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This Supermajor Is Diving Into The Green Hydrogen Game

Hydrogen is often hailed as a silver bullet solution to emissions-free fuel since it burns clean, leaving nothing but water vapor, but the reality of using and producing green hydrogen is much more complicated. Hydrogen is already used as a power source in a lot of modern industries, including ammonia production, in refineries and as a feedstock for chemicals. The vast majority of the hydrogen in use, however, is not green hydrogen, but instead is what is known as “gray hydrogen.” While the hydrogen itself burns clean, the means of producing that hydrogen is actually fossil-fuels intensive (most often using coal or natural gas) and therefore does nothing in the way of decarbonizing the industries in which it is used. 

While gray hydrogen is currently the industry standard, however, green hydrogen is already in production as well--albeit at a much higher cost. But, as Oilprice reported earlier this month, all that is about to change. The green hydrogen revolution is upon us. While system costs of green hydrogen are standing in the way of scaling up production today, that won’t last long, according to Recharge News. “Everybody is predicting that the cost curve will come down, just as it has with solar and wind power,” they report. “Though, to get the price point right, you have to reach economies of scale. Then it’s just a matter of when, and industry is primed to take the next step.”

And now, less than a month after that report, oil supermajor Royal Dutch Shell has announced a new large-scale project to create green hydrogen using offshore wind farms in the Dutch North Sea instead of the traditional fossil fuels. The project is being developed by a consortium along with Gasunie and Groningen Seaports. Industry news site Offshore Wind reports that, “the NortH2 project partners aim to generate around 3GW to 4 GW of wind energy for the production of hydrogen before 2030, and possibly raise the capacity to 10GW by 2040.”

The project is still in its infancy, and will officially get kickstarted later this year with a feasibility study. If all goes well, the consortium reports that we can expect the first green hydrogen production as soon as 2027. “This depends, among other things, on permits from governments, the assignment of new wind farm locations in the North Sea, the available locations for the hydrogen facility/facilities and the final investment decisions of the parties concerned,” reported Offshore Wind. “NortH2’s partners anticipate that the initial project phases may potentially require European and national subsidies available for the decarbonisation of energy.” Related: Shale Decline Inevitable As Oil Prices Crash

The project underway in the North Dutch Sea is just one part of a greater sea change in the European Union toward a less greenhouse gas intensive energy future, and especially the production of green hydrogen. The Netherlands in particular has been working steadily toward ramping up the production of green hydrogen, and in the Eemshaven seaport (and potentially offshore if projects like Royal Dutch Shell’s NortH2 go well) green hydrogen production is projected to reach approximately 800,000 tonnes annually by 2040. 

In the meantime, NortH2 is looking for more partners to join the consortium and continue to push the initiative forward. “This project offers opportunities throughout the entire hydrogen chain,” Marjan van Loon, President-Director of Shell Nederland, was quoted by Offshore Wind. ”In addition, it fits well with our New Energies aspirations and our ambitions to find new ways to reduce CO2 emissions and deliver more and cleaner energy, at home, on the go and at work. In order to realise this project, we will need several new partners. Together we will have to pioneer and innovate to bring together all the available knowledge and skills that are required. The energy transition calls for guts, boldness, and action.”

If there was any doubt that the initial steps of the green hydrogen revolution were already underway, the involvement of a supermajor oil corporation like Royal Dutch Shell should silence them. With peak oil and catastrophic climate change looming just over the horizon, big oil tycoons are looking to diversify, and an increasing amount of that money is going to green hydrogen for our future. 

By Haley Zaremba for Oilprice.com

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