Ákos Hegedüs will be one of the speakers of the Budapest Hydrogen Summit, to be held on 10 March 2022.
Globally around more than 20 countries are pursuing hydrogen strategies to find solutions for decarbonisation goals. Everyone knows that green or better to state clean hydrogen produced with zero emissions can help lower CO2 emission in heavy industry, transportation and power generation.
While policymakers are focusing on regulations and pilot projects set up with intensive governmental or EU support, not many decision-makers are putting significant effort into operational costs, challenges and safety which we at Linde Group believe are critical for any future success.
At Linde, one of our core products has been hydrogen for more than 100 years. We are operating more than 150 hydrogen production units in which we produce and distribute grey hydrogen with steam methane reformer technology for mainly chemical and petrochemical industries. In Hungary, we are operating 3 large scale HyCO plants that produce 50,000 cubic metres/hour, or 4,202 kilograms/hour of hydrogen. Globally, the Linde Group is one of the key technology and value chain providers who could cover the full chain of grey, blue and green hydrogen production, liquefaction, storage, distribution and utilisation.
Due to the local hydrogen strategies, the Fit for 55 package and the EU 2030 goals on emission opens up a significant amount of discussions and brainstorming, so the ‘genie is out of the bottle’. Every single company would like to be in the new hydrogen economy that has at least a loose link to hydrogen.
Dozens of inquiries arrive week by week, hundreds of companies are seeking a technology provider partner. However, from my point of view, in Hungary besides three existing offtake partner (chemical industry, petrochemical industry and ammonia production) only ideas are existing which depends on further decisions and additional investments in mobility, steel industry, power generation and so on.
Everyone talks about investment in clean hydrogen production and future possible offtake options, but no one really talks about the availability and price of renewable or low carbon energy, storage and distribution solutions, safety factor and not last the possible cost increase of the ‘end product’ by substituting grey hydrogen or natural gas.
Of course, capital expenditure is a key question in return on investment, however, if there are just some assumptions on the utilisation of the produced low carbon hydrogen, investments can not be planned based on real values. On the other hand, based on our global experience we could conclude that for operating a clean hydrogen production unit the most critical factor is the price of the energy. Without having a power price of less than 25 euros/megawatt-hours (MWh) the end product will not be competitive on a large scale. Calculated at the current electricity and natural gas prices green hydrogen is approximately six times more expensive than grey hydrogen.
Besides all the above, there is another critical element that could bring even more discussions on corporate and governmental levels and this is the so-called integrated business models. Currently, every company wants to have the biggest share of the potential hydrogen economy. However global solutions show that without integrating the production/supply chain part and the potential off-takers it is almost impossible to set up any investment with acceptable investment return rates. In Western Europe already corporate decision-makers realise that the consortium approach is the way forward to share know-how, risk and benefits as well.
Changing regulations, support on investments, competitive power price, integrated supply structure and integrated off-takers are the critical success factors for the new clean hydrogen economy but we need to highlight that educational systems must be upgraded as well to have engineering know-how, experience in operating these solutions in a safe and cost-effective environment.