According to a new study, there are “big hurdles” between making the hopper of “proposed” hydrogen projects in the UK and Europe an economic reality.
Northwest Europe has a collection of potential projects, which are part of a global pipeline worth more than $ 300 billion (Â£ 222 billion) according to consultancy Westwood Global.
However, the industry faces a “chicken and egg dilemma” as countries have the potential to produce hydrogen but lack clarity on end use like transport or heating. At the same time, these end-use markets will only develop when hydrogen is seen as an attractive alternative fuel.
Although fuel has been hailed as a ‘game changer’ for decarbonization, structural obstacles – like the need for huge investments in the steel sector, for example, to use it – or the use of fuel. cheaper alternatives, require concentration.
This can be managed by “matching the desirability of hydrogen with the needs of a country,” Westwood said, prioritizing sectors where it is most needed, which could include iron and steel, chemical processes. or refining, among others.
In addition to matching the right opportunity with the right country, Westwood stressed the need for âcollaboration and synergiesâ.
Westwood highlighted the UK where operators in the North Sea hope to link blue hydrogen production to carbon capture and storage (CCS).
He said: âSynergies are created between major emitters (eg heavy industry, power sector) and oil and gas sector.
âThis takes advantage of the availability of depleted oil and gas fields in the North Sea near industrial sites (or ‘clusters’) for the generation of blue hydrogen and the storage of CO2.
However, while the collaborations have created a pipeline of “conceptual projects“, only those with a strong facilitator managed to move from concept to final investment decision (FID).
Westwood therefore said that “business case enablers” such as the PX2 Alliance in Denmark, a collaboration between the wind and hydrogen sectors, are needed to bring clarity to businesses and align. on government policies.
The authors of the report, David Linden and Ricardo Grandas-Vargas, added: âThe complexity associated with developing hydrogen projects can be managed by matching the hydrogen desirability to the needs of a country, identifying the synergies and opportunities for collaboration throughout the value chain and, most importantly, determining a business case. facilitator – who creates alignment and supports the development of country / project specific support mechanisms.
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