Ukraine can be a prospective partner for the European Union to reach its ambitious hydrogen goals. Indeed, Ukraine has the potential to build up to 10 gigawatts (GW) of electrolyser capacity by 2030. It is also a chance for Ukraine to ensure energy independence and security and accelerate its integration with the EU.
The company Hydrogen Ukraine (H2U) plans to build a renewable hydrogen plant in the Odessa region, in the city of Reni, a strategic position, not only because of the enormous wind and solar potential but also from a logistic point of view, due to a very-well developed transport infrastructure.
CEENERGYNEWS spoke with Iaroslav Kryl, CEO of Hydrogen Ukraine to discuss the challenges posed by the Russian aggression earlier in February and the advantages of building a hydrogen plant in this part of the country.
The location chosen for the hydrogen plant is a strategic one. On one hand, it has around 320 sunny days per year with average solar radiation of 1,600 kilowatts per square metre (kW/m2). Additionally, the wind potential ranges from 1.5 to 4 GW. On the other hand, it can also count on significant water resources with an average annual water flow of the Danube river of 6,400 cubic metres per second. Finally, the developed transport infrastructure of Reni’s port makes it possible to transport the produced hydrogen to 10 countries in the Danube region.
“We completed the feasibility study at the end of last year and we calculated the price of hydrogen with different combinations of hydrogen produced by renewable sources combined,” Mr Kryl explains, evaluating the current status of the project. “According to our calculations, we have concluded that we can produce hydrogen at the lowest prices, around 5 euros per kilogram.”
This is indeed an attractive number, in a world like a hydrogen one in which everybody pays attention to the financial aspect.
“Companies are aiming at producing hydrogen for 2-3 euros per kilogram,” he mentions, posing them a question: how can they maintain these prices?
“To produce electricity from solar, for example, in Ukraine it costs 0.02 euros per kilowatt-hour. This already adds to the final cost. And what about personnel, water resources and transportation?,” asks Mr Kryl.
“Indeed, it is not a big deal to produce hydrogen, the main challenge is posed by transportation.”
“So far we are only taking into account transportation as compressed hydrogen or liquid hydrogen on the Danube river,” he continues. “To use the pipeline infrastructure we would need around 1 GW of electrolyser capacity and the first phase of our project will only reach 100 megawatts (MW).”
Together with a 100-MW electrolyser capacity, the first stage of the project will also build 80 MW of wind power and 120 MW of solar. Thus, the hydrogen production capacity will be around 7,000 tons per year. By 2030, the goal is to increase the electrolyser capacity up to 3 GW.
“A part of the electricity produced by the renewable energy sources installed at the location will be used to produce green hydrogen and the rest will be sold on the market, not under the green tariff but the general one, thus reducing the price of hydrogen to 4.5 euros per kilogram,” Mr Kryl underlines.
The main consumers will be petrochemical and metallurgical enterprises that aim to completely decarbonise their operations. Then, the target will be the transport sector and finally the national power system to balance its supply.
According to some feasibility studies conducted together with German companies, Iaroslav Kryl explains that for now only Liquid organic hydrogen carriers (LOHC) have been taken into consideration while there have only been talks about ammonia.
“Earlier in March we had begun with the wind energy production, starting measuring sites to build wind power plants,” he says. “But due to the Russian invasion, works were postponed and they have just resumed a couple of weeks ago.”
Not only Ukraine but also neighbouring countries, as the strategic position of the plant in Reni shows.
“We still do not have a formal cooperation with Romania and Moldova,” he says. “But the location is everything. We are 700 metres from the EU border and Russia is far away, which gives a bit of reassurance also to potential foreign investors. And to those fearing the lack of water resources, the geological studies that we conducted indicate the presence of underground water.”
And this is another advantage. Countries like Italy and Spain, other than building solar and wind parks, have also to take into account a desalination plant that will add one euro to the overall cost of hydrogen.
Apart from the war, the CEO of Hydrogen Ukraine mentions also the difficulty to get an off-take agreement and financing hydrogen production. There was some interest in participating in H2Global, however, rules for applications haven’t been published yet, which sort of slowed down the process for the company.
“However, under current circumstances what we need is to be ready,” Mr Kryl highlights. “Europe has to deal with high energy prices and, at the beginning of the war, the European Commission increased its ambitions regarding hydrogen production, twice than it was before.” “
So, in the nearest future I expect that in Europe and countries located near the EU, hydrogen projects will be created very fast. That’s why we have to be ready now.”
“So that when in a half year or one year the EU or Germany or any other country will decide to be ready to finance hydrogen projects, Ukraine will be the obvious choice,” Mr Kryl concludes.