“IT TAKES A VILLAGE TO RAISE A CHILD” – REFLECTIONS ON THE WORLD HYDROGEN SUMMIT 2023 By Vincent Dwyer
The rain in Rotterdam last week couldn’t dampen the enthusiasm of some 11 000 people (3x more than last year) looking to scale-up and accelerate the global hydrogen industry, hoping to rear it into adulthood by 2030. And everyone there seemed to have a part to play.
With global decarbonisation now front and centre of so many debates, the policy and industrial supply-chain is now readying itself for scaled production and use of hydrogen (blue and, far preferably, green) and its derivative products.
First there were the Governments, leading or cajoled, into establishing important policy settings, starting to frame social benefits, making bold announcements (such as our own Australian Government pledging a further A$2 billion on a “kick-start” basis – or perhaps best characterised as a “catch-up” basis given other initiatives internationally), touting their own locations and “matchmaking” where at all possible. Each of the Australian States and Austrade were well represented, with the SA Premier even immersing himself in the event.
The supply-chain is also gearing up. With the large electrolyser and downstream process manufacturers now consciously focussed on raising capital, expanding capacity, modularising design and production, and working through their own technology development and supply-chain, the focus is expanding to broader innovations. The innovative elements of the supply chain are now exploring what can be done to accelerate the take-up of hydrogen, from hydrogen-based bromine flow batteries to hydrogen storage. It was a pleasure meeting leading players like ThyssenKrupp, Siemens, Bechtel, Vopak and Koole who are at the forefront of this.
Consistent with Energy Estate’s own strategy around key ports in Australia (Newcastle, Gladstone, Abbot Point and Kembla), the Austrade-led tour of the Port of Rotterdam evidenced a foundation group of partners, namely the Ports, with their tank-farm tenants, who will play a pivotal role in initiating these new global commodity markets. Sitting with them, as importantly, are the new “common user” or “backbone” infrastructure developers, the dedicated hydrogen pipelines now being developed in Europe and elsewhere (including our own Hunter Hydrogen Network) and the significantly augmented grid (such as Queensland’s SuperGrid), each playing a key role to unlock and then moving the energy “from panel to port”.
Of course, renewable energy costs, and recent inflation and supply challenges in the sector, did not go uncommented on. Challenges in the wind sector (in particular with historic loss making businesses) need to work their way through into capex or power price input costs. That may take a little time. Grid augmentation is also a key time and input cost driver (unless you can manage “behind the meter” solutions), with the range of “associated infrastructure” (desalination/water costs, ship loading and even port development) remaining a key time and cost risk. The typical issues around sharing of infrastructure remains to be played out, pitting Governments and certain developers against others looking to maintain control over their “project on project” risk.
Finally, debt and equity (though not there in any substantive way) are emerging, as they think through risk and “bankability”. Not only are there the endless “what is your offtake strategy” questions, but capital is assessing risk in a more informed way. There will, for some time, remain a role for Government (and DFIs/ECAs) in that process but maturity is emerging.
We are now starting to “normalise” a hydrogen future and the interest and appetite, as demonstrated by the participation at the WHS, is enormous. Desire for the change to a genuine hydrogen economy is very real, customers are tentatively reaching out for product and talented people from across the spectrum are collaborating. The “village” is beginning to act.