Politician Embarrassed For Telling The Fact: Cupboard Minister Criticizes Norway’s Inexperienced Hydrogen Targets
Norwegian cupboard minister Ola Borten Moe recently criticized plans by state-owned renewable-energy producer Statkraft to construct 2 GW of inexperienced hydrogen in Norway by 2030. In a Fb publish, he expressed issues in regards to the quantity of energy wanted to energy 2 GW of electrolyzers, which he estimated would require 12-13% of Norway’s energy, and that changing electrical energy to hydrogen and again once more would end in 75% vitality losses. He known as the objective “mild years away from being justifiable or wise.”
Nonetheless, Borten Moe’s assertion got here hours after two fellow cupboard ministers within the coalition authorities had taken German vice-chancellor Robert Habeck on a go to to a hydrogen manufacturing unit, the place they mentioned plans to construct a large-scale hydrogen pipeline between Norway and Germany by 2030. Borten Moe later acknowledged that he had not meant to criticize authorities coverage and that he agreed that hydrogen may make sense so long as it was using surplus renewable vitality.
That is an attention-grabbing chain of occasions and value unpacking a bit.
First, was Borton Moe appropriate? Sure, sure he was. In line with information from finish of 2020, the whole put in capability of the Norwegian energy provide system was 37,732 MW, and regular annual manufacturing was 153.2 TWh. At 90% utilization, 2 GW of electrolyzers would require roughly 17.52 TWh of electrical energy per 12 months or about 11.4%. At 100% utilization (unlikely), it might devour 20.74 GWh, or 13.5%. Borton Moe’s math is nice.
As I identified in a report for northern African inexperienced hydrogen manufacturing final 12 months, inexperienced hydrogen requires firmed electrical energy to realize excessive utilization elements for electrolyzers. You can’t make cheap hydrogen with occasionally surplus electricity as a result of capital prices of the electrolysis plant, and to be clear, a 2 GW plant is a big plant. And if hydrogen isn’t down close to pure fuel when it comes to prices, nobody goes to make use of it.
So, firmed electrical energy. In Norway which means enterprise charges of $166 per MWh. Borton Moe was pretty correct in regards to the quantity of vitality wasted in manufacturing, compressing, distributing after which utilizing hydrogen for electrical technology. Utilizing his 75% waste quantity, that implies that the wholesale worth of electrical energy in Germany from this hydrogen deal could be round $664 per MWh, simply from the price of the electrical energy inputs.
In the event you don’t use firmed electrical energy, however run electrolyzers at 40% capability elements, then you definitely nonetheless should make particular offers for off-take and transmission with grid operators, as wind and hydro services aren’t onshore or subsequent to at least one one other, so getting electrical energy from each requires transmission infrastructure and the like. Assuming you may get electrical energy for half the value, the capex drives the hydrogen value again up, as Lazard’s hydrogen LCOE materials makes clear.
Previous to the vitality disaster, Germany had among the many lowest wholesale electrical energy costs in Europe, averaging underneath $50 per MWh, so Norwegian inexperienced hydrogen could be about 14 occasions costlier. Even on the worst of the vitality disaster, which is dwindling as I predicted it would back in September, Germany’s peak wholesale prices for electricity have been solely $469 per MWh for a single month, and on common have been underneath $200.
Getting hydrogen from Norway for electrical energy in Germany would imply wholesale electrical energy charges thrice increased than the common in the course of the vitality disaster. That’s not an economically viable vitality coverage.
So why is Norway pushing this nonsense? In 2021, oil and fuel made up 21% of Norway’s GDP and 51% of whole exports. 21% means nearer to 50% of secondary and tertiary GDP. With out oil and fuel revenues, Norway would collapse in on itself.
It’s not like Norway didn’t see this coming. The Authorities Pension Fund of Norway, also referred to as the sovereign wealth fund, was established in 1990 to handle the nation’s surplus oil and fuel revenues. Initially, the fund was created to assist make sure that future generations would profit from Norway’s pure useful resource wealth. The fund’s property have been invested primarily in equities and fixed-income securities, with the goal of attaining long-term returns to assist fund the nation’s public pension system. The fund has grown considerably through the years and is now one of many largest sovereign wealth funds on the planet, with property valued at over $1 trillion as of 2021.
However having been good ants and never grasshoppers like Albertans, Norway remains to be topic to short-term silliness. The present crop of politicians working issues, except for Borton Moe apparently, have their noses open with the hope that hydrogen will save their financial system.
The oil and fuel majors corresponding to Norway’s Equinor see this most clearly. They’re pushing a selected narrative onerous, that we have to exchange gases and liquids used for vitality with gases or liquids which are inexperienced, and that hydrogen is the reply, whether or not used instantly or made into artificial fuels. Given the economics above, they know that if they will get governments to make this the transitionary technique, then blue hydrogen will out of the blue look low-cost and be closely used as one other ‘bridge’ gas as pure fuel was claimed to be. In the event that they don’t succeed on this, then all of their fossil gas reserves are price nothing, and so they are going to be price factor.
How huge a deal is that this? Norway has 51 trillion cubic ft (Tcf) of confirmed pure fuel reserves as of January 1, 2022 and every Tcf was price about $three billion in 2018 within the least expensive pure fuel markets on the planet. That’s what’s at stake, and that’s why deeply irrational behaviors are rising in oil and fuel economies like Norway.
After all, this isn’t a local weather or vitality resolution in any respect. Beginning with the vitality half, it truly makes rejected vitality worse. Sankey energy flow diagrams will include even more rejected energy if steam reformation of pure fuel or coal gasification processes are used to extract hydrogen from these fossil fuels. They usually’ll get even worse if hydrogen is made into artificial fuels. All of that rejected vitality comes from someplace, and sooner or later it’s imagined to be inexperienced electrical energy. Throwing away not two-thirds of vitality however five-sixths of inexperienced vitality we don’t have is a remarkably unhealthy concept.
On the local weather facet, steam reformation of hydrogen means upstream methane emissions throughout extraction, processing, distribution, and use, and methane is a potent greenhouse fuel. Norway occurs to be among the many world’s greatest at stopping these leaks, so they could have the ability to sq. that circle, however the steam reformation course of produces 8-10 tons of CO2 for every ton of hydrogen. That’s the place carbon seize is available in, however that’s an vitality intensive course of as effectively, taking 15-25% of the vitality of the method, and that CO2 is heavy and ponderous. Cradle-to-grave seize, distribution and sequestration of CO2 is effectively over $100.
Oh, and that’s for a budget model of carbon seize that solely captures 85% of the CO2 emissions from steam reformation. If you wish to seize 98%, it is advisable put one other course of in with extra vitality necessities and capital prices. Two-step carbon seize is what Carbon Engineering does with the natural gas it makes use of to energy its silly direct air seize course of, which as I identified just a few years in the past, implies that a 3rd of all of the CO2 its course of delivers is from burning pure fuel, not capturing it from the air.
So blue hydrogen isn’t a local weather resolution. And it’ll nonetheless be much more costly than pure fuel per unit of vitality. I labored out for the part of the report on Algeria, a serious fuel exporting financial system, that blue hydrogen would be five times more expensive. That’s vitality disaster costs for pure fuel, and that was utterly unsustainable. Blue hydrogen isn’t an vitality resolution for Germany both.
Norway is only a wealthy, European Algeria with a giant piggybank. Which means it’s going to outlive the transition adequately, however its financial system goes to radically rework. And that transformation is looming, as I identified with the expectation of peak oil demand in the last half of this decade, and peak pure fuel demand possible by 2035. And which means very odd behaviors like Borton Moe being publicly embarrassed and humiliated by first telling the very apparent reality after which being pressured to eat his phrases.
Why is Germany being so obstinately silly about this? Effectively, that’s a special story. I think Merkel would have been doing issues otherwise than Chancellor Scholz, however she has a doctorate in quantum chemistry and labored as a analysis scientist till 1989, whereas he has a one-stage authorized diploma from 45 years in the past and has principally been a STEM- and better education-avoiding politician since.
This text was written with some help from ChatGPT and the heading picture was generated by DALL-E.
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