Industry chews EU renewable hydrogen definition
The EU has received more than 300 reactions from industry and other stakeholders to its draft legal definition of renewable hydrogen, but the legislative reality means major changes are unlikely.
Now comments are in the European Commission can finalise the legislation, after giving the European Parliament and EU member states a statutory period of two months to object. Neither have little room for to make detailed alterations, with either a majority in the parliament's plenary or an elevated majority of member states required to reject the commission's proposal outright.
The draft criteria, set out by the commission in May, generally require renewable fuels of non-biological origin (RFNBOs) and renewable hydrogen from grid-connected electrolysers to prove average renewable electricity shares in the concerned electricity bidding zones exceeding 90pc in the previous calendar year. Hydrogen production hours should also be no greater than a maximum number of hours related to the share of renewables in the bidding zone. And the commission wants the installation generating renewable power entering into operation less than 36 months before the electrolyser producing the renewable hydrogen.
Privately, industry sees the criteria as the best that could politically be achieved. But that did not prevent many of the 335 respondents restating their wishes. Hydrogen Europe called for the commission's "unnecessarily high" 90pc threshold to be lowered to 70pc and for the phase-in period for criteria to be extended to 2030 to enable uptake of more RFNBO projects at more competitive cost.
Hydrogen Europe wants the commission to change its stance on insisting hydrogen producers prove renewable hydrogen production takes place in the same calendar hour as the renewable electricity production, or that locally stored renewable electricity was used during such periods, to a monthly resolution.
A wide range of firms indicated the commission's 'green' electricity criteria would put the brakes on green hydrogen — made from renewable electricity — and make it difficult to realise hydrogen projects in general. Only allowing power from newly built, unsubsidised wind and solar plants for green hydrogen production after 2027 will make large-scale green hydrogen production impossible until after 2030, some said.
Others called more extensive 'grandfathering' to allow first electrolysers in operation beyond the commission's envisaged 2027, to benefit from the phase-in benefits for their lifetime. German renewables producer Sunfire specifically said the commission's criteria "strongly" favour certain geographies for renewable hydrogen production, mainly in Europe's "outermost" regions, but make it more difficult closer to centers of industrial demand.
The Renewable Hydrogen Coalition, chaired by Iberdrola chief executive Ignacio Galan, said it has "reservations" on the excessive levels of complexity and uncertainty placed on project developers. Proposed criteria can hamper security of electricity supply, impact hydrogen volumes and increase cost of fuels, the coalition said.
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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.
Japanese firms to start ammonia bunkering in May
Japanese firms to start ammonia bunkering in May
Osaka, 10 April (Argus) — A Japanese cross-industry group has moved forward with an ammonia bunkering project for a tugboat, with the first fuelling scheduled at Yokohama port in late May. The group, which includes power producer Jera, shipping firm NYK Line and its subsidiary Shin-Nippon Kaiyosha, ammonia producer Resonac and engineering firm Tokyo Power Technology, has jointly studied the possible setting up of ammonia bunkering for a tugboat since December 2023. Jera is to buy an unspecified type of ammonia from Resonac through Tokyo Power Technology and supply it to NYK and Shin-Nippon Kaiyosha. Jera said on 10 April it will supply the marine ammonia to NYK in late May to fuel the NYK-owned tugboat A-Tug , which will be in service at Yokohama port. The ammonia will be transported by a tanker truck and supplied by truck-to-ship operations. A-Tug is scheduled to be officially commissioned in June. Jera after starting normal operations plans to supply the marine ammonia to Shin-Nippon Kaiyosha, which will be in charge of operating the tugboat. The planned ammonia consumption of the tugboat was undisclosed, although the bunkering is scheduled to be done twice a month. Jera has geared up efforts to utilise fuel ammonia for power generation to substitute it for coal. Demonstration of co-firing ammonia and coal at its 1GW Hekinan No.4 coal-fired genereation unit achieved a 20pc mixture on 10 April after the test burning began on 1 April, it said. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Indonesia’s geothermal power offers H2 opportunities
Indonesia’s geothermal power offers H2 opportunities
Steady power supply from Indonesia's abundant geothermal resources could yield impressively low levelised hydrogen production costs, writes Akansha Victor Mumbai, 9 April (Argus) — Indonesia has high hopes for turning stable power supply from geothermal energy into hydrogen, although capacity expansions could prove challenging and widespread hydrogen adoption might need more policy thrust. With its prodigious volcanic activity, Indonesia is keen to leverage geothermal energy, state-owned energy firm Pertamina Geothermal Energy's (PGE) director, Julfi Hadi, said at a webinar organised by media outlet DE TV last week. The country already has the world's second-largest geothermal capacity, at around 2.4GW, trailing only the US. PGE is planning to add another 1GW in the next two years, some of which will be used for hydrogen production, especially in West Java, North Sumatra and North Sulawesi, Hadi said. Geothermal energy provides a constant power supply, unlike intermittent solar photovoltaic (PV) and wind resources. This means that electrolysis plants can achieve much higher load factors — something that should push down levelised costs of hydrogen production. PGE is planning to start small, however. A pilot project in Ulubelu will initially produce just over 100 kg/d, or less than 40 t/yr, from 300kW of geothermal power. PGE has launched a tender for engineering, procurement and construction services and has brought carmaker Toyota on board as an offtaker for the hydrogen. In the future, PGE hopes to produce as much as 110,000 t/yr from geothermal energy, Hadi said. But future prospects will depend on the extent to which PGE or other companies can navigate challenges around expanding capacity. Indonesia's geothermal potential stands at over 23GW, so it is currently utilising just over 10pc of this, Hadi said. By 2035, installed capacity could climb above 9GW, he added, but this would still be less than half the country's overall potential. Exploration risks and limited access to funding for developers could make it difficult to build out the capacity more quickly, Hadi noted. Most of the geothermal potential is in remote mountainous areas with limited connectivity to major cities, Hadi noted. This could make delivering geothermal power — and potentially the molecules made from it — difficult and costly. Fuelling development More fundamentally, future hydrogen production from geothermal power will also depend on the adoption of renewable hydrogen as a fuel or feedstock. At last week's webinar, industry participants urged more decisive government support for the sector. In its hydrogen strategy from last year , Jakarta outlined possible mechanisms to make clean hydrogen more competitive, such as expanding its carbon market, but it has made no firm commitments yet. The government needs to provide "friendly" policies for hydrogen investments and should resolve "regulatory and licensing obstacles", state-owned firm PLN Indonesia Power's vice-president of asset management, Dwi Handoyo, said. PLN already produces small amounts of renewable hydrogen, primarily for cooling power generators. Going forward, it aims to use renewable hydrogen and ammonia for co-firing at its gas-fired power plants (see table). It has also signed a deal to supply renewable hydrogen to state-owned fertiliser firm Pupuk Indonesia and has an agreement for 100,000 t/yr of exports to Singapore with energy firm Sembcorp. Hadi also called for support measures, such as corporate tax relief or grants, or the transfer of subsidies from fossil fuel projects to renewable hydrogen ventures. Road transport could be an early use case for renewable hydrogen and PLN opened Indonesia's first renewable hydrogen refuelling station in February . But Jakarta needs to encourage uptake of fuel cell vehicles to spur on the industry, PT Toyota Motor Manufacturing Indonesia's director, Koko Widjanarko, said. PLN co-firing pilots Province Co-firing plan* Jakarta 5,800 t/yr hydrogen South Sumatra 3,000 t/yr ammonia East Java 7,700 t/yr ammonia Bali 300 t/yr hydrogen *volumes would amount to 20pc co-firing in each of the plants - PLN Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
OCP and Fortescue explore green projects in Morocco
OCP and Fortescue explore green projects in Morocco
London, 9 April (Argus) — Moroccan fertilizer giant OCP Group and Australian iron ore and renewable energy firm Fortescue Energy have announced a joint venture in Morocco to produce green hydrogen, ammonia and fertilizers for domestic and export markets. The partnership will look into developing a production facility, alongside a research and development (R&D) hub, to advance the renewable energy industry in Morocco. The partners have proposed plans for four projects in Morocco. The production facility will involve large-scale integrated green ammonia and green fertilizer production capacity, including renewables, energy generation, electrolysis, ammonification and fertilizer production. The venture will also look at developing the manufacturing of green technology and equipment. The third element is an R&D and technology hub, located near Marrakech, to bolster research in renewable energy, green hydrogen and minerals processing. OCP and Fortescue also outlined collaboration of corporate venture capital funds to drive investment in key technology advancements. Further details about potential production volumes, timelines and financial investment have not been disclosed. The venture is subject to customary closing conditions, including regulatory approvals. Morocco is hoping to be a major participant in the global energy transition because of vast wind and solar resources, two large coastlines, and its proximity to Europe and the Americas. Its lack of gas resources results in significant annual ammonia import requirements for fertilizer production. The region has previously touted longer term plans to reinforce its domestic supply chain by building ammonia plants in Morocco and reducing its reliance on imports. OCP is one of the biggest global importers of ammonia used as a raw material for phosphates and NPK production, consuming around 10pc of global merchant trade. Moroccan ammonia imports are set to reach nearly 2mn t this year into Jorf Lasfar. OCP buys predominantly from the Americas and the Middle East, having previously been dependent on Russian ammonia. OCP's plan to use green hydrogen produced from solar and wind power as a raw material to make ammonia is part of a $13bn green investment strategy the company announced last year to transition to 100pc renewable energy by 2027. Nearly 100 domestic and international companies have expressed interest in setting up renewable hydrogen projects in Morocco, according to the government. Most projects are still in the early stages and will take years to start production. By Ruth Sharpe Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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