Low Carbon Pulse - Edition 11
Global Developments in progress towards net-zero emissions
Welcome to Edition 11 of Low Carbon Pulse – sharing significant current news on the progress towards net-zero emissions globally. This Edition covers the period from February 24 to March 7, 2021.
During the second week of March, we will publish Part 1 of the second article in The Shift to Hydrogen (S2H2): Elemental Change series. It will be titled What needs to be decarbonized? And what role can hydrogen play? It will assess GHG emissions by sector and industry, and the role that renewable electrical energy (electrons) and hydrogen (molecules) has to play in the decarbonization of each sector and industry.
Part 2 of the article will be published during April and will provide A Guide to Hydrogen Road Maps, Plans and Strategies.
PRC's 14th Five Year Plan:
On March 5, 2021, the National People's Congress (NPC) and Chinese People's Political Consultative Conference (CPPCC) were authorised to release the draft outline of the 14th five-year plan (2021-2025) for national economic and social development and the long-range objectives through the year 2035 (Summary). It is a high level summary outlining development, guidelines and main targets. The key take-away from the Summary is the PRC is targeting 20% (20% Target) of total energy use to be sourced from non-fossil fuel sources. The challenge for the PRC is that it is continuing to develop and to urbanise, and in this context it is likely to have to continue to revisit its policy settings. In this context, with increased growth in total energy use, and therefore the mass of GHG emissions arising, and the speed of that growth (as the PRC progresses to peak GHG emissions), it may be that the 20% Target will need to be revisited, possibly before 2025.
See:
- News Analysis: How China's five-year plans catalyze its rejuvenation
- China Focus: Revival-seeking China unveils action plan for modernization
- China to formulate action plan for peaking carbon emission before 2030
- China to promote green development during 14th Five-Year Plan period: report
IEA review energy use in Japan:
In the first week of March, the International Energy Agency (IEA) issued a report on energy use within Japan. The report commends the Green Growth Strategy in line with Carbon Neutrality in 2050 released in December 2020. The IEA report summarises the energy mix currently being contemplated in Japan as follows: the demand for electrical energy to be matched by between 50 and 60% from renewable electrical energy, 10% from hydrogen and ammonia as fuel, and between 30 and 40% from nuclear and thermal plants, with those thermal plants using CCS / CCUS (with any new thermal plants to be required to be "carbon capture ready"). The overriding theme of the IEA report is the layered and multifaceted nature of the transition on which Japan is embarking, not defined by, but needing to be responsive to, the current level of fossil fuel use in Japan, and the limited "cavern" sites suitable for CCS. Japan is responding to these factors, having already developed the world's first hydrogen energy chain (see Edition 10 of Low Carbon Pulse), and looking at the means of use of CO2, arising / derived from chemical production, including methanation, and the development of low carbon technologies (including concrete production that does not require cement).
Up to 210 GW of solar PV to be installed in 2021:
Global:
Leading publication, BloombergNEF (BNEF), forecast, on February 24, 2021, that up to 210 GW of solar photovoltaic (PV) capacity may be installed in 2021. The forecast of up to 210 GW exceeds earlier forecasts. On the forward curve for 2022 and 2023, installation of PV solar capacity installation is forecast at 221 GW and 240 GW.
Head of Solar at BNEF, Ms Jenny Chase, has noted that the PRC has "hit the accelerator" given its commitment to achieve net-zero GHG emissions by 2060.
In a great quote, something that may apply to any number of countries, Ms Chase says:
"I don’t think anyone really knows how they're going to get to net-zero, but the obvious place to start is just to build a load of renewables"
see: Up to 209GW of solar PV to be installed in 2021, BloombergNEF forecasts
Leading countries:
As might be expected, the PRC is forecast to lead the way in 2021 (and thereafter) with up to 75 GW to be installed (and given the final installations in 2020, it might be as high as 90 GW). The EU and the US are increasing the installation of solar capacity. Importantly, India is starting to gain momentum in the installation of utility-scale solar in 2021, with up to 10 GW of PV forecast to the installed, with around 5.7 GW of new solar capacity to be installed by mid-2021.
While India is developing its renewable energy capacity, it needs to be doing so at a faster pace than the PRC. To do this, it is likely that more developed countries will provide assistance to India in this endeavour, possibly first to transition to natural gas in terms of scale base-load, while at the same time working with the Government of India to develop the roll-out of solar and renewable capacity.
See: India could install 9.7 GW of new utility-scale solar in 2021
Renewable energy market hot in Chile:
It was reported on March 3, 2021 that Spanish renewable energy company Ibereolica has proposed the development of a 1.17 GW solar (675 MW) and wind (496 MW) project in the north of Chile (ERNC Antofagasta Project). Spanish oil and gas major is in a joint venture with Ibereolica, and, it is reported that Repsol has an option to acquire Ibereolica from 2025. Repsol, through Repsol Renovables, plans to have installed 4.5 GW of clean energy generation capacity by 2025.
See: Spanish company plans 1.17 GW hybrid solar-wind complex in Chile
France's ninth round of large scale solar:
On February 21, 2021, CRE (France's energy regulator) announced the result of the ninth tender for larger and utility scale solar PV projects, awarding 451.9 MW of on-shore capacity. Leading French renewable energy company, Neoen was awarded 73.8 MW of capacity, with other leading players, Engie (awarded 61.4 MW) and Total Quadran (49.4 MW). The telling feature of the ninth round compared to the eighth round was that the price per kWh was higher. These tendered prices tend to indicate a less willing market, or fewer participants, or possibly both.
See: France allocates 451.9 MW in ninth tender for large scale PV
UK defines role of new investment policy bank:
In the latest UK budget handed down on March 3, 2021, the UK Government published details of the new UK Infrastructure Bank (UKIB). The UKIB is being set up: (i) to help tackle climate change, particularly meeting the UK Government's net-zero emissions target by 2050; and (ii) to support regional and local economic growth. It is hoped that the UKIB will repeat the success of the UK's Green Investment Bank (now part of Macquarie Bank). The UKIB s intended to accelerate investment in UK Infrastructure, with the emphasis on the following key objectives: (a) to provide leadership in the market for the development of new technologies; (b) to facilitate the crowding-in of private capital into key infrastructure sectors; (c) to provide cornerstone investment into new projects; (d) to make available financial tools to facilitate the development of new infrastructure projects; and (e) to bring together core stakeholders in order to facilitate further investment in key sectors. While the UKIB is to have a broad mandate, it will focus on clean energy, digital, transport, waste and water, and will have financial capacity of £22 billion (£12 billion of equity and debt capital, and the ability to issue £10 billion of guarantees). UKIB will draw funds from HM Treasury and may borrow from the private markets.
The creation of the UKIB goes a considerable way to fulfilling the role of the European Investment Bank (EIB) before Brexit.
Roof-top solar growth not topping out down-under:
Early indications are that the roof-top solar installations in 2021 will be over 3.5 GW in the Australian market. It is fair to say that the Australian market reached a tipping point on both roof-top and utility solar installation a while ago, but both parts of the sector have shown no sign of topping out. While Australia has a relatively small population by size of country, the population is concentrated, and the concentration is likely to continue to fuel the growth in roof-top solar, the cost of which, like utility solar, continues to fall in real terms.
See: Rooftop solar installs head for more than 3.5GW in 2021 after record start to year
Germany undertakes first centralised off-shore wind tender:
On February 26, 2021 three off-shore fields were tendered by Germany, two sites in the North Sea (with combined capacity of 658 MW, located about 30 to 40 kilometres north of Borkum Island) and one site in the Baltic Sea (with capacity of 300 MW, located about 40 kilometres northeast of Rugen). The tender process is open until September 1, 2021, and is being run under a centralised model dealing with funding, grid connection and planning approvals and permitting. The bidder or bidders with the lowest funding requirement from Government will prevail. Those awarded will be required to install the bid capacity by 2026.
See: Germany Puts Three New Offshore Wind Sites Out to Tender
Concentration on COP 26 and 2030:
It will be apparent that 2030 is a key date for the move towards net-zero carbon by 2050; it provides direction and speed of travel, and the speed of travel appears to be increasing.
- Iberdrola (the Spanish renewable energy colossus) plans to spend €150 billion to expand its installed renewable energy capacity to around 95 GW by 2030, to develop further its portfolio of solar and wind assets, and to add battery storage and production of green hydrogen (with electrolysers increasingly being regarded as energy carrier production and energy storage facilities).
See: Iberdrola to spend €150bn trebling its growing wind and solar empire
- End of year stock-take: Stock-takes undertaken by Parties to the Paris Agreement, and submission of GHG emissions data ahead of COP 26, indicate hoped for reductions in GHG have not been achieved. On February 26, 2021 the UN released a report which concludes that the NDCs of Parties would achieve a less than 1% reduction in GHG emissions from 2010 levels by 2030 (based on projected increases in GHG by 2030). In light of the report, UN Climate Chief, Patricia Espinosa stated: "What we need to put on the table is much more radical and much more transformative than we have been being until now". This might be expected to be the case at COP 26. It is difficult not to agree with this assessment, but developed nations need to be doing more themselves, and they need to be assisting other countries, critically, India, to decarbonise.
At the moment, it is necessary to adopt book-end thinking, between the Stabilisation Goals (which is arguably within reach – see Edition 5 of Low Carbon Pulse) and the Stretch Goal (at the moment, by common consensus among the climate scientists is not within reach).
This book-ending is critical - achieving the Stretch Goal is an ideal. It would be good however if the narrative, and thinking, reflected this. Also it would be good if all thinking was framed against the NDCs of each country, and in the context, progress towards electrification. For example, the US renewable industry was making huge strides in the installation of renewable energy sources absent supportive policies at a Federal level, and the PRC has been installing renewable energy sources at an ever increasing rate since well-before President Xi's announcement of the PRC progressing towards net-zero by 2060.
While climate change needs cool heads, it needs deeper reduction commitments from more developed countries to allow countries at a different point on the development curve to be able to reach peak emissions at a point in time at some point between the Stretch and the Stabilisation Goal.
It is known that there is a global carbon budget, and it is hoped that the IEA's The World's Roadmap to Net Zero by 2050 will allow a greater focus on the global carbon budget. The IEA's Roadmap is due to be released on May 18, 2021, well ahead of COP 26 in Glasgow in November 2021. This gives Parties to the Paris Agreement time to get their collective heads around the need to do more.
See: Carbon-cutting pledges by countries nowhere near enough: UN report
We are nowhere near keeping warming below 1.5°C despite climate plans
CLEAN Future Bill:
On March 3, 2021 the CLEAN Future Act was reintroduced in the US Congress. The headlines focused on progress to achieve net-zero GHG emissions by 2050, with an intermediate target of achieving a 50% reduction from 2005 levels by 2030. It has been recognised that while the Biden Administration has a number of levers, there needs to be legislation.
See: Democrats Relaunch Bill To Make U.S. Carbon Neutral By 2050
Carbon Tax and CCS / CCUS:
In contrast, it has been reported that the American Petroleum Institute (API) is close to supporting a carbon tax as an alternative to federal regulation, including under the CLEAN Future Act. It is reported that API supports an economy-wide carbon tax (or if you will a carbon pricing mechanism) as the primary policy setting on climate change. The stated logic for this is to keep energy affordable. This contrasts with mandatory obligations under federal regulation. In this context, major oil and gas companies, including Chevron, Exxon-Mobil and Occidental are looking at the development of CCS / CCUS, being a recognised means of sequestrating, rather than abating GHG emissions, "a bury instead of [decarbonise] strategy".
As will be apparent from policy settings globally, it is possible to decarbonise energy use, while at the same time maintaining affordable energy. Modelling shows that this is achievable in the US, possibly even more so because of the ability of the private sector in the US to innovate and to respond to policy settings. It is clear that there remains a balance to be struck between decarbonisation of energy use achieving net-zero GHG emissions by 2050, and to reach peak GHG emissions as soon as possible. In many parts of the world, natural gas has an increasing role to play (includng LNG), and this is recognised, but to be assured of addressing climate change, policy settings need to decarbonise energy production and use over time. Those policy settings should acknowledge the need to grandparent some fossil fuel sources over time.
In a recent World Economic Forum paper it is noted that the energy mix in 2030 will comprise up to 2/3 of fossil fuels, and that in this context it is not possible to have coherent policy settings without including CCS / CCUS. The paper reminds us that GHG emissions must decline by 7% each year until 2030 if the Stretch Goal (in the Paris Agreement) is to be achieved. As such, there is a need to reduce GHG emissions at a utility level scale.
A recent Wood Mackenzie report supports this proposition. The Wood Mackenzie report also notes that carbon pricing must increase by 600% if they are to discourage activities that give rise to GHG emissions. It is clear that it is known what needs to be done, but policy settings are needed to allow the private sector to respond in a timely manner to those policy settings, while at the same time recognising that government has an active role to play in CCS / CCUS.
See: Top oil and gas lobbying group close to backing a carbon tax
Exxon’s CEO sees golden opportunities in carbon capture
Why private capital is the key to unlocking carbon capture at scale
Carbon needs to be much pricier to limit climate change: Report
Natural Gas as a transition fuel:
In some parts of the world the use of natural gas is being phased out, principally because it is regarded, correctly, as giving rise to GHG emissions. And yet in other parts of the world, natural gas is seen as a transition energy carrier, allowing electrification of countries. This is particularly the case in South Asia and South East Asia. Further, natural gas continues to be a key energy carrier in Japan and Korea, and this is likely to remain the case. While an immediate transition to renewable electrical energy and energy carriers may be regarded as the preference, it is likely that natural gas (including LNG) will continue to be used in staged progress towards net-zero GHG emissions, including with greater monitoring and capture of fugitive emissions and more effective CCS / CCUS, and the use of carbon credit mechanisms to match the GHG arising from the use of natural gas.
See: Natural Gas Is Driving Decarbonization In India
The emerging clean energy superpowers:
In a widely reported speech given in Sydney, Australia, AXA IM, Chief Investment Officer, Mr Chris Iggo, has provided an institutional investor perspective on corporations and countries. At the corporation level, Mr Iggo noted that "the status quo is becoming uneconomic" over the medium term. The Building and Infrastructure and Agriculture, Forestry and Land Use sectors will need to respond to being carbon emitters.
Mr Iggo noted that renewable energy could be:
" ... a great long story for Australia and some emerging market countries which are renewable energy-rich. A full
transition to renewable energy could really transform these economies …"
See: Switch to 100 pct renewables will drive economic growth, but watch for green bubbles: AXA
New Hydrogen Corridor:
On February 24, 2021 it was announced that 78 organisations have established a consortium – the Basque Hydrogen Corridor. The objective of the consortium is to develop 34 identified projects to develop a hydrogen supply chain, and to allow Spain to benefit from the development of the hydrogen industry, and then as a hydrogen economy.
The projects contemplated are to be developed in two phases, the first phase to run to 2026. During the first phase the plan is to develop a hydrogen supply chain to produce and to deliver 20,000 tonnes of renewable hydrogen a year, including the production of green hydrogen, with the use to which the green hydrogen is to be put, already understood, with all use within the region. This approach to development of supply and demand is both innovative and is likely to be transformative, and reflects the approach that is being taken in Japan (see Edition 10 of Low Carbon Pulse).
In addition to the production of green hydrogen, a hydrogen biogas plant is to be developed to derive hydrogen from municipal solid waste.
See: basque-hydrogen-corridor-unveiled-a-e1-3billion-hydrogen-project
BESS and BECCS news round-up:
Edition 5 of Low Carbon Pulse reported on the Victorian Big Battery (VBB), a 300 MW / 450 MWh battery electrical storage system (BESS) to be developed near Geelong, in Victoria, Australia by French renewable energy company, Neoen. On February 24, 2021 it was announced that Neoen had secured AU $160 million of debt financing from the Clean Energy Finance Corporation (CEFC) for the VBB.The BESS technology will be provided by Tesla.
See: Neoen lands $160 million in CEFC finance for Australia’s biggest battery
On February 4, 2021 Schlumberger New Energy announced a BECCS (bio-energy and carbon capture and sequestration) project with Chevron and Microsoft. The BECCS project (a world first), will convert agricultural waste biomass into syn gas, the syn gas will be mixed with oxygen to generate electrical energy, with the GHG arising captured and stored permanently in geological formations (cavern capture). The process is described as giving rise to a net-negative carbon emission outcome, with 300,000 tonnes of GHG captured and stored;
See: Schlumberger New Energy, Chevron, and Microsoft Collaborate on Carbon Negative Bioenergy
European Partnership proposal delivered:
On February 23, 2021 the European Commission delivered a proposal to establish 10 new European Partnerships and to invest close to €10 billion in digital and green transition, where "the goal is to speed up the transition towards a green, climate neutral and digital Europe, and to make European industry more resilient and competitive".
One of the 10 new European Partnerships is the Clean Hydrogen Partnership (CPH), the objective of which is to accelerate the development of a clean hydrogen value chain for Europe using clean technologies. Critically, the focus of the CPH will be the development of supply for clean hydrogen to the difficult-to-decarbonise industries and the transport sector.
The CPH, together with the existing Hydrogen Alliance, will be key to the EU's objectives manifest in the Green Deal and the EU Hydrogen Strategy for a climate-neutral Europe. The proposal from the EU will be considered in more detail in Part 2 of the second article in The Shift to Hydrogen (S2H2): Elemental Change series A Guide to Hydrogen Road Maps, Plans and Strategies.
See: EU proposal to set up a clean hydrogen partnership
In addition to the CPH, the other proposed new partnerships are: Global Health, Innovative Health Initiative, Key Digital Technologies, Circular Bio-based Europe, Clean Aviation, Europe's Rail, Single European Sky ATM Research, Smart Networks and Metrology.
Nine of the 10 proposed new European Partnerships will be considered by the European Parliament before they are presented to the Council of Ministers for consideration and adoption. (The tenth proposed new European Partnership, relating to uniform Metrology (measurements and standards), will be considered by the European Parliament's economic and social committee, before being considered by the Parliament and the Council of Ministers.)
Greening of the shipping and trading industries:
In related EU news, it has been reported that a number of European shipping and trading companies have written to the EU to promote the use of green hydrogen and green ammonia on the basis that they are sustainable. It is reported that the letter articulates what may be regarded as an inconvenient truth: sourcing energy carriers from other carbon intensive sources (including fuel crops), does not provide a sustainable solution, emitting more GHG than the fossil fuels they displace. "Green hydrogen and ammonia offer a clean future for the shipping and fuels industry. The EU must give them the investment certainty they need to flourish by requiring all ships carrying European trade progressively to make the switch". The writers of the letter estimate that making the switch to green hydrogen and green ammonia will require €1.4 trn on the basis of data from the Global Maritime Forum.
See: European shipping players call on EU to promote green hydrogen and ammonia as marine fuel
Hungary and Poland to transition to nuclear:
Hungary is phasing out the use of coal-fired power plants, with the last plant to be shuttered in 2025, and continuing to develop its nuclear capacity so as to be clean energy reliant by 2030. Poland is planning to develop its first nuclear power plant in Gdansk and its second on the site of the current Belchatow coal-fired plant.
See: Hungary and Poland plan nuclear to replace coal
Technology and innovation:
It is often said that there needs to be innovation and technological development to achieve progress towards net-zero GHG emissions. Two of the worlds' leading businesses in their respective fields, Accenture and Microsoft (through a joint venture, Avenade) intend to work together to advise energy, power and utility companies how to decarbonise their value chains, and how to lower the cost of that decarbonisation.
This consulting and execution business, responds to the UK policy setting requiring achievement of net-zero GHG emissions by 2050.
Blue Hydrogen round-up:
Edition 5 of Low Carbon Pulse reported on the Victorian Big Battery (VBB), a 300 MW / 450 MWh battery electrical storage system (BESS) to be developed near Geelong, in Victoria, Australia by French renewable energy company, Neoen. On February 24, 2021 it was announced that Neoen had secured AU $160 million of debt financing from the Clean Energy Finance Corporation (CEFC) for the VBB.The BESS technology will be provided by Tesla.
- On February 25, 2021 it was announced that Itochu (a leading Japanese trading house) and Air Liquide (recognised as one of the leading industrial gas producers) are going to develop a blue hydrogen facility in central Japan. The feedstock for the production of hydrogen will be natural gas derived from liquified natural gas (LNG), with the CO2 emissions arising on production to be captured and stored, and used by industrial customers.
On full development, the blue hydrogen facility will produce up to 3 mmtpa of hydrogen, which is currently contemplated to provide an energy carrier for fuel-cell electric vehicles.
The development of the facility is consistent with the Basic Hydrogen Strategy for Japan (including being agnostic as to the colour of hydrogen), in the move to becoming a hydrogen based economy. Further, the project indicates that a key underlying assumption of many commentators that Japan will source hydrogen as an import will require some adjustment.
From Q3 2020, it has become increasingly clear that CO2 is being viewed as an opportunity for business involving producing CO2 that can be captured as part of the production of hydrogen, cement or iron and steel. CO2 is used in the production of building materials, carbon additives (including graphene), chemicals, fuels, polymers and proteins. The largest potential market is considered to be in the building industry. This market may be expected to grow as governments develop legal and regulatory frameworks that recognise and accommodate the development of hydrogen production, delivery and use, and that of the by-products of its production. The third article in The Shift to Hydrogen (S2H2): Elemental Change series A Guide to Hydrogen Road Maps, Plans and Strategies will consider these matters in detail.
See: Itochu and France's Air Liquide to build giant hydrogen plant
- Equinor and Gassco are reported to be considering the development, jointly, of a blue hydrogen export pipeline from Norway to Europe. The pipeline being contemplated would deliver blue hydrogen having an electrical energy potential of between 50 and 100 TWhs (noting that the total electrical energy use in The Netherland in 2012 was 114 TWh). The blue hydrogen would be sourced from a plant to be developed, possibly near to the Northern Lights project.
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Northern Lights project The Northern Lights Project is part of a full-scale CCS project. The full-scale project involves the capture and liquefaction of CO2 in the Oslo region (from both cement production and from waste-to-energy), and will be shipped to an on-shore terminal from where it will be transported through a pipeline for storage permanently. The full-scale project is being funded as to USD 1.8 billion of its US$ 2.7 billion development cost by the Norwegian Government, the Government's policy is to achieve a complete and scaled value chain in Norway by 2024 (the Longship Project). As reported in Edition 2 of Low Carbon Pulse, the balance of the funding for the Northern Lights project will be provided by Equinor, Shell and TOTAL. |
Green Ammonia and Green Hydrogen round-up:
World leading infrastructure firm, Copenhagen Infrastructure Partners (CIP) is planning to develop what will be the largest green ammonia production plant in Europe, to be located at Esbjerg, Denmark. The plant (dubbed the Power-to-X facility) will use renewable electrical energy sources from off-shore wind fields to produce green hydrogen from a 1 GW electrolyser which will then be combined with nitrogen to produce green ammonia. The green ammonia is intended to be marketed to the agricultural sector as a fertiliser (nitrogen carrier) and the shipping industry as fuel (hydrogen carrier). On the basis that the Esbjerg Power-to-X facility displaces ammonia sourced from fossil fuels (or other carbon intensive fuels), it will reduce GHG emissions by around 1.5 mmtpa.
(Edition 6 of Low Carbon Pulse explains the concept of Power-to-X.)
See: Europe's Largest: CIP to Launch Offshore Wind-powered Ammonia Plant in Denmark
On February 2021, Plug Power Inc. (covered in previous Editions of Low Carbon Pulse) announced the development of a 120 MW PEM electrolyser using renewable energy from hydro-electric sources. The PEM electrolyser is to be located at New York's Science, Technology and Advanced Manufacturing Park (STAMP), and will produce 500 tonnes per day of green hydrogen by 2025, moving to 1,000 tonnes per day by 2028. This is the largest PEM electrolyser to be announced in the US, and demonstrates the role that Plug Power is playing in PEM promotion.
US Senate House Leader, Mr Charles (Chuck) Schumer has called for the Department of Energy to support Plug Power's plan to develop a network of green hydrogen production facilities across the US.
See: Plug Power To Build North America’s Largest Green Hydrogen Production Facility In Western New York
Senator Schumber Wants Federal Doe to Help Build a New National Green Hydrogen Fuel Supply Chain
On March 5, 2021 it was announced that Haldor Topsoes is to develop a solid-oxide electrolyser (SOEC) (in contrast to a PEM). It has been stated that: "With Topsoe's SOEC … more than 90% of the renewable electricity that enters the electrolyser is preserved in the green hydrogen it produces. This is significantly more efficient than the other available technologies in the market".
If the advanced publicity is matched in practice, this level of efficiency of electrolyser (EoE) is likely a game changer: at current levels of EoE it takes 55 kWh of electrical energy to produce 1 kg of green hydrogen having energy content of 33.3 kWh. An EoE of 90% means that it will take 37 kWh of electrical energy to produce 1 kg of hydrogen. If the other essentials remain the same, critically, utilisation of the electrolyser, this will allow increased roll-out of electrolysers. By a rough and ready estimate, this looks like up to a 20% cut in the operating costs of electrolysers to produce green hydrogen.
See: World's first large-scale SOE electrolyser factory could cut cost of green hydrogen by 20%
In Edition 10 of Low Carbon Pulse it was noted that Province Resources was considering the development of a green hydrogen project. On March 4, 2021 it was reported that Province Resources is proceeding with the development of the renewable electrical energy parts of this project, including the planned installation of 1 GW of solar and wind capacity
See: Australian mining company moves ahead with 1 GW green hydrogen project
Green Steel news round-up:
H2 Green Steel (H2GS): On February 24, 2021 it was announced that a "green steel" venture is to be undertaken in Boden-Lulea, Sweden which on development will be the world's largest producer of green steel; on full development the H2 Green Steel project produce 5 mmtpa of green steel. The development cost of the H2 Green Steel projects is estimated as USD 3.05 billion.
The proposed thyssenkrupp upgrade to its existing Duisburg steel works by undertaking the HydrOxy Hub Walsum project (reported upon in Edition 5 of Low Carbon Pulse), continues to be reported upon. On February 26, 2021 it was reported that the HydrOxy Hub Walsum project is seeking recognition as an Important Project of European Common Interest (IPCEI) for the purposes of obtaining funding. The current contemplated scale of electrolysis plant to produce green hydrogen is 500 MW.
It is reported that H2GS is the flagship project of the European Green Hydrogen Acceleration Center (EGHAC).
See: Gigascale green hydrogen plant planned for northern Sweden
The key locational feature of the HydrOxy Hub Walsum project (and other actual and proposed green steel projects) is that it is located at the point of use of hydrogen (and oxygen). Another key reported feature of the project is that the renewable electrical energy required for electrolysis will be supplied, at least in part, from the consolidation of electrical energy from roof-top solar. This may be regarded as a first, and reflects the increased development and use, and the continued development of roof-top solar in Germany. Given the location of the Duisburg plant, this will realise efficiency because it will reduce line-loss.
See: German steel giant wants to set up 500 MW green hydrogen plant
Off-shore wind continues to build:
On February 25, 2021 marine surveys were reported to have started off the coast of Binh Thuan province (Vietnam) paving the way for the development of the Enterprize Energy's the Thang Long 3.4 GW off-shore wind project. The Thang Long project received a formal grant of a site survey licence and direction to proceed with formal survey works and to submit a development plan in 2019. (Enterprize Energy selected its EPCI contractor in July 2020, responsible for the design, fabrication, transportation of the wind-turbine and substation foundations, as well as off-shore transformer station and subsea cables.)
See: APEM Surveying Wildlife at Vietnam’s 3.4GW Offshore Wind Project
On February 24, 2021 it was announced that four memoranda of understanding were signed by the La Gan Wind Power Development Corporation and suppliers. The La Gan project is being developed by CIP, Asia Petroleum Energy, and Novasia Energy. The project is intended to be developed in phases, initially with the installation of between 500 to 600 MW through the end of 2024, with the balance of 3,000 MW to be installed between 2026 and 2030.
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Vietnam It is understood that Vietnam currently has around 54 GW of installed electrical energy, and that the Government intends for that capacity to be increased to 130 GW by 2030. The Thang Long and Le Gan off-shore wind projects are both located off Binh Thuan province, an area of good wind resources. The development of off-shore wind capacity is likely to be a key part of that increase - preliminary estimates indicate up to 160 GW of off-shore wind capacity, given the long coast line, water depths that are within the range of current technologies and engineering, and good wind resources (and a lesser typhoon risk when compared to other parts of South East and North Asia). |
Decarbonising the Aviation industry:
Low Carbon Pulse editions and The Shift to Hydrogen (S2H2): Elemental Change series, highlight that "hard to decarbonise" industries must be at the core of progress towards net-zero GHG emissions. Transport is no exception (estimated to be responsible for between 16.2% and 16.5% of direct GHG emissions globally).
It is recognised that decarbonising energy use in the Aviation industry is likely to be at the more or at the most difficult end of the spectrum. This does not mean that the Aviation industry is ignoring the achievement of net-zero GHG emissions, rather it is considering how best to achieve net-zero, including the use of lower carbon additives and possibly lower carbon sourced fuels. The Aviation industry is estimated to be responsible for up 2% of GHG emissions globally (although this fell in 2020 as a result of the significant reduction in air travel).
On February 26, 2021 it was reported that the CEO of major US airlines met with key Biden Administration climate change advisers, with the subject matter of the meeting being the use of green fuels to power and to propel aircraft. This followed meetings with the electrical energy and automobile industries.
See: Exclusive: US airline CEOs to meet with White House on cutting carbon footprint
On the same day, a report form Thrust Carbon outlined how the airline industry might use carbon-offsets to achieve net-zero GHG emissions.
At the core of How to Decarbonize the Aviation industry, closely followed by the ever-present follow up question, and Who Should Pay? Is it passengers (through increased fairs), shareholders (through increased costs and lower dividends) or tax payers (through government subsidies)? To many observers, the How to Decarbonize should be unbundled from the follow-up question, with the answer to that question most naturally being that the user-should pay ultimately, both as to amount and over time.
One of the 10 new European Partnerships proposed by the EU relates to hydrogen and pursuing the "next generation of low carbon aircraft".
On February 26, 2021 Shell announced plans to develop its Rhineland refinery to produce new biofuels from bio-power-to-liquid plant and upgrading the hydrogen electrolysis plant at the site, from 10 MW to 100 MW, using the technologies of ITM Power and Linde. These developments are part of the planned transformation of the site into the Shell Energy and Chemicals Park Rhineland.
Net-zero round up:
Aviva (a leading insurer and asset manager) is targeting achieving net-zero GHG emissions by 2040 across its investment portfolio. Aviva is reported to have written to the 30 companies in its investment portfolio with higher GHG emissions, seeking them to commit to GHG emissions targets aligned to the Paris Agreement within the next 12 to 36 months.
Aviva has set intermediate targets in GHG emission reductions across its investment portfolio, 25% by 2025, and 60% by 2030. Aviva is committed to achieving net-zero GHG across its own operations by 2030, and investing GBP 6 billion in green assets and investments by 2025.
See: Aviva sets target for net zero carbon footprint by 2040
On March 3, 2021 FedEx announced its intention to become carbon neutral by 2040. FedEx has pledged USD 2 billion to commence the electrification of its fleet of more than 180,000 delivery vehicles. As reported in Edition 9 of Low Carbon Pulse, the global carbon budget does not have room in it for the prospective doubling of road freight traffic in the next 20 years. As such the move from FedEx is most welcome. It is hoped that this becomes a trend in freight businesses globally.
See: "More Than 50 Companies Have Vowed To Be Carbon-Neutral By 2040"
Author: Michael Harrison, Partner.
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