Released January 09, 2023 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--As the race to replace fossil fuels continues, some experts see wind and solar facing headwinds, while government and private sector eyes are turning more to hydrogen. Those are among the findings in a report from Dutch bank ING, titled "Energy Outlook 2023: The Growth in Renewables, Batteries, CCS and Hydrogen Infrastructure."
Both "blue" and "green" hydrogen projects are growing in the U.S. and Europe. Blue hydrogen is produced from natural gas, with carbon capture and storage (CCS) equipment trapping the released CO2. Green hydrogen comes from the use of green electricity to split hydrogen from water molecules, without the need for CCS.
The report notes that most renewables benefit from high fossil fuel prices: "Increased demand by governments, businesses and households in their efforts to become less dependent on high gas and power prices from a fossil-driven energy system all help, too. The U.S. is less affected by the energy crisis, but a more volatile energy market will indeed trigger more renewable buildout. The Inflation Reduction Act (IRA) gives a huge boost to renewable project development, but the effect will likely kick in after 2023."
Wind and solar are beginning to struggle with supply-chain disruptions and rising expenses for mined supplies, like steel and rare earths. Post-COVID labor shortages also are a factor. ING sees the two sources continuing to expand, but believe the rate of growth will stagnate in 2023. Grid congestion--the need to build more power lines to transport electricity from wind and solar farms--is the "elephant in the room" pushing against further growth in many regions.
The Rise of CCS
ING sees CCS capacity increasing in both Europe and the U.S. for several reasons, one of which is abating CO2 releases by making H2 from natural gas. The report states that there were 61 new CCS projects announced worldwide from January to mid-September 2022. Between CCS operational projects and those under development, global commercial CCS capacity should grow 44% in 2023, reaching 244 million tons per annum (Mtpa).
The report expects capacity to jump significantly starting in 2025 (about 150 Mtpa), reaching about 275 Mtpa by 2030, fueled by government action such as the U.S. IRA.
Natural gas processing outside of hydrogen separation already is the main use for CCS, but CCS is expanding into cement, iron and steel, as well as blue hydrogen.
But the green energy boost derived from high fossil fuel prices does not extend to blue hydrogen, as it is obtained from that higher-priced natural gas. And one project in the Netherlands was delayed recently due to legislation controlling nitrogen emissions during the construction phase.
Green or Blue? It Depends Which Side (of the Atlantic) You're On
The report states that Europe has more green-electrolyzer projects in development than the U.S., partly because Europe is trying to wean itself off Russian gas--making green hydrogen its only recourse, according to an August 2022 S&P Global story.
The U.S., on the other hand, has plenty of natural gas coming from its shale revolution. In fact, the U.S. is battling Qatar for world leadership in exports of liquefied natural gas (LNG). That gives blue hydrogen a more significant place at the table.
In the U.S., oil and gas giants like ExxonMobil Corporation (NYSE:XOM) (Irving, Texas) are continuing to push blue hydrogen projects--partly, no doubt, because it makes use of the natural gas they're already producing. But S&P Global notes that there are also concerns about the affordability of green electricity for hydrogen production in the future: Green hydrogen facilities will be competing with the larger power grid for renewable electricity, which could drive up the price.
Hydrogen Hubs
Whatever the color, the produced hydrogen must travel from its generation location to the end user. The U.S. IRA and the Netherlands are planning hydrogen hubs to facilitate the flow of trade. Hubs would greatly expand the reach of hydrogen, which is most often produced and consumed in the same industrial location.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Both "blue" and "green" hydrogen projects are growing in the U.S. and Europe. Blue hydrogen is produced from natural gas, with carbon capture and storage (CCS) equipment trapping the released CO2. Green hydrogen comes from the use of green electricity to split hydrogen from water molecules, without the need for CCS.
The report notes that most renewables benefit from high fossil fuel prices: "Increased demand by governments, businesses and households in their efforts to become less dependent on high gas and power prices from a fossil-driven energy system all help, too. The U.S. is less affected by the energy crisis, but a more volatile energy market will indeed trigger more renewable buildout. The Inflation Reduction Act (IRA) gives a huge boost to renewable project development, but the effect will likely kick in after 2023."
Wind and solar are beginning to struggle with supply-chain disruptions and rising expenses for mined supplies, like steel and rare earths. Post-COVID labor shortages also are a factor. ING sees the two sources continuing to expand, but believe the rate of growth will stagnate in 2023. Grid congestion--the need to build more power lines to transport electricity from wind and solar farms--is the "elephant in the room" pushing against further growth in many regions.
The Rise of CCS
ING sees CCS capacity increasing in both Europe and the U.S. for several reasons, one of which is abating CO2 releases by making H2 from natural gas. The report states that there were 61 new CCS projects announced worldwide from January to mid-September 2022. Between CCS operational projects and those under development, global commercial CCS capacity should grow 44% in 2023, reaching 244 million tons per annum (Mtpa).
The report expects capacity to jump significantly starting in 2025 (about 150 Mtpa), reaching about 275 Mtpa by 2030, fueled by government action such as the U.S. IRA.
Natural gas processing outside of hydrogen separation already is the main use for CCS, but CCS is expanding into cement, iron and steel, as well as blue hydrogen.
But the green energy boost derived from high fossil fuel prices does not extend to blue hydrogen, as it is obtained from that higher-priced natural gas. And one project in the Netherlands was delayed recently due to legislation controlling nitrogen emissions during the construction phase.
Green or Blue? It Depends Which Side (of the Atlantic) You're On
The report states that Europe has more green-electrolyzer projects in development than the U.S., partly because Europe is trying to wean itself off Russian gas--making green hydrogen its only recourse, according to an August 2022 S&P Global story.
The U.S., on the other hand, has plenty of natural gas coming from its shale revolution. In fact, the U.S. is battling Qatar for world leadership in exports of liquefied natural gas (LNG). That gives blue hydrogen a more significant place at the table.
In the U.S., oil and gas giants like ExxonMobil Corporation (NYSE:XOM) (Irving, Texas) are continuing to push blue hydrogen projects--partly, no doubt, because it makes use of the natural gas they're already producing. But S&P Global notes that there are also concerns about the affordability of green electricity for hydrogen production in the future: Green hydrogen facilities will be competing with the larger power grid for renewable electricity, which could drive up the price.
Hydrogen Hubs
Whatever the color, the produced hydrogen must travel from its generation location to the end user. The U.S. IRA and the Netherlands are planning hydrogen hubs to facilitate the flow of trade. Hubs would greatly expand the reach of hydrogen, which is most often produced and consumed in the same industrial location.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
