The H-Bomb. In the best sense of the word. Planning a chapter on hydrogen
BRILEV: Hello, everyone! This is our fifth consecutive conversation with people from the International Award Committee of the Global Energy Association regarding the forthcoming book of the 10 breakthrough ideas for the next 10 years. And today on the behalf of the presidency of the Global Energy Association we are talking to Dr Adnan Amin, who is of course with the International Renewable Energy Agency and member of our International Committee. And whose idea is very strange indeed. Hello, Dr Amin.
AMIN: Hello Dr Brilev! How are you?
BRILEV: Good. Yourself? I think, given the circumstances this conversation will never end, because of the coronavirus thing. Let’s put it away. We are happy here. Now the strange idea is that we are talking about hydrogen. Now this is something less exotic then floating nuclear reactors then we were talking about last time. Everybody is aware what hydrogen is, because we all are graduates from the secondary school, but isn’t hydrogen the substance which occasionally explodes?
AMIN: Well, yes. So does nuclear material, so does gasoline, so does natural gas, a lot of things have tendency to explode. I think what’s important about hydrogen is what it presents to us as an opportunity as an energy carrier, that can help us in the drive for decarbonisation, as the global conversation about climate change becomes more and more important. It’s a gas, it can be produced by electrolysis but it needs an input of energy. And what is that input of energy is to produce hydrogen becomes important from the point of view of carbon. But hydrogen has a very important role today. Which is that we have a lot of discussion about how power is being produced in a future. Renewable energy has become the cheaper source last year in terms of global capacity editions, new capacity for power. 70 % was renewable energy, that’s going to be the electricity source predominantly of the future. And that doesn’t compete with oil. Where the competition happens is because the renewables cannot reach the hard decarbonised sectors like transportation, housing, aviation, shipping, you know, processing of steel and aluminium. And that’s where hydrogen comes in, if you can produce hydrogen at low cost, at scale and use it as an energy source that can decarbonised those sectors then the climate discussion becomes very interesting. So, I think, this is the real moment of opportunity and that’s how people are looking at this now.
BRILEV: Well, I see sparks in your eyes. Certainly, I do. And a little wrinkle and you start smiling. So, let’s go back to my first question. It’s a substance which sounds very innocent, hydrogen. A gene which produces hydro. A gene, which produces water, you can’t see anything more innocent on this planet than water. But hydrogen per se does explode. How do you transport it?
AMIN: One of the perceptions that people have is a vision of the Hindenburg ship, that got fired.
AMIN: This is hydrogen. But if it had been filled with a natural gas, this would be the same thing. I think you raised a very certain issue about the future of hydrogen, which is what is the infrastructure to produce, to distribute and manage hydrogen in the future safely. Hydrogen has to be handled under pressure, it’s not like fill a gas tank, and pick hydrogen around like that, it’s a gas, that can be volatile and number of challenges are there. The first challenge is how do we produce it. And it presents huge opportunities for the growth of renewables also, because if renewable power becomes the cheapest source of power and you need electricity produce hydrogen, you need electrolyzers, which are now coming on stream, and prices of electrolysers are falling very fast. You can begin to produce hydrogen at scale, but then how do you store it? How do you transport it? I’ll tell you about a very interesting conversation I had with the CEO of the gas business in Norway a couple years ago. When he saw this meeting, and he was telling me, that Norway has done tremendously well out of its oil and gas recourses, but Norwegians feel very guilty about, because it’s contribution to climate. So, they want to do something about it. And the idea he had is that, there is a massive continental shelf under Norway, which is ideal for carbon storage if they can use their fossil resources to create what we would call “Blue hydrogen”. And sequester the carbon under the Norwegian shelf, they can use their existing gas pipelines to distribute hydrogen at scale throughout Europe. That’s a very interesting possibility, the problem is that you need a massive infrastructure investment to upgrade facilities. If you look at hydrogen as opposed to natural gas, hydrogen actually flows three or four times faster than methane through gas pipelines. The problem is that chemical composition of hydrogen begins to create the process of embrittlement, embrittlement of the pipelines. So, pipelines have a certain steel material, they can become brittle over the time and they could potentially leak. So, how do we strengthen their infrastructure?
BRILEV: You mix it with natural gas.
AMIN: That’s one solution, but that just delays the embrittlement process, really. There is a lot of discussion about using chemicals, coating the inside pipelines and creating a new kind of scenario around that. That can be a combination of natural gas or anything and hydrogen as well. So, that’s one challenge. But when you get it to the place where you need to deliver it, it has to be stored under pressure. You have to develop infrastructure for that. You need tabs, that can hold hydrogen. One of the discussions I had with the Japanese, who put a big bet on hydrogen as a transportation fuel is that you will need to fuel vehicles, you cannot create hundreds of hydrogen pumping stations, because cost of this infrastructure is huge, so how would you do it? And the idea that is emerging is that hydrogen could be a fuel for heavy transportation, shipping, for aviation potentially, for trucks. And these kinds of ships, and trucks, and planes you can program in terms of where they refuel, and how they move and so on. For that purpose, hydrogen could be very, very effective solution for the future. And my sense is, that hydrogen will grow very fast with the cost reduction that we’ve seen. And will begin to be a serious competitor with the oil in the coming decade.
BRILEV: Okay, you were born in Kenya. I was born in Cuba. You got your education in England, so did I partially, but also in Montevideo, Uruguay. So, you and I have this feeling: other than representing the tribe of global process, we have this feeling of representing the developing world. What you just said is very interesting and very promising, but you mentioned Norway. Norway is not exactly Kenya. Germany is not Cuba, etc. Now when you look at this from the perspective of the developed world, from the perspective of people, who are happy to spend more money on environmentally friendly technology that’s one thing. How do you explain this idea, how do you sell it to the developing world?
AMIN: That’s the question of economics. If you look at it from the economic perspectives we have an energy system now, that creates, you know, a form of pollution, which is an economic cost, which is externalised. It's given to others to pay, so people who don't actually use that energy are the ones, who are paying the cost of the pollution either in terms of carbon or health impacts or whatever.
BRILEV: Or deforestation at that matter.
AMIN: Or deforestation indeed. And what you do as you move to low carbon sources that do not pollute is that you reduced that cost to society. So, if you look at it from a purely cost perspective, that's a cost reduction criterion, that's quite significant. But in terms of finance, in terms of what it costs and what you pay and how that plays out, it's very clear that the technology leaders are going to be the ones that take this forward. So, as you said Europe, Germany, and the Netherlands are very much in the lead, France is right there, Japan is beginning to play a major role, the Australians are very interested in hydrogen, the potential of hydrogen, and China is beginning to enter the hydrogen discussion in a very big way. And the Chinese have a huge advantage, because they have installed huge amounts of renewable power generation capacity, which is often curtailed, which means that a lot of their solar and wind at any particular time is not being used. Hydrogen presents the possibility to use that curtailed capacity to create hydrogen, which you can store and which becomes an energy storage medium also. So, as the cost reduction happens over time, you'll see this as a potential for developing countries also. The importance of hydrogen, however, in the short term is going to be its ability to decarbonise hard, to decarbonise sectors, and to reduce carbon emissions in the global atmosphere. That's the real price right now for developing countries, right now the best option for power generation is becoming more and more renewables and given what is happening with the oil market, that hasn't changed.
BRILEV: Let me catch you there. Okay, hydrogen is renewable. Period. No, not a period, a coma. It's renewable yet, fossil fuels as coal, oil and natural gas are needed cost reduction. So, aren't we in a vicious circle here?
AMIN: Right. Up to now the overwhelming majority of hydrogen has been produced by fossil fuels. What we are seeing now, is what's so exciting and what's new about this discussion is that's what you would call “grey” hydrogen, hydrogen produced by oil, gas and so on. Coal is a big thing for hydrogen in Australia. For example, we see the advent now of “green” and “blue” hydrogen. “Blue” hydrogen is hydrogen that's generated from fossil sources, but which you have carbon sequestration attached to it so you can capture the carbon, store it underground as the Norwegians are talking about or other possibilities that becomes low-carbon blue hydrogen. “Green” hydrogen is hydrogen, that's generated by renewable sources. Now I mentioned one thing to you a little earlier, which is that 70% of new power generation capacity worldwide last year was from renewable energy. That has been a trend for the last seven or eight years in a row. In the last decade the cost of renewables has fallen, you know, solar photovoltaics by more than 80%, wind by around 40%. Today we're generating power from solar and from wind which is under 3 US dollar cents a kilowatt hour, whereas new gas, which is the next cheapest form, is producing electricity at between 12 to 16 US dollar cents a kilowatt hour. So, these new modern renewables have become the cheapest source of power. As they begin to become more predominant in system. And you need a storage capability, which is what hydrogen provides. The articulation of hydrogen and modern renewables becomes more and more a possibility. The other bottleneck has been the issue of electrolysers. Where the electrolysers, and why are they so expensive? I know, for example, talking to the CEO of a very interesting Chinese company that's in smart energy, smart wind turbines, artificial intelligence, internet of energy and so on. A company called “Envision” has started to look at the possibility of producing electrolysers in quantity at low cost, and his sense was that they could do to electrolysers, the price of electrolysers, what China had done for the price of solar photovoltaics, which is by reducing it by 80 percent. When that begins to happen the low-carbon energy transition will begin to accelerate even more.
BRILEV: Well, I'm Russian at soul. So, I'm a bit frightened by all of this, because you are seeing a huge cross on oil and gas and coal, which are produced by this country. And when you say that then new technologies, which allow to produce hydrogen without supplying new coal, oil and natural gas, you are destroying hundreds of thousands of jobs in this country by saying that. What's the way out?
AMIN: It's a very interesting thing. And, Sergey, I've got to know Russia quite well, and I must say, Russian history, Russian people, Russian culture has become very, very interesting to me. I enjoy it very much and I'm very happy to be part of this jury for the Prize.
BRILEV: Thank you.
AMIN: But I believe in the intellectual capability and innovation the Russians are capable of. I’ve bet Russians in engineering sector, in the energy industry are amongst some of the best engineers I've seen anywhere in the world. It was told to me by a British person, that he said you know, never underestimate what Russian scientists are capable of doing. The one thing they are not capable of doing is commercialising. So, he and his company had actually taken Russian innovation at very low cost, commercialised it, and made a fortune.
BRILEV: Yes, that’s pretty much the case.
AMIN: And I think that's where you need to pay attention. What I think Russia faces is the same problem, that many resource rich countries face. I lived in Abu Dhabi, I go to Saudi Arabia and I work with them a lot, they have the same problem. But if you look at the response of different countries and look at the UAE, they have embarked on a very ambitious programme of diversification.
BRILEV: United Arab Emirates. Let’s explain it, to someone, who's not familiar with the acronym.
ANIN: Yes, United Arab Emirates have embarked on a very ambitious programme of economic diversification, creating new areas of value-added investing in new areas using their oil wealth to create an economy for the future that is not totally reliant on oil. And there was a fascinating talk I attended with the Crown Prince of the UAE. This was several years ago, he doesn't talk that much in public, but this was a very privileged and very interesting discussion, where he said: “You're talking about the future of the country and of oil”. He said: “We know, that the time will come soon, when we will export the last barrel of oil, and it will not be because we don't have oil, it will be because there's no demand for the oil. And how should we feel at that time?” And he said: “We should feel happy about it because what we should do now is prepare ourselves by educating our people, creating an infrastructure for the future, investing in high-tech industries, investing in new types of manufacturing, utilising the new emerging technologies of artificial intelligence, robotics and so on, to create a new paradigm for the economy for the future”. The Saudis are trying to do the same thing, but in a very difficult environment, they have the vision 2030. The current oil shock has created a huge financial problem for the Saudis and that is a little bit shaky.
BRILEV: But they've tripled their VAT among other things, because their budget was balanced. That's, I think, 90 dollars per barrel. The Russian one was by the way balanced at 40. So, yes, the Saudis are in a difficult position.
AMIN: You know if you have a fiscal breakeven of $90 a barrel and the current price is 20 or below you have a serious problem. So, but they said they have reserves and they have ambition and then they want to go in that direction, but the Russians have something none of these countries have. They have massive natural resources, they have a huge scientific and technical capability because the future of hydrocarbons is not going to be a waste by burning them for a little money. It's going to be through value added through petrochemicals and other utilisation for this kind of energy source. So, I think the real challenge for Russia is going to be how do we create the economy of the future and how do we innovate ourselves out of this situation. And let me be very clear, it is my absolute conviction having worked in this field very intensively for the last 10 years. That the future of hydrocarbons is going to be very different from the past.
BRILEV: Let's see, but let me ask you a very last question. I don't really want to spoil your future, because otherwise we'll cover everything and there won't be anything left for the article
AMIN: It is not about the future, it is the future, that we see according to science and projection.
BRILEV: But let me ask you this and I'll be quoting, because this is a complex question and, to be honest with you, this one was prepared for me by the stuff, by the wonderful stuff of the Global Energy Association. Now, researchers from the French Alternative Energies and Atomic Energy Commission have compressed hydrogen to a metal state, previously this was done by scientists from Harvard, where you work now, but as it turns out later… I don't know, what I'm talking about here, so I may be exaggerating, but they quote as “It turns out later, they lost the sample”. Is it true by the way?
AMIN: I wouldn't be able to say.
BRILEV: Okay, according to NASA representatives, metallic hydrogen is very promising, it can be used as an innovative rocket fuel. What can we expect from the new material? Is it really a viable perspective?
AMIN: I think, that there are many, many potential technologies, that are out there including this, but I think that this one is so far out in terms of cost and technical feasibility, that the real change is going to come from actually the production, distribution and utilisation of hydrogen in conventional ways rather than looking for a silver bullet. You know, I found in the energy business anybody who looks at a silver bullet will end up having that silver bullet destroying their career.
BRILEV: Isn't hydrogen one?
AMIN: No, one of events that creates a new future by itself and hydrogen cannot do that. Hydrogen can only be a fast-moving element in a dynamic whole picture, where there are many pieces of the puzzle.
BRILEV: Lovely. Well, thank you so much indeed Dr Amine for this conversation, and I'm looking forward to getting that chapter of yours and by your colleagues dedicated to the subjects. To be honest with you, I was a little bit surprised, when I saw so many people from our International committee, from the expert circle, suggesting that we’ll write a chapter on hydrogen and now it looks like we'll have two and half chapters dedicated to this material, which we haven’t heard since our secondary school days, but which is coming on this new horizon. Thank you, sir!
AMIN: Absolutely, thank you Dr Brilev! Great pleasure to talk to you and let me say I'm also working on the geopolitics of the energy transition. The geopolitics is going to change quite dramatically, the conditions of different countries are going to change, and I think that's also an area that we need to give a lot of attention.
BRILEV: Absolutely. Our next chat is going to be about this. Thank you.
AMIN: It was pleasure talking to you.