China could have a crucial role to play in the development of a global hydrogen economy, with its massive demand for decarbonization technologies likely to drive large-scale deployments that will help cut costs around the world, according to oil major Shell.
Shell signed off its first commercial hydrogen project in China last week, as it continues to build out its hydrogen business on several fronts.
The first China project will see hydrogen refueling stations established in the city of Zhangjiakou City, which will host part of the 2022 Beijing Winter Olympics. The city is rolling out 1,000 hydrogen trucks and buses to support the logistical effort of hosting the games. The new joint venture between Shell China and the authorities in Zhangjiakou City will build a 20-megawatt electrolyzer as well the refueling stations.
Oliver Bishop, general manager for hydrogen at Shell, told GTM that China will clearly be an important market as hydrogen continues its emergence as a key pillar of decarbonization strategies.
“We know that the government has announced growth targets of 100,000 fuel cell vehicles by 2025 and 1 million vehicles by 2030,” he said.
So how much weight should be put on these lofty ambitions? Bishop said history suggests people should pay attention. He pointed to the breakneck scaling and cost reduction of solar power, which had everything to do with the pace at which China incentivized both supply and domestic demand. The country installed 130 GWs of solar PV in between 2010 and 2017.
This isn’t hydrogen’s first moment in the sun. The last time online searches for hydrogen or fuel cells were this intense was back in 2004, according to Google Trends.
Nor is this Shell’s first foray into hydrogen. President George W. Bush toured the first-ever Hydrogen fueling station in the U.S., built by Shell, back in 2005.
The realities for hydrogen are very different than back in 2005, however. Today, Bishop leads a team of around 90 people in the partnering, execution and operation of its hydrogen businesses.
Everything is different for hydrogen this time around
Bishop has worked at Shell for more than 20 years, and focused on hydrogen for the last eight. His first involvement was shutting down hydrogen equipment from “a previous hype cycle.”
“[It is] different this time because of the societal interest in tackling climate change,” he said. “That’s number one, coupled with the falling cost of renewables and electrolyzers.”
“Combine all of that with a desire for cleaner cities, lower emissions, reduced air pollution [and] job creation, energy security and you can see why many governments are favorable for this.”
Aside from the plentiful benefits, there is also a pragmatic acceptance that electrification alone is not going to get countries close enough to their net-zero targets.
“Electrons alone can’t fully decarbonize the energy system. You actually need a molecule,” he said, pointing to fertilizer production as an example.
The formation of the Hydrogen Council, an industry body formed in 2017, also demonstrates the breadth of support. Members range from the obvious (Shell, BP, Total) to would-be electrolyzer giants (Siemens, thyssenkrupp, Nel) to mainstream gas distribution firms like Italy’s Snam and SoCalGas in the U.S., not to mention investors like Abu Dhabi’s Mubadala and France’s BNP Paribas.
Scaling-up in the ‘decade of hydrogen’
Shell’s own involvement is also scaling across multiple fronts. From those first pathfinder hydrogen refueling stations, Shell now has 48 completed globally and 14 in construction. In September it won $40 million in grant funding to build 48 hydrogen fueling points in California. Bishop expects Germany to grow to 100 stations in the next few months. Because of the range of hydrogen vehicles, that’s a denser network than it might sound.
The H2 Mobility network, a consortium that includes Shell, Total and Daimler, expects those 100 refueling points to support 6 million vehicles in Germany without major detours. H2 Mobility claims demand on its network has grown from two to 12 metric tons in just over three years.
Away from vehicle transport, Shell and Dutch utility Eneco won the Hollandse Kust Noord offshore wind tender. The 759 MW project will also include battery storage while Shell hopes some of the power can be used to run a 200-MW electrolyzer at one of its refineries.
The company is also at the heart of plans to develop a hydrogen hub in the Port of Rotterdam. The NortH2 consortium could see 3-4 GW of offshore wind capacity in the North Sea utilized primarily for green hydrogen. A 10-MW proton-exchange membrane (PEM) electrolyzer is under construction at its Rheinland refinery in Germany.
In August, Wood Mackenzie declared the 2020s the decade of hydrogen. Despite the unprecedented disruption brought about COVID-19, the first year of the decade of hydrogen has been a busy one. In addition to Shell’s industrial and transportation projects, German utility RWE has accrued no fewer than 30 projects, while offshore wind developer Ørsted has made progress with green hydrogen projects in Germany, U.K., Netherlands and its native Denmark.
The European Green Deal has seeded momentum among member states as well as at the EU-level. U.K.’s expedited phase-out of new petrol and diesel vehicles to 2030, rumored but not confirmed when Bishop spoke with GTM, all point to thing to come.
“It gives you an indication of tremendous momentum,” said Bishop.
Source: Greentech Media
