India sees hydrogen as transportation, industrial fuel
India plans to create a hydrogen-based economy focusing on transport fuels and industry as a way to reduce dependence on fossil fuels, oil minister Dharmendra Pradhan said today.
A pilot project in Delhi to run 50 buses on a hydrogen-compressed natural gas (H-CNG) blend will be expanded to other major cities in the coming months, Pradhan said.
"Through technological advancements, we are blending hydrogen with compressed natural gas for use as a transportation fuel as well as an industrial input to refineries," he said. "We are looking forward to introducing H-CNG as an intermittent technology in a big way for both automotive and domestic cooking applications."
India's biggest refiner state-controlled IOC has initiated a project at a refinery in Gujarat to manufacture blue hydrogen using natural gas and carbon capture technology, Pradhan said. There are also plans to leverage India's growing CNG pipeline infrastructure to reduce the transportation cost of hydrogen.
India depends on imports of crude and LNG to meet 85pc and over 55pc of its requirements respectively. A spat with Opec and Saudi Arabia over oil prices has prompted the government to step up its search for alternatives.
Several states in India have announced lockdowns to combat a rising tide of Covid-19 cases, which crossed a record 200,000 in the last 24 hours. Cases have increased more than twentyfold since early February. India is the world's second most infected nation after the US.
Overall fuel demand in India contracted for the first time in the 2020-21 fiscal ending March, dropping by a record 9pc to 194.6mn t from 214mn t a year earlier, according to the oil ministry. Diesel use fell by 12pc to 1.49mn b/d and gasoline demand declined by 7pc to 647,000 b/d over the period.
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US Gulf lowest-cost green ammonia in 2030: Report
US Gulf lowest-cost green ammonia in 2030: Report
New York, 16 April (Argus) — The US Gulf coast will likely be the lowest cost source of green ammonia to top global bunkering ports Singapore and Rotterdam by 2030, according to a study by independent non-profits Rocky Mountain Institute and the Global Maritime Forum. Green ammonia in Singapore is projected to be sourced from the US Gulf coast at $1,100/t, Chile at $1,850/t, Australia at $1,940/t, Namibia at $2,050/t and India at $2,090/t very low-sulphur fuel oil equivalent (VLSFOe) in 2030. Singapore is also projected to procure green methanol from the US Gulf coast at $1,330/t, China at $1,640/t, Australia at $2,610/t and Egypt at $2,810/t VLSFOe in 2030. The US Gulf coast would be cheaper for both Chinese bio-methanol and Egyptian or Australian e-methanol. But modeling suggests that competition could result in US methanol going to other ports, particularly in Europe, unless the Singaporean port ecosystem moves to proactively secure supply, says the study. In addition to space constraints imposed by its geography, Singapore has relatively poor wind and solar energy sources, which makes local production of green hydrogen-based-fuels expensive, says the study. Singapore locally produced green methanol and green ammonia are projected at $2,910/t and $2,800/t VLSFOe, respectively, in 2030, higher than imports, even when considering the extra transport costs. The study projects that fossil fuels would account for 47mn t VLSFOe, or 95pc of Singapore's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia (about 1.89mn t VLSFOe) and green methanol (3.30mn t VLSFOe). Rotterdam to pull from US Gulf Green ammonia in Rotterdam is projected to be sourced from the US Gulf coast at $1,080/t, locally produced at $2,120/t, sourced from Spain at $2,150/t and from Brazil at $2,310/t. Rotterdam is also projected to procure green methanol from China at $1,830/t, Denmark at $2,060/t, locally produce it at $2,180/t and from Finland at $2,190/t VLSFOe, among other countries, but not the US Gulf coast . The study projects that fossil fuels would account for 8.1mn t VLSFOe, or 95pc of Rotterdam's marine fuel demand in 2030. The remaining 5pc will be allocated between green ammonia, at about 326,000t, and green methanol, at about 570,000t VLSFOe. Rotterdam has a good renewable energy potential, according to the study. But Rotterdam is also a significant industrial cluster and several of the industries in the port's hinterland are seeking to use hydrogen for decarbonisation. As such, the port is expected to import most of its green hydrogen-based fuel supply. Though US-produced green fuels are likely to be in high demand, Rotterdam can benefit from EU incentives for hydrogen imports, lower-emission fuel demand created by the EU emissions trading system and FuelEU Maritime. But the EU's draft Renewable Energy Directive could limit the potential for European ports like Rotterdam to import US green fuels. The draft requirements in the Directive disallow fuel from some projects that benefit from renewable electricity incentives, like the renewable energy production tax credit provided by the US's Inflation Reduction Act, after 2028. If these draft requirements are accepted in the final regulation, they could limit the window of opportunity for hydrogen imports from the US to Rotterdam to the period before 2028, says the study. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Capital costs slow renewables in developing world
Capital costs slow renewables in developing world
New York, 16 April (Argus) — Higher cost of capital in emerging economies for clean energy technologies remains the key challenge for attracting investments to meet the goal set last year of tripling global renewable capacity by 2030. Developing nations, excluding China, need to spend around $2.4 trillion/yr on clean energy and climate resilience by 2030 to help reduce global warming, according to the UN. But governmental and development spending will fall short, said Avinash Persaud, the special adviser on climate change to the president of the Inter-American Development Bank. "There are not enough subsidies in the world to blend 2.4 trillion/yr every year to fund the energy transition," Persaud said today at the Columbia Global Energy Summit in New York. And characteristics of renewable energies make filling the gap with private-sector financing more difficult than for traditional hydrocarbons. Some clean energy technologies such as solar plants and wind farms have seen their cost of capital decreasing in more developed regions. But this cost, or the minimum expected financial return to justify an investment, for utility-scale solar PV projects in emerging and developing economies was more than twice that in advanced economies last year, energy watchdog the IEA has said. The biggest risk for developing clean energy projects in emerging economies stands on currency risks, according to Persaud. "When an investor in the developed world invests in an oil, gas, coal project in a developing country they know they have an asset that is going to earn them a foreign currency revenue if they need it. They can export that," he said, adding that the case for renewables plants is different, raising the financial risk of projects. Investors in a solar farm are paid by local consumers of the utility in local currency, increasing the hedging cost. The IEA has estimated that narrowing the gap in the cost of capital between emerging and developing economies and advanced economies by 1pc could reduce financing costs for clean energy by $150 bn/yr. By Jacqueline Echevarria Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore, Rotterdam advance 'green' shipping corridor
Singapore, Rotterdam advance 'green' shipping corridor
Singapore, 15 April (Argus) — The Singapore-Rotterdam Green and Digital Shipping Corridor (GDSC) is accelerating its decarbonisation efforts with new partners, and is advancing initiatives to encourage the uptake of sustainable marine fuels. The world's two largest marine fuel hubs established the Singapore-Rotterdam GDSC in August 2022, in a push for maritime decarbonisation and digitalisation between the ports. There are 26 global value-chain partners in the GDSC initiative including fuel suppliers, shipping lines, knowledge partners and financial entities. German container shipping line Hapag-Lloyd is the latest partner in the Singapore-Rotterdam trade lane, committing to operate large container vessels on zero and near-zero carbon emission fuels. Hapag-Lloyd is the world's fifth-largest liner shipping firm with at least 260 ocean-going vessels, according to the Maritime and Port Authority of Singapore (MPA). GDSC working groups will also pilot the uptake of sustainable marine fuels — like bio-methane, methanol, ammonia, and hydrogen — and test out commercial structures to reduce cost barriers in switching to alternative fuels. This includes a bio-methane working group that is studying regulations and standards to support adopting the fuel for marine bunkering on a commercial scale. GDSC partners also plan to carry out bio-LNG bunkering pilots over 2024-25, based on a mass balancing chain of custody principle. A methanol working group is working on fuel standards and knowledge exchange, in addition to addressing common challenges to carry out commercial methanol bunkering at Singapore and Rotterdam. And an ammonia working group is developing a framework to assess the lifecycle greenhouse gas intensity of green ammonia for bunkering, to be completed by 2025. Improvements to digitalisation have also been made as part of the GDSC initiative, with Singapore and Rotterdam successfully piloting an exchange of port-to-port data. Both ports will be able to exchange vessel arrival and departure times for port planning, and ships travelling between Singapore and Rotterdam can also optimise their port call voyage. The maritime sector is pushing towards a more resilient and efficient energy transition, and participants have pointed out that collaboration between countries and stakeholders would be key to green shipping corridors . The GDSC is a "very valuable collaboration in accelerating the twin transition: the integration of digital innovation in energy transition efforts," said chief executive officer of Port of Rotterdam Authority (PoR), Boudewijn Siemons. "Not only are we seeing the first results in standardization and data sharing for Port Call Optimization but also the first steps in moving towards operationalization of zero and low carbon fuels on this trade lane." Progress on the GDSC development also reflects that "public-private collaboration across global value chains can be achieved," said MPA chief executive Teo Eng Dih. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU to publish H2 bank pilot results on 30 April
EU to publish H2 bank pilot results on 30 April
Amsterdam, 10 April (Argus) — The European Commission will publish the results of its €800mn hydrogen bank pilot auction on 30 April, EU Innovation Fund policy officer Johanna Schiele said today. The commission will release a wide range of information about the successful bids, expected levelised costs of hydrogen production and the intended origin of electrolysers used in the projects, Schiele told the Reuters Hydrogen 2024 conference in Amsterdam. The ceiling price of €4.50/kg for bids submitted in the auction "was more than sufficient", she said, suggesting that successful bids may have stayed well below this threshold. Through the mechanism, the commission will award 10-year production subsidies to the renewable hydrogen projects that submitted the lowest bids in the auction. Bids closed in early February and the commission previously said that applications were submitted for 132 projects in 17 different countries , amounting to 8.5GW electrolyser capacity that could produce some 880,000 t/yr of renewable hydrogen. But only a fraction of these will likely win subsidies in this round. The commission is confident that successful projects will be built, Schiele said. Developers had to submit a completion bond for 4pc of the subsidy value which they will lose if they do not finish their projects. Plants have to be built within five years. Schiele insisted that the commission is happy with the level of interest in the auction and the design it chose. The UK opted for a different path with a contracts-for-difference (CfD) mechanism that involved negotiations between the government and the developers to agree on subsidy levels, but entering into negotiations would have been a more complex and potentially more costly approach , Schiele said. Subsidy levels increased during the UK's negotiation process and could eventually amount to around £12/kg (€14/kg), partly depending on the development of natural gas prices, she added. The EU may yet switch to a CfD approach at a later stage when the industry matures, Schiele said . The UK government argued that its mechanism provides greater investment certainty and could unlock a pipeline of subsequent projects . Round two The commission expects to launch a second, larger hydrogen bank auction later this year, at around the same time as the pilot auction last year, Schiele said. The bidding window for the pilot auction opened in December 2023 and bids closed in February. The second auction will have a budget of around €2.2bn and will take learnings from the first round into account. A launch towards the end of the year would mark a significant delay from previous plans. Commission president Ursula von der Leyen had said that the second round could take place in spring 2024 . Meanwhile, Belgium is considering putting forward some of its own funds to use the hydrogen bank's "auction-as-a-service" mechanism in support of domestic renewable hydrogen projects, the Renewable Hydrogen Coalition's impact director Francois Paquet said at the Amsterdam conference. Germany used that option for the pilot auction, putting in €350mn to subsidise the most competitive German projects that miss out on support in the EU-wide part of the auction. And Austria has already announced plans to top up the second round with €400mn to support domestic projects. For Belgium, the hydrogen bank could provide a route for pushing projects forward, many of which have fallen behind schedule . The Renewable Hydrogen Coalition is trying to convince more governments across the EU to make use of the auction-as-a-service mechanism, Paquet said. It is intended to avoid market fragmentation caused by EU countries using different subsidy mechanisms. France, Denmark, the Netherlands and Italy have organised or announced mechanisms for subsidising production projects outside of the hydrogen bank scheme. By Stefan Krumpelmann Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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