Discover more from Learning by Proxy with Vivek Srinivasan
Hydrogen - Yes again...
India is moving ahead at breakneck pace towards Hydrogen Power
This is going to be long.
Substack sucks at making my posts available for Google to index. Hence Learning by Proxy.
First a throwback
Last year I had written a blog titled Let me tell you what inflation is. I had made the case…
According to the popular narrative, the oil supply has been hit due to the war in Ukraine. Consequentially the cost of oil has gone up and since oil powers the entire logistics system across the world, everything has become more expensive. It takes oil to transport coal to the power plant. The maintenance guy who takes care of the solar panels most likely travels in a car powered by oil. Your food that comes from many miles away was transported to you in a vehicle using oil. And the list goes on.
This oil is produced by what can only be termed as daylight robbery of the planet. The oil companies did no work to make the oil, it was just sitting there to be taken. They got the licence and bore a hole.
Just like if you created a borewell in your backyard and pumped out water it is not like you created water, you are just taking what was already there. Nature put it there.
If you told me that pumping out the water was getting more expensive (gyrating by 500%) I would wonder how?
If I told you pumping out water from my well is more expensive because someone else has stopped pumping out water, this would be clearly absurd.
But when it comes to oil, we assume this to be an inalienable truth.
And like that Exxon was left with the unbearable burden of booking $20 Billion in quarterly profits.
And as predicted…
Oil majors Exxon Mobil, Chevron, BP, Shell and TotalEnergies are slated to report a combined profit of $190 billion for 2022 when their final quarterly results are released in the coming days, according to estimates from analysts collated by Refinitiv.
Flush with cash, the energy giants are expected to use their windfall profits to reward shareholders with higher dividends and share buybacks.
ExxonMobil raked in $55.7 billion in annual profits, shattering a 2008 record of $45 billion and setting a new goalpost for American and European fossil fuel companies.
Shell’s profits hit a record high of $42.3 billion in 2022—double what it made in 2021, and perhaps the highest profits posted by any British company in history. How Shell spent those profits left little doubt about its priorities: $26 billion went toward dividends and buybacks for its shareholders, an amount 7.4 times more than the $3.5 billion it spent on renewables.
Such god-honest companies are left to carry such an unbearable burden of profit by the markets. Bad Markets. The companies never intended to raise prices.
The days of those profits are numbered.
The last time when I mentioned Hydrogen, I was accused of offering Hydrogen as a prescription. I am merely engaging in prognostication and not offering a prescription. Given capitalism and how demand and supply are moving, I expect this will happen.
It was Winston Churchill who as the admiral of the British Navy determined to modernise the entire English Navy and transition to oil instead of coal, after the First World War. This move set off a cascade of events that would lead, not only to the evisceration of the Ottoman Empire but also to the naked pursuit of oil in all of the Middle East.
India did not exist as a nation at this time. All those nations had been neatly carved out by the British by the time India achieved independence. India itself does not have a lot of oil. As a result, India has been constantly required to import and run Current Account Deficits on the budget. This has also hurt our currency.
The Indian government wants to make sure that this does not repeat.
India plans to manufacture five million tonnes of green hydrogen per annum by 2030, the power ministry said on Thursday, aiming to meet its climate targets and become a production and export hub for the fuel.
Green hydrogen, produced using renewable energy, has some of the best environmental credentials among cleaner-burning fuels. The zero-carbon fuel is made using renewable power from wind or solar sources to split water into hydrogen and oxygen.
India is going to be throwing a lot of money at this project. Almost $2.5 Billion to begin with. If a country of 1.4 Billion people moves toward a fuel source can that set off a rush in other quarters? Can the tail wag the dog?
The government announced an outlay of Rs 19,700 crore for the recently launched National Green Hydrogen Mission, which it said will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country "assume technology and market leadership in this sunrise sector".
Source: Economic Times
Also, India has determined that if building capacity alone does not do it; it is going to force the industry to use Hydrogen!
To gradually build a hydrogen-powered shipping lines, India has set a goal for its largest fleet operator, the state-run Shipping Corp of India (SCI.NS), to retrofit at least two ships to run on green hydrogen-based fuels by 2027.
All the state-run oil and gas companies that charter 40 vessels for fuel transport will also have to hire at least one ship powered by green hydrogen each year from 2027 to 2030.
India aims to end imports of ammonia-based fertiliser by 2034 to 2035, replacing them with locally produced green ammonia-based soil nutrients.
The government will also invite bids to set up two domestic green hydrogen-based urea and diammonium phosphate plants.
Ashwini Vaishnaw, the Minister of Railways, has announced that the country would have its first hydrogen-powered passenger train by December 2023. The train will run on the Sonipat–Jind route in Haryana, which is 89 km. The announcement has created a buzz among researchers in the country.
The cost of producing that hydrogen for the passenger train will be INR 1.1 lakh. In lieu of a diesel engine, fuel cells are used to convert the chemical energy of hydrogen to electricity. So, based on current costs, the cost of operating a fuel cell–based hydrogen engine will be 27% higher than that of a diesel engine. Moreover, there will be the added cost of fuel cells and the associated (hydrogen) storage.
Source: Economic Times
With the scale and the subsidies that oil has, it is ONLY 27% cheaper?!
In the meantime, other mass modes of transport are also moving towards hydrogen.
In a record trip for low-carbon aviation, a startup company has completed a test flight of a 19-seat aircraft powered in part by hydrogen fuel cells. It’s the largest plane that ZeroAvia, a leader in developing hydrogen-electric systems for planes, has tested in the air to date.
The flight took off from Cotswold Airport in the UK and lasted about 10 minutes altogether. During the flight, the plane’s left engines were powered by a combination of hydrogen fuel cells and batteries, while the other side relied on the fossil fuel kerosene.
Source: MIT Technology Review
Obviously, it is still a long way from powering an entire transatlantic plane or even a flight within Europe but I suppose it should get there pretty soon.
Hydrogen-powered cars have been around for decades now and they have been shown to be viable. No company has dared to produce them at scale.
Japan's Honda Motor Co said it will start producing a new hydrogen fuel cell system jointly developed with General Motors Co this year and gradually step up sales this decade, in a bid to expand its hydrogen business.
Honda will target annual sales of around 2,000 units of the new system in the middle of this decade, the company said on Thursday, aiming to boost that to 60,000 units per year in 2030.
The Japanese carmaker is seeking to expand the use of its new system not only for its own fuel cell electric vehicles (FCEVs), but also commercial vehicles such as heavy trucks, as stationary power stations and in construction machinery.
GM and Honda are not small players and they are seeking to mass produce these. They must be witnessing undercurrents that make them confident enough.
Essar Oil is going to be using Hydrogen powered furnaces at its refineries in the UK.
A brand-new furnace capable of running on hydrogen has arrived at Liverpool Port. The furnace, which is part of a multimillion pound investment by Essar Oil UK (EOUK), is heading for Stanlow in Ellesmere Port and will become the first hydrogen-powered furnace of its kind in the UK. It is a vital piece of kit to support the decarbonisation of Essar Stanlow’s operations.
The furnace, which was commissioned by EOUK, earlier this year, arrived by boat on Monday (20 June) and is part of Essar’s long-standing commitment to become the UK’s first low-carbon refinery.
A UK-first, the furnace is unique in that it will run off 100% hydrogen fuel source from 2026. It will run on hydrogen produced as part of the HyNet, which is the UK’s leading decarbonisation cluster. The furnace will replace three existing furnaces, helping Essar to drastically decarbonise their operations and cut their emissions.
The War in Ukraine has made Europe think hard about Energy. They have all the piping infrastructure needed for gas transmission but no fuel!
On 27 June 2019, the energy and clean growth minister Chris Skidmore signed papers that committed the UK to reduce carbon emissions to effectively nothing by 2050. If we are to stand any chance of meeting this target, known as “net zero”, there is one enormous challenge that we will have to tackle: home heating.
Warming our homes is responsible for between a quarter and a third of the UK’s greenhouse gas emissions. That’s more than 10 times the amount of CO2 created by the aviation industry. Around 85% of homes now use gas-fired central heating, and a large proportion of gas cooking still takes place. Greening this system is a huge challenge by any measure. But if recent reports are to be believed, there could be a simple and efficient way to do it: change from using natural gas to hydrogen gas.
Together with colleagues, Sansom assessed the engineering risks and uncertainties associated with swapping our gas network to hydrogen. Their conclusion is that there is no reason why repurposing the gas network to hydrogen cannot be achieved.
Governments the world over a talking about EVs and putting EV policies in place. Renewables are being seen as the potential source of this electricity. Latin American nations are considering creating the equivalent of OPEC for Lithium. (And I am sure the CIA is working on manufacturing a coup in all those countries if that comes to pass). China is working hard to ensure the supply of Lithium for itself. Venture Capital has poured Billions into battery-powered vehicles.
Heavy Industries know for a fact that the Electric + Lithium Battery paradigm has its limitations. The industry is moving in another direction. The Indian government is pouring money into Hydrogen. They have even set up a Green Hydrogen Portal!
You know how Apple launched the iPhone and made the iPod obsolete. The government policies resemble something like that.
There is a lot of Hydrogen Production that will come online in the next 10 years. The applications are already starting to go into mass production.
The prognosis - Whether Hydrogen is good or not, it will be the most ubiquitous source of energy by 2040.