SMR with CCUS is an attractive in-
termediate step in the development
of a hydrogen-based energy system.
It provides a near-term market for
gas, helping oil and gas companies
to transition their businesses from
predominantly hydrocarbon-based to
renewable: The storage, transmission
and distribution infrastructure need-
ed for a functioning blue hydrogen
system will be the same as for green.
There are already green hydrogen
plants running on tidal energy in Or-
kney, as well as solar and wind else-
where. Various nuclear operators are
investigating the possibility of using
nuclear power to produce hydrogen
when prices are low (converting low
cost power into hydrogen via elec-
trolysis would enable it to be con-
verted back or sold on as a fuel when
prices rise). Norway plans to pro-
duce hydrogen from hydropower for
sale to Japan at a target price that
will outcompete a rival coal-fed
SMR project based in Australia.
Because hydrogen is such a low-
density gas, transportation is an issue
at scale. So, as well as local gas
pipeline and storage networks, other
transportation mediums need to be
considered. Options under develop-
ment include cryogenic liquefaction
of hydrogen – although this has ma-
jor costs and risks. A carrier process
using ammonia is more practical.
Splicing nitrogen and hydrogen to-
gether to create ammonia (NH
3
) is a
simple and easily reversible chemi-
cal engineering process. An ammo-
nia trading network already exists
globally, serving the fertiliser indus-
try, although existing networks
would need to be expanded dramati-
cally and modied to include con-
version facilities.
Hydrogen molecules can be chemi-
cally bonded into a class of materials
known as hydrogen carriers (HC),
which come in both liquid and solid
forms. Liquid organic HCs enable
transportation in regular tankers and
pipelines; solid HCs can be trans-
ported as freight. These HCs can be
non-toxic and fully inert, and very
cheap if produced at mass scale.
HCs can be charged and depleted re-
peatedly. The cost comes in the pro-
cess of bonding and separating hy-
drogen from them – hydrogenation
and dehydrogenation – and from
transporting the depleted HC back to
source for recharging.
Development of high capacity, low
cost, transportation is feasible – tech-
nically no more challenging than the
intercontinental transportation of
natural gas is today. Overcoming
that barrier would open up the possi-
bility of producing cheap solar pow-
er in the world’s deserts for con-
sumption in remote locations.
The transition towards a renew-
ables-hydrogen system is benetting
from the increasing number of inves-
tors acting on traditionally non-com-
mercial priorities. A quarter (or $20
trillion) of the world’s professionally
managed investments take account
of environmental, social and gover-
nance criteria. Fossil fuels increas-
ingly do not meet them.
Meanwhile, investors and insurers
are looking to reduce their exposure
to climate risks. The risk premium
for holding hydrocarbon stocks is
rising with every extreme weather
event. Meanwhile, emissions-free
hydrogen power is well aligned with
urban transport policies that address
the link between poor air quality and
harm to public health.
A comprehensive hydrogen sys-
tem, encompassing domestic and in-
dustrial power and heat, plus trans-
port, would support full energy
security. Building up stores of hy-
drogen would enable cities, regions
– perhaps entire countries – to ride
out inter-seasonal uctuations in re-
newable energy output, reducing re-
liance on fossil fuels imported from
abroad.
Large scale networks need to be
developed by the governments,
backed up by regulations based on
timelines for an accelerated growth.
Such projects can then be sold to the
private sector. Relying on energy
majors and private sector via RAB
models may be a mistake in the long
run as the current snail pace will
continue into the 2030s.
Further the public should be made
aware of the benets of using hydro-
gen to the society in addition to cli-
mate change. We can continue to
drive and y and let the next genera-
tion also experience the wonders of
the world. All of these milestones
can be achieved. Doing so involves
imparting some initial energy to the
hydrogen economy, to get it ready
to roll.
Dr Paramjit Mahi is Development
and Innovation Director, Energy
Sector, Mott MacDonald.
Progress towards
net zero carbon will
eventually require
the end of the use of
natural gas for all but
a small number of
critical applications.
Although hydrogen is
not an energy source,
it is a potentially
leading energy
vector.
Dr Paramjit Mahi
explores how to
accelerate the
hydrogen economy.
Dr Mahi: the public should be made aware of the additional
benets of using hydrogen to the society
H
2
and a zero-carbon world
THE ENERGY INDUSTRY TIMES - OCTOBER 2019
16
Final Word
W
ith the number of school
children demonstrating
globally and taking to the
stage at the recent UN Climate Change
Summit in New York, many adults
must be having ashbacks to school
days. But this time with roles reversed.
The scowl of teenage climate activist
Greta Thunberg as US President
Donald Trump made a eeting visit to
the summit was that familiar look your
English teacher might have given that
perpetually disruptive kid in class.
Heads of government, commercial
organisations, cities and municipali-
ties gathered in the ‘Big Apple’ at the
end of September knowing that they
have to take a huge bite out of carbon
emissions to stand any chance of
avoiding catastrophic climate change.
Last year a report from the Intergov-
ernmental Panel on Climate Change
found that limiting warming to 1.5°C
would require cutting emissions to net
zero by the middle of the century.
A report issued by DNV GL just a
couple weeks ahead of the New York
gathering highlighted the extent of the
task. Its forecast indicates that for a
1.5°C warming limit, the remaining
carbon budget will be exhausted as
early as 2028, with an overshoot of
770 Gt of CO
2
in 2050. Limiting
global warming to well below the 2°C
target of the Paris Agreement would
call for even greater acceleration of
solar and wind, as well as other tech-
nology measures, it said.
According to the company’s ‘Energy
Transition Outlook 2019’, solar
power would have to increase by more
than ten times to 5 TW and wind by
ve times to 3 TW by 2030, meeting
50 per cent of the global electricity
use per year. There would have to be
a 50-fold increase in production of
batteries for the 50 million electric
vehicles needed per year by 2030,
alongside investments in new tech-
nology to store excess electric energy
and solutions that allow electricity
grids to cope with the growing inux
of solar and wind power. Global en-
ergy efciency improvements would
need to increase by 3.5 per cent per
year within the next decade.
To address sectors outside electricity,
the report said green hydrogen would
be needed to heat buildings and indus-
try, fuel transport and make use of
excess renewable energy in the power
grid. It also noted that rapid and wide
deployment of carbon capture, utilisa-
tion and storage installations would
also be critical.
Commenting on the outlook, Ditlev
Engel, CEO of DNV GL Energy, said:
“Our research shows that technology
has the power to close the emissions
gap and create a clean energy future.
But time is against us. Those technol-
ogy measures can only be successful
if they are supported by extraordinary
policy action. We are calling for
government policies to expand and
adapt power grids to accommodate the
rise of renewables, economic stimulus
for energy efciency measures and
regulatory reform to accelerate the
electrication of transport. Govern-
ments, businesses and society as a
whole need to change the prevailing
mindset from ‘business-as-usual’ to
‘business-as-unusual’ to fast-track the
energy transition.”
The report also demonstrates that
the energy transition is affordable, as
the world will spend an ever-smaller
share of GDP on energy. “Technology
keeps giving us more for less,” said
Ditlev, noting that the UK now gets
“much more bang for the buck” for its
offshore wind projects compared to 10
years ago.
DNV GL’s report looks at the mar-
ket’s needs from a cost perspective, so
all of its forecasts for technology re-
quirements are based on what it sees
as the most cost-effective technologies
that can be deployed during the out-
look period.
Which technologies will ultimately
come through in the race to decarbo-
nise will indeed likely come down to
cost, although some will argue that we
need to use everything that is available.
But not all agree with this thinking.
Speaking during a recent panel debate
on innovations to tackle climate
change, held at the Finnish Ambas-
sador’s Residence in London, Mi-
chael Liebreich, Chairman, CEO of
Liebreich Associates and Founder of
and Senior Contributor to Bloomberg
New Energy Finance said: “Don’t do
stupid things.”
He stressed that rstly, money should
not be put into “stupid ideas”, such as
solar roads and hydrogen cars. “Hy-
drogen cars are a really stupid idea.
It’s really inefcient. If you gave me
free hydrogen, I would probably use
it to generate electricity and put that
in a battery [powered] electric vehicle.
So there are really stupid things you
can avoid doing.”
The second thing he advised is to put
money into areas “that are not stupid.”
Using decarbonisation of the steel
sector as an example, he said: “Al-
though you don’t want to pick winners,
that’s the sort of area where govern-
ments probably have to push lots of
R&D into. Saving money on the stupid
things means you would have money
to put into lots and lots of other things,
which you throw over the fence to the
private sector to turn into products and
applications and services.”
Liebreich added: “Direct air capture
is one of those stupid things; we should
be doing some R&D there but very
little. Thermodynamics says it’s a re-
ally stupid way to try and get hold of
CO
2
.” There is some obvious sense in
his belief. As one climate change
commentator recently noted: “we al-
ready have such devices, they are
called trees”.
Those responsible for the massive
res in the Amazon rainforest would
do well to take note. Such actions only
make the task of reversing climate
change all the more difcult.
Speaking at the same event at the
Finnish Ambassador’s Residence,
Professor Petteri Taalas, Secretary
General of the World Meteorological
Organization said their data showed
that CO
2
levels in the atmosphere
were the highest they have been in 3
million years and that the planet had
warmed by 1.1°C between 1850 and
2019. He also said sea levels had
risen 26 cm since 1800 and would rise
by between 0.5 and 2.5 m by the end
of the century.
These are worrying gures, high-
lighting the need for even faster action.
Speaking on the sidelines of UN Cli-
mate Week in New York, Mathias
Lelievre, CEO of Engie Impact, which
was created to accelerate the sustain-
ability transformation for corpora-
tions, cities and governments, said:
“What I have been hearing here has
been really consistent: let’s accelerate.
These conversations are really impor-
tant because they create momentum…
it’s about reminding everybody about
the level of priority at which the
transformation should be.”
Clearly it is not only the power and
energy sector that needs to double its
efforts; it is everyone – from munici-
palities and corporations down to the
everyday citizen. SaveMoneyCut-
Carbon, a consultancy rm, which
has helped several global bodies
shave energy expenses while reduc-
ing their carbon footprints, recently
noted that data showed that simply
reducing fossil fuel consumption is
not enough and that governments
must nd ways to persuade the gen-
eral public to do more.
Commenting on recent statistics that
showed many Britons are failing to
even make a dent when it comes to
reducing CO
2
, Mark Sait, CEO of
SaveMoneyCutCarbon, said the gov-
ernment needs to meet the British
public halfway if it is to meet its targets.
“The government will continue to set
hopeful targets, and will continue to
show its homework, but the way they
are appealing to the public is dampen-
ing their chances of success. The fact
of the matter is, everyday people are
having negligible impact on these
gures because of the societal and
personal pressures they are facing.”
Governments may have done their
homework in setting targets and poli-
cies and the energy sector has re-
sponded, but the science shows it is
not enough. The wider public needs to
be shown how to make practical
changes that can help the environment
without overtly disrupting their daily
routines – otherwise we will fail.
We have made good progress but
there is much more to do. If our chil-
dren were writing our school report
card on how we are doing, the sum-
mary would no doubt be: “Must try
harder.”
Must try harder
Junior Isles
Cartoon: jemsoar.com
