Energy Expert Looks into Chubais’ Plan to Conquer EU Hydrogen Market
Anatoly Chubais, Special Representative of the President of the Russian Federation for Relations with International Organisations to Achieve Sustainable Development Goals, made a statement about hydrogen. According to him, Russia's chances to hit the EU-wide market for the lightest chemical element are unprecedentedly high. Could it be the case, though? Besides, are we talking about something worth fighting for, or is this 'booming hydrogen market' thing more of an illusion?
It's not the first time the ex-head of Rusnano has spoken about the "fantastic opportunities" that will open up before us "if things unfold correctly", meaning we will establish the hydrogen industry. For example, at the St. Petersburg economic forum, he linked Russia's preservation of its status as an energy power to the construction of facilities aimed at exporting H2 to Europe because hydrocarbons, in his opinion, will soon be much less in demand.
"Exports are the vulnerable area through which Russia will inevitably be affected by the global energy transition. Its implications for Russian exports will be enormous. My estimate, not confirmed by anyone, is that we are talking about 10% of GDP. It is quite a lot", Chubais elaborated during the recent seminar "Mechanisms of State Carbon Regulation: Possible Consequences for Domestic Economy".
It looks like Anatoly Borisovich has his eyes set on the very distant future, as the current environment suggests the opposite. Thus one thousand cubic meters of methane on the TTF (The Netherlands marketplace) costs already over 500 US dollars. There is an apparent shortage of supply and unprecedented, especially for the warm season, demand. It is difficult to predict what will happen to the prices in five or six months if the coming winter in Europe is as cold as the previous one, and Nord Stream 2 will not start working by that time.
However, back to number one on the Mendeleev table, which Chubais believes is our future. The main thing in this whole story is that it is not about any innovative technology. The hydrogen-powered car drove around Leningrad eighty years ago, and Soviet scientists created an aeroplane in the 1980s. Still, these and other projects have never got far than prototype models or become mass-produced. The reasons are prosaic - the energy efficiency of H2 is about 3.5 times lower than that of natural gas, and, on the contrary, its cost is much higher.
It means that you will have to pay several times more for each kilometre driven by your car. In addition, driving safety will be reduced because the hydrogen molecule is so tiny that it can penetrate the crystal lattice of steel and gradually destroy it. The consequence of a depressurised fuel tank and the interaction of its contents with oxygen would be an explosion. Therefore H2 delivery via the current pipeline system also seems to be unrealistic.
"Long-distance transportation of hydrogen or methane-hydrogen mixtures through the operating GTS from Russia to the EU is counterproductive compared to transportation of the grid gas," says Andrey Konoplyanik, member of RAS Scientific Council for System Research in Energy. "This will result in disastrous consequences for the country due to the need of deep technical modernisation of GTS - both linear part and compressor equipment, violation of technical integrity, contractual problems. To spoil a barrel of honey, a spoonful of tar is enough, as you know. Such upgrades require a different metal, different equipment. It is a different order of magnitude of costs. In practice, it means building a parallel "hydrogen" GTS - similar to the "hydrogen pipeline system" that Europe intends to build to deliver the resource from North Africa and Ukraine".
In the scientist's opinion, the primary beneficiary of such projects will not be Russia or any other exporting countries, but European engineering companies that specialise in the production of electrolysers, pipes and compressors. They need a large market to cut their costs per unit, i.e., customers outside the EU. It is the aim of involving EU neighbouring countries in the production of green hydrogen.
"Europe's costs are a matter for Europe itself and its decision for its specific European circumstances. It is the lack of non-renewable energy resources of its own, apart from coal and declining hydrocarbon production in the North Sea. This is a state-funded dependency on RES, the system unreliability of which - weather dependency of the production - has to be compensated with the same state-funded, systematically unreliable solution for the production of green H2," says Andrei Konoplyanyk.
As an alternative, he suggests creating plants in Europe, where the demand for hydrogen is higher, to produce it from the Russian methane. It would not require catastrophic investments in new infrastructure and would not affect the technical integrity of the existing pipelines. Otherwise, this mega-project would be "contrary to Russia's national interests".
However, there is another option for a mutually beneficial partnership in the field of hydrogen energy. It would be the construction of processing plants for the synthesis of methanol, ammonia, cyclohexane or other substances from natural gas on the territory of our country, near the Northern Sea Route. Transporting these "semi-finished products" by tanker to the EU enables to convert them into hydrogen and other valuable components.
It is worth noting that about 85 mln tons of hydrogen are consumed in the world annually. But demand for it is provided not by energetics and not by transport, but by oil-refining and chemical industry. The prospect of creating an H2 market similar to oil or gas is one of the most debated issues. After all, in addition to the need to minimise the technogenic impact on nature, the economic side of the issue must also be kept in mind, alongside elementary physical laws that make it doubtful that hydrogen can obtain the status of a global energy resource.