Hydrogen’s time is now in post-pandemic world

Hydrogen’s time is now in post-pandemic world
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The new Febus hydrogen bus during its presentation in Pau, France. EU nations are using the pandemic to push forward with “green” hydrogen energy plans. (AFP)
Hydrogen’s time is now in post-pandemic world
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EU heads are beginning to pay closer attention to cleaner energy sources, like hydrogen, which advocates say is “ready” for the big time. (Reuters)
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Updated 09 May 2020

Hydrogen’s time is now in post-pandemic world

Hydrogen’s time is now in post-pandemic world
  • Alternative fuel hailed as the “holy grail” in bid to move away from oil and gas

Hydrogen has long been touted as a clean alternative to fossil fuels. Now, as major economies prepare green investments to kickstart growth, advocates spy a golden chance to drag the niche energy into the mainstream of a post-pandemic world.

Green hydrogen was pushed to the fore last week when Fatih Birol, head of the International Energy Agency, said the technology was “ready for the big time” and urged governments to channel investments into the fuel.

Some countries, including the Netherlands, Australia and Portugal, have already begun investing in the technology. Now investors, politicians and businesses are pushing the EU and others to use its post-crisis recovery plan to support hydrogen in areas like trucking and heavy industry.

The promise of hydrogen as a fuel to help power vehicles and energy plants has been a talking point since the 1970s, but it is currently too expensive for widespread use. Proponents say infrastructure investment and more demand from transport, gas grids and industry will bring the cost down.

Most hydrogen used today is extracted from natural gas in a process that produces carbon emissions, which defeats the object for many policymakers. But there is potential to extract “green” hydrogen from water with electrolysis, an energy-intensive but carbon-free process if powered by renewable electricity.

EU officials, one of whom described green hydrogen as the “holy grail,” said it could replace fossil fuels in sectors that lack alternatives to align operations with the EU’s Green Deal plan to reduce net emissions to zero by 2050.

“Hydrogen could solve a lot of problems. We need everything else as well but the political interest is because to achieve deep energy efficiency and decarbonization, hydrogen seems relatively easy,” said Jesse Scott, senior advisor at think-tank Agora Energiewende.

“It is less alarming (for policymakers) than some other elements for meeting net zero,” she added, such as carbon removal technology for example.

Momentum appears to be building; EU industry chief Thierry Breton met hydrogen companies online this week to discuss the bloc’s recovery from the pandemic.

“We could use these circumstances, where loads of public money are going to be needed into the energy system, to jump forward towards a hydrogen economy,” said Diederik Samsom, who heads the European Commission’s climate cabinet.

This could result in hydrogen use scaling up faster than was expected before the pandemic, he added.

The European Commission has earmarked clean hydrogen — a loose term which can include gas-based hydrogen, if fitted with technology to capture the resulting emissions — as a “priority area” for industry in its Green Deal.

Over the past year, several governments, including Germany, the UK, Australia and Japan, have announced they were working on hydrogen strategies, and the pace has picked up over the past month during the coronavirus pandemic.

This week, Australia set aside A$300 million ($191 million) to jumpstart hydrogen projects. Portugal plans to build a new solar-powered hydrogen plant which will produce hydrogen by electrolysis by 2023.

The Netherlands unveiled a hydrogen strategy in late March, outlining plans for 500 megawatts (MW) of green electrolyser capacity by 2025. A German hydrogen strategy is expected later this month.

The Dutch government is pushing for the EU to follow suit and present an “action plan” for clean hydrogen, a spokesperson told Reuters.

When it comes to transport, hydrogen fuel cells trail electric batteries in the push for greener cars, given their higher price and the lack of refuelling stations. But proponents see potential for heavier vehicles.

Daimler and Volvo Trucks unveiled plans last month to bring hydrogen fuelled heavy-duty vehicles to market within the decade.

Hydrogen gas is already used in industry to produce ammonia, which goes into fertilisers, and methanol, used to make plastic.

A major drawback of the green hydrogen that governments are most interested in is that it requires a large amount of renewable electricity to produce. The good news is renewables prices have fallen sharply in recent years.

According to Bernstein analysts, hydrogen made from fossil fuels currently costs between $1-$1.8 per kilogram (kg). Green hydrogen can cost around $6 per kg today, making it significantly more expensive than the fossil fuel alternatives.

However, increased demand could reduce the cost of electrolysis. Coupled with falling renewable energy costs, green hydrogen could fall to $1.7 per kg by 2050 and possibly sub-$1 per kg, making it competitive with natural gas. Higher carbon prices would also encourage the shift.

“Clean hydrogen produced from electricity is around three times more expensive than that from natural gas, but solar and wind costs have decreased in recent years and if they continue to fall, clean hydrogen produced with lower electricity costs would become more affordable,” said Philippe Vie, global energy and utilities lead at consultancy Capgemini.

“On hydrogen we are right now where we were with renewables in 2000-2005. Ten to 15 years is probably a good time lapse to become competitive,” he added.

Any serious attempt at large-scale use — either in industry or transportation — would require major infrastructure investments. For example, power from an offshore wind farm would need to be connected to an electrolyser that produces the green hydrogen, which would then need to be transported to end users.

Europe has around 135 MW of electrolyser capacity, but planned green hydrogen projects could bring that to 5.2 gigawatts, according to consultancy Wood Mackenzie. But many projects hinge on further investment partners or subsidies, which advocates fear will be scarcer in the coronavirus-induced economic slump.

“Investments that would have been foreseen to be done now are not made because production is delayed,” Jorgo Chatzimarkakis, secretary general of lobby group Hydrogen Europe, told Reuters.

To help lower costs, several projects are being worked on across the gas infrastructure, industry, mining and energy sectors.

Royal Dutch Shell and Dutch gas firm Gasunie unveiled plans in February to build a mammoth wind-powered hydrogen plant in the northern Netherlands, capable of producing 800,000 tonnes of hydrogen by 2040.

In Germany, oil refinery Raffinerie Heide is embarking on a project using excess wind energy and abundant water supply in the region to produce hydrogen to make kerosene.

"The price of hydrogen we pay for now is four times natural gas from an external source fed through the pipeline and produced 30 km away," said CEO Juergen Wollschlaeger.

A big fear for companies in the hydrogen industry is that they will be unable to take advantage of the unique opportunity presented by vast economic stimulus packages, and that governments will favour supporting traditional high-carbon fuel sectors that have been hit hard by a collapse in energy demand.

"For us, that will be the question to be answered in the next weeks. Will the carbon fuel industry succeed in convincing the officials to support them?" Bernd Hübner, chief financial officer at German green hydrogen start-up Hy2gen said. 


LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
Updated 31 min 37 sec ago

LNG shipments from Qatar to UAE to resume, signaling improving ties

LNG shipments from Qatar to UAE to resume, signaling improving ties
  • Qatar has also resumed monthly exports of condensate to the UAE

DUBAI: A liquefied natural gas (LNG) tanker that loaded cargo from Qatar is signaling the UAE as its destination, the first such shipment since mid-2017, reflecting improving ties between the countries.
LNG tankers sometimes change destination, but if the shipment is completed, this would be the first time a Qatari LNG cargo has been shipped to the UAE since May 2017, ship-tracking data from Refinitiv Eikon and data intelligence firm Kpler showed.
The UAE and other countries in the region severed relations with Qatar in mid-2017 over accusations that Doha supports terrorism, a charge that it denies.
But the UAE re-opened all its land, sea and air entry points with Qatar this year after Saudi Arabia announced a breakthrough in ending a dispute between Gulf Arab states and Qatar at a summit. Before the dispute, Qatar was a regular exporter of LNG to the UAE during the summer, when demand for power generation increases. read more
The tanker, Al Ghariya, loaded a cargo from Ras Laffan on May 10 and is at anchor but is showing that it is due to discharge the cargo in Jebel Ali, in the UAE, on May 13, data showed on Wednesday.
Another LNG tanker, Al Gattara, which had loaded from Ras Laffan on May 5 had also initially signaled Jebel Ali as its destination but diverted to Asia, Kpler analyst Rebecca Chia said.
Both tankers are on long-term charter to Qatargas, she added.
Qatar has also resumed monthly exports of condensate to the UAE since February, shipping data on Refinitiv Eikon showed.
Qatari condensate exports to the UAE jumped to 1.7 million barrels in April, up from 287,000 barrels in February, the data showed.


Oil climbs on drop in US oil stockpiles, solid demand outlook

Oil climbs on drop in US oil stockpiles, solid demand outlook
Updated 57 min 39 sec ago

Oil climbs on drop in US oil stockpiles, solid demand outlook

Oil climbs on drop in US oil stockpiles, solid demand outlook
  • US crude oil stocks fell by 2.5 million barrels in the week to May 7

MELBOURNE: Oil prices rose on Wednesday, extending overnight gains, after industry data showed a drop in US crude inventories, which reinforced OPEC’s robust demand outlook, and as the shutdown of the biggest US fuel pipeline headed into a sixth day.
US West Texas Intermediate (WTI) crude futures rose 21 cents, or 0.3 percent, to $65.49 a barrel at 0013 GMT, adding to a 36 cent rise on Tuesday.
Brent crude futures climbed 15 cents, or 0.2 percent, to $68.70 a barrel, adding to a 23 cent gain on Tuesday.
“Crude oil gained as investors continue to bet on a bright outlook for demand. A weak US dollar also lent support,” ANZ Research said in a note.
Data from the American Petroleum Institute industry group showed US crude oil stocks fell by 2.5 million barrels in the week to May 7, according to two market sources.
The drop was slightly less than expected. Eight analysts polled by Reuters had estimated, on average, that crude stocks fell by 2.8 million barrels.
The drawdown came before the Colonial Pipeline was hit by a cyberattack last Friday which forced the pipeline, which transports more than 2.5 million barrels a day of fuel, to shut down. The operator said it hopes to restart a large portion of the network by the end of the week.
In the meantime, the market remained on edge, as gasoline stations from Florida to Virginia began running out of fuel on Tuesday as drivers rushed to top up their tanks and pump prices rocketed.
US unleaded gasoline prices hit an average $2.99 a gallon, the highest since November 2014, the American Automobile Association said.
Oil prices were also supported by the latest outlook from the Organization of the Petroleum Exporting Countries (OPEC), which stuck to a forecast for a strong recovery in world oil demand in 2021 with growth in China and the United States outweighing the impact of the coronavirus crisis in India.
OPEC said it expects demand to rise by 5.95 million bpd this year, unchanged from its forecast last month. However, it cut its demand outlook for the second quarter by 300,000 bpd due to soaring COVID-19 infections in India.
“India is currently facing severe COVID-19-related challenges and will therefore face a negative impact on its recovery in the second quarter, but it is expected to continue improving its momentum again in the second half of 2021,” OPEC said in its monthly report.


American business group warns China boycotts spooking investors

American business group warns China boycotts spooking investors
Updated 12 May 2021

American business group warns China boycotts spooking investors

American business group warns China boycotts spooking investors
  • Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts

BEIJING: An American business group warned Tuesday that government-instigated consumer boycotts of foreign shoe, clothing and other brands in China are making companies less willing to invest.

That is adding to anxiety over Beijing’s plan for a list of “unreliable entities” that might be punished for actions deemed to run counter to Chinese interests, the American Chamber of Commerce in China said in an annual report on business conditions.

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

Brands including Swedish retailer H&M, Adidas and Nike have been targeted by demands online for consumer boycotts. That came after state media criticized them for expressing concern about reports of possible forced labor by ethnic minorities in the Xinjiang region of China’s northwest.

FASTFACT

The report reflects growing unease among American and other foreign companies about the impact of economic and strategic tensions between Beijing and their home countries.

The American Chamber said 78 percent of companies that responded to its survey cited “rising tensions” between Beijing and Washington as their top concern.

Beijing announced plans for its “unreliable entities” list in 2019 after then-President Donald Trump blocked access to US components and technology for Chinese tech giant Huawei Technologies Ltd. Officials have yet to say which companies might be on the list or disclose the criteria for being included.

Concern about the list is “aggravated by consumer boycotts instigated by official organizations and through Chinese media,” the Chamber said. It said one in five companies expressed concern, while 7 percent said it was decreasing their willingness to invest.

Despite that, half the companies surveyed said China’s investment environment is improving, while 38 percent said it stayed the same. The Chamber said only 12 percent reported conditions had deteriorated, the lowest level since 2015.

The Chamber noted that 27 percent of information and computer technology companies said investment conditions were deteriorating, the highest level of any industry. That finding comes at a time when the ruling Communist Party is using subsidies, market barriers and informal pressure on companies to try to develop its own high-tech industries.

 


Rising consumer appetite for digital payments in Saudi Arabia

Rising consumer appetite for digital payments in Saudi Arabia
Updated 12 May 2021

Rising consumer appetite for digital payments in Saudi Arabia

Rising consumer appetite for digital payments in Saudi Arabia
  • The survey found that 94 percent of respondents are comfortable with digital payment systems such as biometrics, digital wallets and QR codes

RIYADH: Statistics released this week have highlighted the massive surge in the uptake of digital payments in the Kingdom, especially in light of pandemic restrictions on shopping and travel.

According to monthly data issued by the Saudi Central Bank, there were 25.84 million online sales transactions through the Mada system in March. The total value of sales during the month was SR 5.31 billion ($1.4 billion), a year-on-year increase of 196 percent.

The Small and Medium Enterprises General Authority (Monshaat) also reported that the e-commerce sector received an investment of around SR 250 million during the first quarter of 2021, according to an article by the Al-Eqtisadiah newspaper.

With shoppers having few alternatives when it comes to getting basic necessities, it is no surprise that the first-ever Mastercard New Payments Index for the Kingdom found widespread acceptance of digital payments among Saudi consumers.

The survey found that 94 percent of respondents are comfortable with digital payment systems such as biometrics, digital wallets and QR codes.

A year into the pandemic, research from Mastercard showed that the adoption of new payment technologies is rising and consumer appetite for it growing fast.

According to the index, 68 percent of respondents tried a new payment method they would not have tried under normal circumstances.

In addition, 92 percent of Saudi consumers said they have access to more ways to pay compared to this time last year.

Three-quarters of respondents said digital payment methods help them save money, while the same amount also said they are more loyal to retailers who offer multiple payment options. Sixty-nine percent of Saudi consumers said using biometrics to verify purchases made them feel safer.

“More than ever, consumers in Saudi Arabia are adapting and embracing payment innovations. Businesses, both big and small, must respond to this evolving trend. We are closely working with our partners and retailers to deliver secure and diverse payment technologies for the omnichannel generation,” J.K Khalil, country manager, Saudi Arabia, Bahrain and the Levant at Mastercard, said in a press statement.


Latest reforms will boost KSA real estate, says analyst

Latest reforms will boost KSA real estate, says analyst
Updated 12 May 2021

Latest reforms will boost KSA real estate, says analyst

Latest reforms will boost KSA real estate, says analyst
  • The support for the housing sector will help the government achieve one of its core Vision 2030 goals to reach 70 percent homeownership by the end of the decade

RIYADH: The Saudi government’s recent announcements in the real estate sector, including providing more than 53,000 new homes in Riyadh and relaxing the ban on ownership by non-Saudis in Makkah and Madinah, will help to overhaul the sector and reach the Kingdom’s Vision 2030 home ownerships goals, according to an industry figure.

“The announcement of the allocation of 20 million square meters of land in the northern Riyadh suburb of Al-Jawan, effectively trebling the size of this neighborhood, to housing developments will certainly aid the government’s home ownership targets,” Faisal Durrani, head of Middle East research at real estate consultancy firm Knight Frank, told Arab News.

He added that the announcement by Crown Prince Mohammed bin Salman “follows the December announcement by Roshn to develop 30,000 residential units in Riyadh — 4,000 in the first phase — as part of a national program to deliver 1 million new homes by 2030.”

The move is also in line with the city’s aim to become one of the 10 largest economic cities in the world and to increase its population from 15 to 20 million by 2030.

The support for the housing sector will also help the government achieve one of its core Vision 2030 goals to reach 70 percent homeownership by the end of the decade, up from 47 percent four years ago and around 60 percent at present.

The decision late last week to allow companies listed on the Saudi Stock Exchange to own properties in Makkah and Madinah was also seen as a major move by the government to encourage foreign investment and to permit non-Saudi investor ownership in the prime markets.

“Opening ownership in Makkah and Madinah to international companies is a clear indication of the direction of travel of the Saudi economy and is perfectly aligned with Vision 2030,” Durrani said, adding: “The landmark change is likely to pave the way for a boost in demand for commercial real estate over the medium to long-term, as businesses are drawn to the emerging economic opportunities.”

Such moves by the government are likely to be a catalyst for a post-pandemic rebound in the Kingdom’s real estate sector, which are already up 25 percent year-on-year (Y-o-Y) in Riyadh during the first quarter of this year, and 34 percent Y-o-Y in Jeddah and 11 percent Y-o-Y in the Dammam Metropolitan Area.