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Hydrogen central to decarbonising oil & gas industry

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Despite the recent oil market shock, a fifth of industry leaders said in a DNV GL survey their companies have…

More than half of the respondents expect hydrogen, mostly produced via electrolysis from excess renewables energy, to become a key part of the power generation mix and a sustainable tool for energy storage.

“The challenge now is not in the ambition, but in changing the timeline: from hydrogen on the horizon, to hydrogen in our homes, businesses, and transport systems,” commented Liv Hovem, CEO at DNV GL – Oil & Gas.

Industry ready to invest

The proportion of forward-looking industry leaders, ready to invest in hydrogen, has doubled from 20% to 42% this year. However, projects are still on a small scale and rather for demonstration purposes, so the industry’s shift to hydrogen is unlikely to help reduce carbon emissions.

Asia-Pacific, the Middle East and Europe are regions where industry is actively supporting the shift to a hydrogen economy. The race is on for developing novel electrolysing technologies, notably in Japan, Germany and the U.S.

Demonstration projects

DNV GL is involved in several projects to test and implement hydrogen, notably:

  • The Hy4Heat programme in the UK, which aims to establish whether it is technically possible, safe, and convenient to replace methane with hydrogen in residential and commercial areas. Tests on three specially constructed houses look at a switch from natural gas to hydrogen at DNV GL’s Spadeadam Testing and Research site.
  • A project run by Dutch TSO Stedin is demonstrating that zero-carbon hydrogen could help to decarbonize heating in a residential apartment block near Rotterdam, the Netherlands
  • In Norway, Gassnova initiated a full-scale demonstration project whereby DNV GL qualified carbon capture technology developed by Aker Solutions, for use at Norcem’s cement plant in Brevik.
  • Globally, DNV GL is keen to support governments with technical and market analysis to provide a knowledge base for decisions regarding national hydrogen strategies and supporting policy measures.

Blue vs. green hydrogen

Much ado has been made about blue vs. green hydrogen. Though hydrogen produces from renewables is the ultimate aim, needs to be acknowledged that the sector can only realistically scale up to large volumes and infrastructure with carbon-free hydrogen produced from fossil fuels combined with CCS technology (blue hydrogen).

DNV GL’s predicts that natural gas will become the world’s largest energy source in the mid-2020s, accounting for nearly 30% of the global energy supply in 2050. “Natural gas and hydrogen can play similar roles within the global energy system, and the synergies between them – in application and infrastructure – will drive the hydrogen economy,” analysts said.

Embracing green fuels

Though hydrogen is not yet cost-competitive as a fuel, more and more oil and gas companies are adapting their processes to a less carbon-intensive energy mix. Over the past two years, the number of companies actively involved in hydrogen has risen from 44% to currently over 60%.

To realize the full potential of both green and blue hydrogen (produced via carbon capture storage (CCS), policy makers have to set the right incentives to make large-scale projects forthcoming.

The German industry, for example, said to become carbon-neutral it would need to invest of around 45 billion Euros in new infrastructure and processes. In addition, it would need more than 600 TWh of electricity per year from the mid-2030s – more than Germany's entire current power production – mainly to produce hydrogen and other renewable fuels.


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