Let’s face it, 2021 was a terrible year.
With the late surge in Covid infections threatening to lead to more restrictions, a larger number of extreme weather events and not a huge amount of progress being made at COP26 plus the huge increase in consumer energy prices coupled with a general economic contraction due to Brexit then 2021 is certainly one of those years we’d all rather forget.
Problem is we can’t because for those of us in the energy sector the hangover of 2021 is still hammering away at us in the shape of considerably higher gas and electricity prices, the real threat of shortages particularly of gas due to an overreliance on potentially politically hostile sources and the COP26 inspired argument over whether or not we should continue to explore for and develop oil and gas resources.
Add to this the fact that for Scotland – where COP26 took place – it was a complete damp squib. I kept hoping throughout the event that there would some announcements related to enlarging the renewables manufacturing supply chain but there was nothing. All we got was the draft Hydrogen Action Plan which from a supply chain point of view might as well not have been written. In fact, it was so anaemic I’ve only bothered to read it once. I keep hoping for at least a hint of an industrial strategy but it’s never forthcoming.
Meanwhile Scotland’s peers are making good progress in developing their renewables technology supply chains. For example, Norway now has two hydrogen electrolyser manufacturers and a fuel cell company – Teco 2030 – is building a factory in beautiful Narvik in northern Norway for the large-scale production of fuel cells optimised for marine applications. Norway is also well on its way to building a hydrogen powered fishing vessel.
In addition, it’s in the process of setting up a dedicated hydrogen and ammonia research and development centre which will receive funding of around £3m per annum over the next eight years.
Norway is also a genuine global leader in hydrogen storage technologies with one of its companies – Hexagon Composites – being a major producer of 700 bar hydrogen tanks for automotive applications.
Then of course there’s all the work our Norwegian chums are doing on carbon capture and storage and the use of carbon to produce new products. They already have one company in Bergen producing carbon nanofibres using CO2 as a feedstock.
Denmark is also now an important manufacturer of hydrogen electrolysers and has at least two companies involved in this activity. One will be supplying a system to Scotland for a project to decarbonise distillery heat. Danish technology to make Scottish whisky net-zero! Mind you, an American company is providing a closed loop hydrogen boiler for a similar project with another distillery. How proud does that make you when we can’t even underpin decarbonisation in our most iconic of industries?
The Danes also have a company building a factory to produce fuel cells so, like Norway they cover most aspects of the burgeoning global hydrogen market. There should be no surprise about the level of these investments given that a recent study by Global Market Insights Inc. valued the global hydrogen market at more than £87 billion and thinks that can be expected to more than treble by 2030. Other studies have produced not dissimilar figures and the new German government’s decision in November to more than double its hydrogen production capacity target to 10GW by 2030 provides more clues as to which way this market is heading. But, if you consider that according to the analysts Aurora Energy Research, the world currently only has about 200MW of electrolysers currently installed globally this is one massive ask without a dramatic increase in electrolyser manufacturing capacity.
England also has its hydrogen heroes with two electrolyser builders a scattering of fuel cell companies and an intriguing company in Hull that may make CCUS redundant by producing hydrogen and carbon black from hydrocarbons using “thermal plasma electrolysis”.
Scotland though is a leader in tidal turbines but so far at least it is an industry on a considerably smaller scale than wind. Typically, the UK Govt demonstrated its support for that industry by giving it less than a third of what it asked for in project funding.
Finland is showing its strength in maritime engineering by developing hydrogen fuelled drive trains with Wartsila being the driving force behind projects aimed at achieving the International Maritime Organization target of achieving a 70% reduction in carbon intensity by 2050. Powercell in Sweden have also received agreement from DNV to install fuel cells in DNV classified vessels which implies they will be chasing that market as well.
This is an industry that Scotland should be putting a huge amount of effort into but simply isn’t. All the projects being mooted now will rely on imported technologies. The only piece of progress has been that a small company in Peterhead has developed a hydrogen flowmeter. This is simply not acceptable if we are to achieve a genuine so called “Just Transition”.
Dick Winchester is a member of the Scottish Government’s oil and gas
and energy transition strategic leadership group.