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World Hydrogen Summit – thousands of delegates, a global outlook, and Europe’s largest port

Summary

Discover the key takeaways from the World Hydrogen Summit 2023, including project scalability, partnerships for de-risking, project bankability, carbon intensity-based standards, socio-economic benefits, and the role of ports in the global hydrogen market.

With over 11,000 delegates registered for the event, the Sustainable Energy Council’s World Hydrogen Summit tripled its participation in 2023. It is no longer a question whether hydrogen will be part of the decarbonisation journey, but rather how quickly it can take its place in the clean energy transition. Key topics dominating the week included establishing market rules, global cooperation agreements, and mobilising funding for the early mover projects.

The event rose to the challenge of providing a global platform for clean hydrogen, with representatives from all continents joining the discussion and illustrating the rapid pace of change across the globe. It was encouraging to see the African delegations which took a lead on the first day of the conference, showcasing the continent is ready to contribute to the global decarbonisation challenge while seeking an opportunity to develop its own economy.

The exhibition floor was truly buzzing, with new project unveilings and partnerships forged – a hydrogen truck even made an appearance on the floor! The summit was lined with insightful speakers, with a high-level strategic focus on developing a global hydrogen market. Unfortunately, there were limited learnings from existing projects which highlights the slippage on final investment decision felt in 2022.

To wrap up the event, we had the pleasure of enjoying a (somewhat) sunny boat trip to the Port of Rotterdam to visit where ~1GW of green hydrogen projects will be developed over the next decade. The visit was impressive and showed the scale of what can become the European door to global imports of clean hydrogen and derivates.

Key topics discussed at SEC’s 2023 World Hydrogen event in Rotterdam.
Key topics discussed at SEC’s 2023 World Hydrogen event in Rotterdam.

After some deliberation, we have collated our main takeaways from a week packed of hydrogen insights, including an “H2-map” with the hot topics and our wish list for next year’s event!

 

1. Delivering projects: You need to build things to learn, and you need to learn to scale up.

To date, operational green hydrogen projects have been mostly under 10MW, but a shift towards commissioning systems greater than 10MW is expected this year. A common theme for these projects is modularity, both in the actual design of plants and in their approach to building up the hydrogen market. Initial learnings are filtering through from pioneer projects and being fed into larger production sites, and modularity enables this gradual build-up.

Some of the bigger players are beginning to reach a tipping point in 2023. Air Liquide and Siemens Energy’s joint venture PEM electrolyser factory in Berlin will have a manufacturing capacity of 1GW by the end of this year. A hallmark of this giga-development is innovation, with these companies increasing the automation of their factories, standardising production processes, and reducing costs.

An ongoing concern from the industry is the need for speed in getting projects going, and manufacturers are catering to this need. For example, Plug Power is prioritizing speed by manufacturing as close to end customer as possible with standard product offerings to accelerate deployment. Others are promoting a “one stop shop” type service, or a “complete hydrogen offering” to simplify project execution which is proving popular with project developers.

 

2. Partnerships: if you want to go fast go alone, if you want to go far go together.

The event was an important opportunity for the hydrogen sector to connect and collaborate so it was encouraging to see such a comprehensive range of companies from across the value chain present – in a morning you could meet a handful of people and cover all of a hydrogen project’s needs. This indicates strongly that the hydrogen ecosystem is growing and maturing, and there was a sense of moving together rather than in isolation. H2Korea’s chairman, summed this up perfectly: If you want to go fast go alone, if you want to go far go together.  

Partnerships are key for de-risking and scaling up projects. With all the issues experienced across global supply chains over the last 12 months, strong relationships with multiple suppliers are vital to avoid bottlenecks and maintain momentum. In the long-term, as the market consolidates, we expect the supply chain will become more integrated to reduce lead times and overall production costs.

 

3. Bankability of projects: the key to move from PowerPoint to practice.

Reaching final investment decision is a struggle many developers have faced over the last months, and this underpinned many of the conversations during the event. Project bankability was repeatedly highlighted as the single largest factor to get the final go-ahead.

Phasing of projects not only allows for technical learnings but enables investors and banks to get comfortable with hydrogen projects at a small scale, reducing risk and liability if the project fails. Engaging with investors and lenders from the onset of the project provides higher visibility and shared learnings which can help secure funds. For developing countries, a mixture of project finance and development funding was strongly encouraged to absorb a higher investment risk commercial banks are currently not willing to take.

Project de-risking is vital towards making projects bankable and securing a lower cost of capital. Key to this is the quality and quantity of the offtakers will provide certainty to developers and investors, with multiple stable offtakers being the preferred lower risk option. The technology maturity and country political stability will also have an impact on the cost of capital accessible by developers.

Ultimately, the first large offtakers will be industrial sites where grey hydrogen is displaced, so the most bankable projects are those which, on top of de-risking the investment, are able narrow the cost gap with the incumbent fuel.

 

4. Standards: a carbon intensity-based approach towards is called for.

Many countries are currently working on standards for low carbon hydrogen systems. However, a global standard, despite being desirable, seems far away from reality. On the plus side all parties agree that a common measurement methodology must be applied and mutual recognition among standards will be crucial to unlock global trade.

In a related development, a new trend has emerged to replace the “colours of hydrogen” with a carbon intensity-based assessment criterion. This would support the development of blue hydrogen plants, which have previously received varying levels of support across Europe. Certification systems will be essential to provide certainty to offtakers on the provenance of hydrogen, especially once imports enter local markets.

Regarding permitting and regulation, speed and simplicity were once again at the top of the wish list from developers. The initial shock wave the IRA sent across global hydrogen markets has now attenuated, but its simplicity is still quoted as a reference for European policy makers, instead of striving for perfection. Streamlining the permitting process and ensuring the market is not overregulated from the onset will help accelerate project deployment.

Safety was another hot topic flagged, with the Hindenburg disaster still present in the public eye, any safety incidents related to hydrogen could set back progress. Multiple leak detection technology systems were displayed on the exhibition floor to address these concerns. Getting safety standards in place is imperative not only to protect operators, but the survival of the whole industry.

 

5. A transformational opportunity to unlock socio-economic benefits.

Beyond providing a clean energy source, hydrogen offers a development and industrialisation opportunity for emerging markets. The Africa Forum on day one highlighted the potential for GDP growth, with Namibia’s hydrogen vision seeing up to 60% of the national workforce employed in this transition. African representatives shared their vision of the hydrogen market, calling for a seat at the table in the international research community. Local production of hydrogen will also pose an opportunity to industrialise local markets and offer new transport options, such as hydrogen-based railway systems. However, in the mid-term we believe exports to industrialised regions will be the main route to market.

Social benefits have been added to the contractual obligations of initial project developments in Namibia, with non-pricing factors also making their way into public funding criteria of more advanced markets such as the UK. Hydrogen has the potential to create an enormous socio-economic benefit and support a just energy transition.

On the other side of the coin, developers are calling on the global skills shortage to develop these projects, which other than being a growth opportunity could become a bottleneck to the market if unaddressed.

 

6. The port potential: infrastructure and trade corridors to unlock a global market.

With the conference located in Rotterdam, Europe’s largest port and gateway to the world, it was never in doubt that the role of ports in hydrogen market development would be a strong theme throughout the event. Ports are indeed key hydrogen hubs, bringing industry giants and localised offtakers together. Beyond this local cluster benefit, ports bring an important connection to the wider world.

Although multiple import options are being developed, ammonia took the spotlight as the main hydrogen carrier of the future as it is versatile, cost-effective and has infrastructure already in place. Nevertheless, liquid hydrogen supply chains and ammonia cracking technologies are still to develop.

It was fascinating to see the collaboration happening between global ports, from Texas to Australia. The Port of Pecém in Brazil highlighted its huge hydropower potential to produce ammonia and supply to Europe through the Port of Rotterdam. The Port of Rotterdam is a trailblazer with several projects at ~200MW coming online between 2025 – 2027, and we expect the port will house ~1GW capacity by the end of the decade. Despite not having construction progress to display just yet, the Port of Rotterdam site visit opened our eyes to the sheer scale of the port, the massive amount of offshore wind power to tap into, and the potential for existing industrial assets and sites to be converted to accommodate hydrogen and its derivatives.

 

Our 2024 World Hydrogen Summit wish list

Looking ahead, we expect many projects to break ground in 2023 and that conversations can advance to focus on concrete learnings rather than limited to plans and projections. Investment, both public and private, should reach a critical mass securing final investment on larger scale projects to be actioned by the end of the decade.

Hydrogen as a pillar of the global energy system has come on significantly over the last year and we expect to see a continued growth of global talent across the hydrogen industry. With this growth and prominence in the energy systems and economies of the world we feel it is crucial that global hydrogen leaders and voices reflect the diversity of people impacted by the climate crisis. Hydrogen and the wider energy transition will benefit enormously by bringing together those from the developed and developing economies, and a broader range of thought leaders and voices – there are so many challenges to solve that we need to be open to different ways of thinking to truly unlock hydrogen’s potential now and in the future. This will make for more inclusive conversations and a more representative understanding of where the hydrogen market is now, and where it is headed.

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