Jigar Shah, Director, Loan Programs Office at the US Department of Energy, said the ecosystem “has to play the game” after President Biden committed the US to decarbonising its electricity sector by 2035 and economy by 2050.
“I don’t see a single refinery signing a long-term offtake,” he said. “No one is suggesting the refineries are going to go out of business next week – you’re talking about a hybrid system we’re going to be living in for a very long time – but when you ask where the offtakes are coming from, it’s European utility companies out of the Port of Corpus Christi.
“The notion that we’re going to build an entire industry here, and all of these big players are going ‘this is great, I’m so glad I’m here but I am not going to sign an offtake agreement’ – that’s why it’s going slow. We’ll see if they get there.”
Shah’s comments generated a spontaneous round of applause.
He also called out investors and industry managers too to be more thorough with their megaproject proposals. While the expanded role of hydrogen in decarbonising offers huge potential, he said managers need to understand how financiers and regulators think.
“There are certain applications that are obvious – such as seasonal storage, or cleaning up refineries, but we get people who say ‘we’ll have the entire hydrogen hub based on turning all Class A vehicles turned to hydrogen’. I’m not against that, but to suggest that should be the anchor for a $10bn hub makes no sense,” he said.
“Part of what I’m hoping comes out of this event, and others like it, is a growing recognition that there needs to be anchors that are comfortable with the molecule, who want to do something with hydrogen for the next 30 years, and they’re not concerned about the volatility of natural gas.”
Supply chain issues everywhere are “swimming against us” and net zero targets mean time is not on our side, said Sarah Ladislaw, Managing Director of US Program at the Rocky Mountain Institute. “For me the crux of the issue is we’re trying to learn faster,” she said.
Nicole Faucher, CEO/CIO and Founder of Beam Capital, said we can’t reinvent the future energy market using yesterday’s financial model.
“The current market is really set up, in terms of venture capital and hedge funds, for much shorter time frames – and we need long term strategic capital to really move the needle on the clean hydrogen economy. This is still very early, and very risky, but the way you de-risk is by owning and controlling the technology in the private equity fund and simultaneously building up the infrastructure fund.
“We don’t have a sustainable ESG bucket yet. We have a lot of work to do. Hopefully with the Inflation Reduction Act (IRA) and Hydrogen Hubs, that will make a difference but Wall Street is not there, and they need to partner with corporate strategics. We also need to focus on the green bond market more.”
But she acknowledged that the industry has come a long way since 2008 when the first powertrain study was announced in Shell’s offices in London. “The technology is really punching above its weight, and public policy is too – but we, in the industrial community, are not.”
The Mobility panel covered a wide range of topics. Parker Meeks, President and Interim CEO at Hyzon Motors, said its 350 bar tanks provide 350 mile range, and that will improve with further technological efficiencies. “Our vision is to flip over to liquid,” he said. “That is the long term and lowest cost solution that Hyzon believes in.”
Brady Ericson, President Fuel Systems and Aftermarket at BorgWarner, said we are going to need a liquefied and gas fuel along with electric, and “we can’t rely on one or the other”. “Hydrogen has such infrastructure in place, and flexibility, that in some use cases may not be optimal for fuel cells or a battery pack.”
The day’s conference programme started with a keynote speech from HE Stuart Richard Young, Minister of Energy and Energy Industries at the Government of Trinidad and Tobago. He explained how it is transitioning its industry from LNG, ammonia and methanol into renewable energy, such as solar and wind power, as it finds itself increasingly at the nexus of climate change with extremes of rainfall, hurricanes and dry seasons.
Hon. Bruce Ralston, Minister of Energy, Mines and Low-Carbon Industries at the Government of British Columbia, outlined how the state is keen to position itself as the ‘Silicon Valley’ of fuel cell technology. He warned the Canadian Government that the Inflation Reduction Act had raised the bar on hydrogen and now it was a case of “keeping up with the Bidens”.