During the IRENA Innovation Week 2023, the OECD Clean Energy Finance and Investment Mobilisation (CEFIM) programme and the International Renewable Energy Agency (IRENA) organised a workshop on green hydrogen role in the energy transition on 26 September between 9:30-11:00 CEST at IRENA’s premises in Bonn (Germany).
Green hydrogen is key to complete the last mile of the energy transition. For instance, it can help accelerate the energy transition of industry, especially in those sectors where electrification is not technically possible or cost competitive. To ensure the deployment of green hydrogen, a systemic innovation approach across the value chain is required, covering notably technologies, infrastructures, policies, business models and financing.
This workshop aimed at covering the innovative approaches available to deploy green hydrogen technologies. It convened policymakers, industry stakeholders and finance institutions representatives, who discussed on the latest technology development across the whole hydrogen value chain, and on the enabling conditions and financing instruments that can accelerate its deployment.
Good morning everybody and welcome to day two of the Arena Innovation week 2023 today we’re actually going to be focusing on indirect electrification so how we actually deal with those hard to Abate sectors um one of the things for those of you who weren’t here yesterday is that during the moderated
Discussion you’ll be able to ask questions of the panel and you do through slider you don’t have to download anything just click on it’s all browser based um the other thing I was going to say is today could you again be very careful about wearing your badges everywhere yesterday the museum was
Closed but today it’s actually got uh visitors so we do need to be able to tell everyone apart at the same time I urge you to take advantage of the fact we’re in a beautiful Art Museum apparently there’s a mouse in the wall somewhere but I haven’t been able to
Find it yet so if you see it let me know the first session is called Walking The Last Mile of the energy transition with green hydrogen this session is in partnership with the oecd uh and we’re going to look at innovation in green hydrogen and how it
Can help decarbonize those hard to evate sectors because it’s one thing to say it it’s another thing to do it how do we use renewable electricity to do that how do we keep the infrastructure reliable and stable what it boils down to is what’s the realistic role of green hydrogen in the energy
Transition so our first keynote speaker this morning is from Arena it’s Francisco Belle who’s the head of innovation and end use applications he’s been working with Arena since 2012 and leads their work on policy and Technical advice and systemic [Applause] Innovation thank you very much uh Al Felicia and welcome good morning
Everyone uh to to another exciting day of innovation week so green hydrogen not an energy source indeed an energy carrier and what is what it would carry renewable electricity how much well you heard yesterday we considered that would be around 40% of the final total final energy consumption by 2050 so I still
Not the king of the carriers the king of the carriers will continue to be the direct electricity three times more than green hydrogen but green hydrogen anyway has an important role to play for those so called hard toate sectors how much electrolyzers we would need well first of all the demand for
Hydren May grow six times to what we have currently around 90 million tons per year to around 530 million tons by 2050 and that would require more than 5,000 gigatt of of uh electrolyzer capacity uh important to mention the dynamic of these projections for example last year we expected by 2050 more than
600 million tons by 2050 now it’s a little bit reduced why is that because technology continues to progress now for example we can directly Electrify electric trucks and it’s making a strides in the market a higher temperature heat pumps so we see that uh these uh projections on hydro and demand
Are quite Dynamic another interesting thing is that last year we thought that it might be around 70 75% green and around 25 to 30% blue now in our new projections we see that around 94% would be green and only about 6% blue and why is that just looking at the market
Trends we have now at least in the first quarter up to the first quarter of this year more than 400 green hydrogen projects around the globe and just a little bit more than 20 blue hydrogen so it’s clear that the market is moving more into One Direction than the other
So we have to keep in mind that these Trends are Dynamic so let’s start with Supply what is driving Innovation on Supply well first of all the amount of electricity that would be needed to produce all this green hydrogen is massive so by 2050 we may need around
25,000 tatt hours of electricity that’s more or less the whole electricity we consume in the planet today just to produce green hydrogen by 2050 and of course also the amount of electricity that would be needed uh or the green hydrogen that should be produced should be produced at the lowest cost so we
Still need Innovation to reduce the cost of the electrolyzers but also the efficiency just 1% increase in efficiency of electrolyzers will save us around 120 gwatt by 2050 that’s the total install capacity of a country like Spain just 1% increasing efficiency of the electrolyzers in terms of the peak
Demand more than 5,000 gws many of those might be captive energy so directly uh where the hydrogen is produced not through the grid but a lot will be through the grid and how can this new uh pick loads be managed by the system and then the other part is okay then let’s
Make them become a flexibility providers and that’s possible technology we will hear later electrolyzer can now be more flexible even alkaline ones wrapping up wrapping down faster but the issue is that we need innovation in business model because the business for them is to produce hydren not to provide
Services to the GD so how can we find a way that they are compensated in a way that can really open the door to create a business case to produce enough green hydr but also to provide these services to the GD and be compensated okay let’s move from Supply
To trade so so we see in our analysis that around one quarter of the hydrogen that would be needed by 2050 would be traded so the vast majority will be produced close to the mon but anyway around a quarter so it means around 130 million tons might be traded and out of
That 130 more or less uh 50% might be done through pipelines so not so far from the demand and the other 50% through uh overseas in ships so what is driving Innovation so let’s talk about pipelines around 70 million tons in pipelines now we see some countries saying okay the existing pipelines we
Have from natural gas can transport hydrogen other say I am not so sure if they can transport hydrogen and the Academia said look you have to be very careful because one thing is to say the material you have the use in your pipelines is good to transport hydrant
But another is to use existing pip pins which may have cracks effect of corrosion Etc you will have emment you have have more fatigue so still more Innovation is needed to understand and mitigate those risks then 60 million tons by ship but of course what kind of carrier we will be using ammonia
Methanol a liquefied organic hydrogen as a carrier everyone require different uh temperature different pressure to be compressed different type of storage Technologies systems Etc so we need to plan but what do we plan so we need to be clearer on how what this Market would look like how we will address this
Planning so we need to innovate also in better ways to plan this infrastructure and the third point is of course we need to trade really low carboh hydrate and how we ensure that with certification but we see for example many something important is that hydren is different
Than oil oil is like an oligopoly where you have few producers and many consumers so the producers can set a high price but green hydrant we see very few regions willing to or NE with the necessity to import and many willing to export that’s a oigo Sony so basically
The few importers can set a lower price yeah while you have many willing or expecting to actually make business and Export so we see emergence for example of regional certification schemes but what is the value of a regional certification scheme in a region where everyone wants to export and no one
Wants to import so what is really needed is harmonization at Global level especially with these few markets mainly three EU Japan South Korea at the moment because all the others want to export so how do we address this uh while also ensuring the environmental Integrity now let’s move to the demand
So of course the big expectation is in PTX uh Services also products uh we see the demand mainly for the chemical iron shipping and Aviation certainly we see that hydren might not be needed certainly for Road Transport even trucks residential and Commercial Heating at low temperature even mid temperature not
Really but we will need this PTX still in very important sectors including the chemical shipping Aviation ER steel and iron Etc so more than 350 million tons of H green hydrin for this PTX but then how do we pull the demand for those to to compensate the competitiveness of
Those so we need instruments procurement instruments now we see the auctions where they are asking okay should they be linked to inflation or not we saw what happened in the UK so there are still Innovation to be done on how we create these uh mechanisms and we we Define these mechanisms synthetic fuels
A big question is okay you can have all the renewal electricity and green hydrant but they need the carbon molecule and carbon we have plenty but how to capture and ensure that the final product would be low carbon that’s a different story so direct air capture is still not really commercially
Competitive commercially available we have biogenic carbon that it would be ideal but we see very few countries actually doing an inventory of their bio H facilities how they can capture this carbon and create a new business model to actually use this carbon in the production of this synthetic fuel so
It’s still a lot of innovation to be done in that front as well of the carbon molecule and of course again the question about the infrastructure the recipient also would need to have the needed infrastructure to receive these Commodities to transport these Commodities and also what kind of
Commodity steel for example are we going to see trade of final product of a steel or are we going to see trade of a hot bried iron yeah Korea for example is now talking to Australia to produce hot briet iron in Australia and then send it
Back to Korea to produce the the steel that’s why we produce this toolbox of Innovations where we touch upon all these aspects to address the the the the issues that we mentioned before on technology Market design regulation system planning and business model 30 innovations that we consider critical to
Address these issues not exhaustive but at least some that are critical and of course we think that a general assessment of the sector is not so helpful we need really to understand the different parts of the value chain of hydrin to find the solution we need to really understand the supply but also
The sector coupling with the power system we need to understand the different ways to trade technology certification policy mechanisms on the demand side what are the key areas of demand and of course the enabling framework so the this is what Irena is committed to these are your samples of
Some of the analysis we have publicly available and with that I would like to thank you thank you very [Applause] much thanks Francisco I’d like to introduce our next speaker for the second keynote uh it’s DEA Sean who’s the Industry Program lead at the oecd he’s going to be discussing innovation in green
Finance [Applause] thank you very much thank you Francisco I think this was a great introduction you touched upon the um the um the technology and the regulatory aspects um I’ll try to cover a bit in a few introductory remarks on the financing side you may be curious why oecd is
Looking into you know technology focused topics like hydrogen and and and and uh industry decarbonization but uh our angle um is is on the financing side and on the business models especially um the the work predominantly what we do focuses on the emerging and developing economy so the non oecd
Countries where a significant growth and bulk material Industries happening as well as uh where hydrogen could play a key role there where we hear a lot of uh project announcements but also um these countries uh going to play key role also for the um um export markets as we just
Heard uh from the introductory remarks of the Arena colleague so it is key to understand how to scale up projects how to reach those economies of scale large scale projects and especially to understand what type of financing and also enabling condition related Solutions are needed across the um entire hydrogen value chain starting
From the Renewable Power electroly izer maybe even producing that electrolyzer equipment I think we’ll hear more about that in the in the session and then later the production of hydrogen and its conversion to different derivatives what are the barriers what are the financial risks because it seems from all the
Different projects that are trying to reach a final investment decision financing is a key challenge um you’ll hear more about the insights of our work in a couple of weeks um a new report together with the World Bank hydogen for development partnership and OCD is coming specifically focusing on financing and
I’ll give a brief uh inside a few learnings from that this is an example of the importance of the hydrogen value chain steel production as we hear green steel uh typically produced from the drri uh electric Arc furnace route via the green hydrogen being used as an
Input if you look at the capital cost so this is not the production cost it’s the capex breakdown you see a large share of Electro electrolyzers and Renewables that’s on the right hand side and that’s something we know that hydrogen production cost comprises these two elements but then also the derivative of
Hydrogen production so in this case Iron and steel production is equally important it’s a very Capital intensive sector that’s where a big problem is lying and how to Sol that how to unlock the private capital and how to mobilize that private capital for these Investments this is a 1 million T per
Year steel plant so that costs about a billion dollars that’s a huge investment and given the conditions in many emerging developing economies it’s important to understand that now let’s think a bit step further how are we going to Discount these Investments and we hear typically weighted average cost
Of capital or simply the cost of capital we’ve done um a good survey of um around 4 project developers and finance institutions and looking mainly at the real projects and trying to understand what the cost of capital of green hydrogen projects are the range is quite high it’s from as
Low as 7 to 30% and just to simplify that range on this chart so if you would increase the cost of capital from 10 to 20% so just doubling it the impact on the hydrogen production cost is by 7 % increase on the final value $3 on the
Left hand side is the best project in the most Optimum conditions you see today which is happening so that’s still three times more expensive than the gas-based hydrogen uh production how are we going to close that financing Gap that’s one question and on top of that even as the cost of capital Rises
Because hydrogen is a risky business to some extent we need to understand those risks how are we going to Der risk the projects so that’s the second main question um we are collecting quite a number of case studies from across the world both oecd and an oecd countries
And trying to understand what are the success factors behind projects and these case studies are quite deep Dives um so you can find all of them on our web page going into the details of uh structure of the projects the governance style and so on and so forth and a few
Learnings from these case studies show actually how the hydrogen uh sector the current Investments especially in emerging developing economies can be the risks how these cost can be reduced an important part is the off-take risk if there is an off take issue it is better probably not to invest in the project
This needs to be secured that’s a key area to look into another part which could be important and this applies to many Emerging Markets is the risk around the currency so this is an an area where different types of insurance and guarantee type of solutions are playing a
Role important part you see that in the gray and the and the um the the the green box that’s more related to the structure of the project what’s your business model how do you share risks we see a lot of projects where vertically integrated Partnerships make a good
Business case because the risks are shared across that value chain picture which I shown and also that’s important we hear that a lot concessional Finance so uh a finance with with good conditions is always a solution but we should also keep in mind it’s very scarce especially the Public Finance in
Emerging Markets is very scar so we need to use it very strategically to mobilize the private Capital but it’s a way to the risk also the uh uh projects and we’ve heard I won’t spend too much time on the slide this is the last one my colleague Francisco summarize it very
Nicely it’s actually quite a lot of interventions by the public sector will be needed to create and grow markets we’ve heard of certification uh mechanisms we’ve heard of different uh models to to to um have um competitive projects like auctions even on the demand side models like public
Procurement but there’s a suit of solutions including for financing and until the financing Solutions come I think this uh slide shows a key message and that is we need the right enabling conditions if those conditions are set most of the projects could be viable and then if there’s still a financing Gap
Then um some Public Finance intervention could be helpful so these are all my words and uh look forward to the session later to discuss further thank [Applause] you thank you now could I ask uh Alicia Eastman who’s the president of InterContinental energy to join us for her Keynote Alicia is the president of
InterContinental energy which is a green fuels developer and investor focused on Upstream wind and solar Midstream hydrogen and downstream ammonia so she should be able to explain a lot of what’s going on sorry I have a a very raw voice from speaking too much and and now I’m blind so um we’ll
See how we go um she said I’m Alicia Eastman I’m the president of InterContinental energy um we started about 10 years ago um in order to to solve the problems that were just outlined by the first two speakers from uh oecd and from IRA and I want to thank
Both for having me here to speak um when about 10 years ago my co-founder realized that the cheapest green electrons in the world are found in coastal deserts and so we looked everywhere we could to see uh where there was this perfect dial profile of
Lots of Sun during the day and lots of wind at nights because that increases the capacity factor and I’ll just give you an example of that if you can see this is typ this would be a typical project of ours where you have uh Sun at the exact same time you don’t
Have very much wind and vice versa and if you can see the capacity factors in the bottom chart uh Pure Solar is getting new to something like 24% maybe um and that’s in a that’s like in a desert that’s not in Germany that that’s
In a place that has Sun every day and a good deal of it pure wind also a very good resource of wind that is getting us somewhere in the 40s 45% maybe but if you combine them and they are are coming on at different times you can hit a
Sorry to interrupt but they can’t hear so could you stand in front of the sorry sorry mics if you can combine them then you get uh much higher um capacity factor of somewhere closer to 75% 70 to 75% that makes a huge difference because whenever you want to use uh this Downstream uh
Generally speaking manufacturing does not like to be shut down it likes to have constant energy and uh you need less batteries Less storage overall if you just have you have a flow of energy constantly so since then uh we have started four projects um our first project was the Asian renewable energy
Hub uh which is 26 gaw of Upstream wind and solar it can produce 1.8 million tons perom of a hydrogen of green hydrogen and about 10 million tons perom of green ammonia that project was uh in summer of last year BP joined as an investor and an operator of that project
Um and they changed the name to the Australian renewable energy Hub uh so we could keep that lovely acronym that uh been kind of a having my tongue trip over for quite some time um we our second project that we announced was Geo um so it’s the uh that is the green
Energy um Oman and that is also a 25 gaw project um all built out in stages all of the projects are very similar um and that uh we have partnered with the Sovereign wealth fund of of Oman uh The Sovereign wealth fund of Kuwait Kuwait investment Authority um and shell came
Into that project in December and shell will be the operator of that project um our third that we announced is wgh Western Green energy Hub I lost back AC battle there and um it is uh a really unique project because it’s quite large um it is um about 15,000 square kilm of
Land upon which we have maybe only 4% of a footprint but you need the entire land to have the turbines be separated and we have partnered that project uh with the merning people um they are the native title holders of the land and we decided that we wanted to have a more fair
Relationship with the community than had that had happened previously with extractive Industries like iron ore or any type of mining um so we partnered with the merning they own a percentage of the project they have a permanent seat on the board and we have a charter
With them so that we don’t do anything that can harm their land um and I think it’s really interesting that this discussion topic was about um sort of the The Walking um walking towards um green hydrogen because it’s a very uh typical Aboriginal uh statement and uh it’s
Interesting that the word mning which is our partner’s name actually means to listen to learn to observe and understand for wisdom and knowledge and I think that that’s just encapsulates what we’ve tried to do with all of our projects by listening to all of the stakeholders um by hiring local entities
For everything that we can um and by producing a lot of in country value for these countries where we were putting the projects so that it is a positive impact not just on the environment but also has positive socioeconomic impacts um and then finally we announced
Sara this is where we had a little bit of a it is an acronym but you can also say it um and that is a project we announced with the rumco about a year and a half ago um saudi’s uh master plan has not come out yet uh so it’s a bit
Delayed but uh we expect it to be a great project as well and all of these are everything I’ve described the way that we approach each project is the same for for all four of them and any that come down the line so one of the things that was
Beneficial about making at scale um obviously economies of scale we all we all know that um if you you have a huge piece of land you also can have a cloud in one corner and it’s not in the other so you have a ability to um to to manage
The variability um and with a larger project you also just have more optimization capabilities and through our our work on these projects through the development we have established some IP which we call the uh P2 H2 node um and that allows us to have the absolute most optimized project
Um we originally had had designed an integrated study that uh showed uh it seemed the obvious uh best way to lay out a project but Co thankfully gave us a little bit more time to think about it and we found um something that is just so much less expensive to produce um
Both the uh the hydrogen and the ammonia and as as a um shell and BP once they learn learned of this uh technology and this IP this this approach uh they adopted it immediately because it made so much sense so basically we are driven by um not just building large projects so that
We can meet those demand uh um figures that were shown earlier but also by how we treat the communities um so the CSR BSR ESG all of that is very important to us um we also want robust partners that can can actually bring something to the
Table whether it is land or it is uh um a actual operating expertise as in the case of shell and BP uh they have a lot of background doing major projects um and we are uniquely a long-term investor we are not a land Grabber we are not a flipper before FID
You can see a lot of that in the industry we are going to be with these projects through FID and forever and this is how we do that we are the lead developer and originator we do find the projects we find the projects with the absolute best uh resource profile um
And we develop them as a typical uh wind and solar uh project which is when you need to gather all of the data obviously ammonia is a very old process the hubber BOS process is not expected to change dramatically and then um how we use the electrolyzers most um optimally is is is
Another figure that we have to look into then we we get a a secure and keep a major stake in a consortia um depending on what is necessary for each geography and we maintain that ownership we don’t sell it down by FID uh we have a long-term role to make sure that these
Projects are executed in the best way possible and that involves managing the budgets but it also involves managing interactions with the local community and making sure that we actually provide uh what we said that we would do when we when we set out on this so I’ll I’ll just just shortly this
Is just a real summary of what our all of our projects are and and I guess the only thing that I would point out is uh we don’t believe that hydrogen is a very good energy carrier um ironically uh we think that ammonia makes the most sense
Uh to be shipping um these these grain electrons then turned into molecules around the world and part of that is because it’s the most efficient but the second part is that we would like to use pneumonia as ammonia uh and we are targeting uh uh shipping fuel so
Shipping has very few options I’m sure you’ve heard a lot about methanol um but that is obviously not a zero emissions solution it still pollutes the ocean and the air um ammonia can be a zero emissions uh Sol solution so no greenhouse gases whatsoever need to occur when when making when using
Ammonia um so we see that as the best bet for the shipping industry which is able to make a new vessel in one and a half to two years unlike Aviation uh which would require 15 years plus to have a new aircraft and I think that these two industries will be fighting
Each other over the biogenic CO2 because the planes can can fly on E kosene and that’s about their only only option besides biofuels until they have a new aircraft whereas the shipping can use ammonia very quickly um within the next couple of years it’ll be possible to
Have a lot of different companies using pneumonia there already are companies as well and uh that’s it I’ll I’ll end on on there um because she told me to but um I think it is a um I think it can help explain uh how we get to those
Those uh end points that were described before we really need to have extremely large projects built out in stages and many more around the world um our four are not going to cut it uh we need um we need basically in every geography I don’t know how to get out of this [Applause] so thanks Alicia especially for stopping when I asked you to um could I now ask Dr got mete who’s the global hydrogen lead at South Pole to come to the stage she’s going to be moderating the discussion on all of the things we’ve
Discussed what do we do how do we do it how does it work best now this is the moderated panel discussion so if you do have questions do please post them to the panel via slido Dr um hi everyone great to be here and not
See you very well but uh yeah I know you’re there so we are going to now invite our panel um so yeah uh please come to the stage uh we have with us of bmer he’s head of innovation uh Innovation Center and service and digitalization at T Nera
We have uh with us today Donald Canon he is head of regional representation uh of Southeast Asia at the European Investment Bank uh we have also the pleasure of having norella constantinesco um she’s head of section and Innovation at enoe um we’re also joined by Maria Jen um European hydrogen research leader at
AI uh we have Francisco Maza he is a hydrogen director for repol and then we are also joined by Mark Van stip out and he is Deputy head of unit for research Innovation digitization competitiveness at DG energy uh European commission yes yes I’m very pleased to
Be um yeah joined by you at this panel um so what we’re going to do we’re going to discuss many things um but we’re going to particularly look at the role of hydrogen in accelerating energy transition but but in particular in hard turbate uh Industries we’re going to
Also look at the impact of electrolyzers on the um power system the balancing role they can play then we are going to also look at how we can integrate energy and green hydrogen into end use sectors and of course the infrastructure needs um so what I thought of doing is
Asking you a general question so I’ll get your opinions uh on this um and then I will ask individual question and in between if we have a conversation that’s also great and then we’ll close with a a bonus closing question if you have the
Time I hope we do um so I thought we’ll we’ll stay of course with an innovation theme um but I wanted to ask you since there are yeah there are significant needs for scaling up resources and of course time infrastructure capital for hydrogen projects um what do you think the most
Important innovation to prioritize and let’s look at the next 5 to 10 years even better if we look at five H but I’ll give you the option to look at the next 10 uh years as well um yeah so what is the best use in your uh view uh of of
Best use of our resources to scale up hydrogen through Innovation so let’s start from this way and um avoiding confusion let’s go uh that direction thank you so first of all thank you for the invitation it’s great to be to be here um repol is uh is in fact um really
Committed to uh the de carbonization of our activities uh but we’re talking about hydrogen is is not only that it has become part of our license to operate so uh we are currently working on uh uh a number of projects in Spain uh targeting uh around 2.5 gabs of install capacity by by
2030 uh this this date is is going to be uh very very critical date for us because the rmbo obligations are going to be uh effective uh but we don’t want to play Blackjack around that uh date so we have started to promote different projects uh we are commissioning our
First electrolyzer as as as we talk uh and uh when uh when talking about uh how can Innovation help us uh achieve the goals that we have uh for for for 2030 uh I think that basically um uh we we are we’re very interested in understanding how the uh starting up of
These first electroly are going to work so as to uh learn from these first experiences in the smaller ones and be able to uh efficiently put into production uh the next generation of electrolyzers that will help us um uh achieve the goals that we have for for
20 2030 H still I think that uh anything we’re going to do in between now and 2030 is going to be based on the same technological paradig so we are we are not seeing great uh uh advances in technology in this in this time frame so I think this first
Generation is basically a matter of doing things efficiently learning as quick as possible as as we work and uh for sure finding the finding the right financing we’ve been talking about that right now there’s a funding Gap that need needs to be covered uh so for us to
To be able to uh to deploy this uh this these Investments uh and in terms of Regulation uh I would say uh is the other ground we don’t want too many Innovations to be uh sanctioned at this moment in time we need some kind of stability to be able to make a final
Investment decisions uh so have some visibility about how the the economics of all these are going to work uh so I would say it’s a matter of uh learning from the experiences that we are building as as an industry uh and uh and uh be being being sure that we achieve
The goals that we have for 2030 uh in a stable uh uh context from the regulatory point of view and also setting the foundations for the next generation of electrolyzers that will be put into production 2030 onwards yeah thanks Francisco I like how you started this that hydrogen became your licensed to
Operate I think we should uh dive into that a bit more Maria what do you think should be the innovations that we should prioritize so first of all I would like to thank Sia for um inviting every to participate in this uh panel so to give a little context let me
Um starting talking a little about uh apri we are a nonprofit organization we are uh focus on uh apply energy research and development we are working with more than uh 40 450 companies in 45 countries all over the world and our mission is to drive Innovation to ensure um Clean safe
Affordable Equitable and um and reliable uh access to electricity for the whole society so uh regarding what are the applications that we think that in the next five 10 years maybe could lead this Hy and deployment uh let me talk a little about the early entry markets so
We think that there are some markets where hydrogen have shown the most promise and maybe the where deployment barrier seems to be um relatively lower and could help hen to um you know to be developed in a in a more specific way so if we look at in the industry sector
There are already some industries that they have been used hydrogen for a very long time so what they are trying to do now is replace this natural gas or this faf fields that they have been used and use low carbon hydrogen so we are thinking about chemical industry we are
Thinking about refineries and petrochemical we are thinking about ammonia let speaker talk about this industry and also so we are H talking about the steel industry for example that they are now looking how they can replace part of the natural gas that they are consuming right now and uh and
And use this um renewable hydrogen this is for the industry side if we look for example for the mobility sector heavy duty Vehicles seems to be the uh most promised um sector for hydrogen it’s not a question of if we have to use electric battery fuel cells for example veel or
Hydrogen I think that there’s a space for a lot of the challenge is so huge that there’s a space for a lot of uh different solutions depending on on what we need so for buses for trucks for heavy duty uh we think that hydrogen cool play a key role and also for
Maritime Aviation and Railway also we are um working on that in order to understand how hydrogen could play a key role and just a comment on the energy storage and integration so if we want Renewables to be integrated in the energy system in the past we are moving
From an scenario that there was a very welldefined um generators so we know how we have generated energy that we use and there were a well identified um end uses so in the past the energy system looks like we have generators and we have endusers and
We know how they’re connected but we are moving to an a scenario where we are connecting electricity network with natural gas Network the generators are produced could be uh end uses the end uses could be generators so we definitely need uh large scale solutions for energy storage and in that sense
Hydrogen could play a role um in terms of um large scale we are thinking about above an underground storage so above could offer us store hydrogen from some kilogram to some hundred of tons but if we are thinking about large scale storage we have to think about underground storage where we can store
Millions of tons of hydrogen in a single facility say something about okay but this is still a lot I will ask you to prioritize as we go on and don’t give me everything you have we’re going to have still an hour to talk about um so yeah I
Think um what said about I think the last point was for me the most interesting um where you know the system is changing we’re not just um producing electricity and leaving it on the grd or gas we’re getting closer to the industry we’re getting closer to the sectors that
Use it and we need to learn more about their needs in the sector and and that requires a different relationship and perhaps more Partnerships um yeah moving on to you uh norella what do you think uh what is your priority um probably also from Power sector perspective thank you very much for for
For the question um as because I talked also yesterday so as a representative of transmission system operators for electricity the first thing which comes into my mind uh it’s um actually the challenge we will have in Europe for the offshore development so uh we have 300
Gabs uh only uh uh in U uh 27 I think with if we add also UK then we will go to 400 gatts in 2050 and I think this is an important element which relates to uh the uh deployment of uh um hydrogen but I have to recognize as it was said in
The morning by by Francisco up to 2030 probably the major driver for the hydrogen will be the uh uh use cases uh of of the industry so you men mention the chemical cement and so on and probably in spite the fact that we would like to have this what we call the the
Long duration flexibility so this storage capability which can come from uh from hydrogen in addition to what we have today the hydrop pump storage so we will just stack this value in the business model so I suppose that it’s going to be driven by uh by the industry
If we will manage actually to um look at to avoidance of rest uh curtailment by 2030 so we estimate that this can be uh done uh in a magnitude of 20 to 30 tatt hour so this represents 20 gabat is not a lot but it is something which uh which
Can become consistent we were looking as well uh in the uh hydrogen of course uh we will need uh the market to enable this investment so short sorry medium and long-term signals in in these capacities taking into account count the value stacking uh uh dimension for the
Business models and what I would uh like to mention there is also when we talk about uh offshore I think in Europe uh the um the storage uh capacities in the salt covers are located in that in that region of course we we can have also in
In the South but then there are other Solutions so if I summarise I link it to Offshore developments in Europe 2030 stacking the value if we want more then huge Investments are needed and uh uh yeah uh the uh storage capabilities uh the geological ones are are also there
More in the North Sea brilliant I think uh you you’ve touched upon a few things but um yeah I’m glad you mentioned storage it’s one of the earlier Technologies I think there’s still quite a lot of ground to be covered there especially to bring the cost down uh so
I hope we have time more to open that up um yeah over to you uh Donald good morning and and thank you very much for for inviting us and giving us the opportunity to talk um I’d just like to take a minute to explain my context or
The context of the eib which is you know that we’re the investment arm of the European Union so our objectives are are really about and and particularly outside of Europe are really about supporting developing economies and and we noticed over the past couple of years a very significant uptick in uh the
Discussions around green hydrogen at a political level and and certainly in the lead up to cop 27 vir every high level mission that we had was around green hydrogen um but what accompanied that up up until about 2 years ago eib had about a portfolio of around2 billion EUR which
Is not much in in green hydrogen um over the two years our pipeline this year and I checked the numbers in coming getting ready for today um is currently 4.2 billion outside of Europe so and most of that is in between Latin America uh Africa and um India so there’s been a
Huge uptake in interest in there and what what we’ve seen is a jump in scale from uh projects that are you know small bus fleets using green hydrogen um some small electrolyzer stuff but generally in the order of you know 10 megawatt type scale in the pipeline now it’s all between 50
And 4 400 uh megawatt electrolyzer capacities now none of them have reached FID um and they’re all consider themselves pre pre-commercial or even these big scale you know 400 uh megawatt projects so the Innovation that that we’re seeing is is really broadly around two areas um probably the the more tricky area for
Us is is the grant Finance that’s needed to support this so talking into the I noticed on a couple of the slides there were comments about blending you so blending um some commercial Finance from commercial Banks some lowcost Finance from dfis like World Bank ourselves Asian develop bank and so
On but more importantly with uh grants to help drive down the cost of the the production of hydrogen um the second area that that we see and and possibly can be considered blending as well is technical assistance um we’re seeing most of the interest in fact is coming from uh
Private sector developers um across the regions um and where where the technical assistance is needed is to support uh the sovereigns the governments deal with these guys so whether it’s on the procurement side or on standard setting or you know certification whatever you know there is a fair amount of technical
Assistance but probably on the public sector side that’s needed I want um and and the sectors where we’re seeing they the most interest um is in uh well all virtually all of the projects are um single site single sponsor project so the value chains are are really quite
Short so it it’s one Mega sponsor who’s able to put in place the energy the electrolysis and then the applications and I and I think that’s at this stage that’s really quite important um because as you you add more players more stakeholders you from our point of view
The complexity Rises and the risk factors and the cost of capital goes up and so on so um the kind of operations that we’re interested in and we’re getting are these single sits things and it tends to be um around uh so far ammonia obviously fertilizer as a
Derivative of ammonia um and and many countries see in the consequence of of the events in in Ukraine you know the importance of fertilizer and and developing some kind of Independence there um so that that that was quite interesting interestingly some of the demand that we’re seeing is also from
From steel manufacturers so some steel export ERS um are are very interested and that’s driven in large part by their demands around sustainability you they’re telling me this is an issue for today not for tomorrow because they they it takes them so long to to get their
Processes and everything up to speed so I think th those are the very interesting things so the Innovation for me here that you are asking is is around um providing the right type of Finance in at this pre-commercial development phase yeah that’s crucial point and for
Sure blanded Finance yeah we we need to see more of that it’s still very small um yeah I think uh you did touch upon the right sectors of course with the fertilizers it’s dual challenge of uh food security and energy security so it’s it’s it’s playing a big role but I
Feel like we’re also touching upon something that is like these are very demand driven so there are end users that are demanding uh this products especially green steel um so yeah um let’s uh turn to O I know you are not from the steel uh Department of the
Company but representing Nera but what do you think um yeah the the big Innovations are yeah and also any Reflections on steel would be welcome yeah yeah thank you also from my side uh to be here to be invited um yeah I’m from T C noera and we are developing um
Water electrolysis and of course our colleagues from T C they are in the steel sector just uh to say that yeah what are the the next challenges what are the key Innovations I mean when we he when we hear all the numbers we need to achieve that’s uh that’s uh around
One terat of electrolysis capacity capacity just to replace the gray hydrogen and another 5 tabatt for for the for the whole um um um hydrogen need in in in 2050 I think we should all do the steps now to start now um we have not we have less than one per Mill
Worldwide of green hydrogen in place what we need so the next Innovation should focus on on Technologies which can provide a Baseel load very fast and very quickly so we heard of course that capex is an issue efficiency is an issue but we need now to focus on technology
Which are there that we can ramp up the first gigatt and maybe 10 or 20 or 100 gwatt which are there because otherwise we will not achieve our Target in time so that’s maybe one so the Innovation should focus on things which we can execute in the near future um and the
Other the other thing I see is is all infra all Innovation around the infrastructure you know with the gray hydrogen in place that was all centralized you have natural gas to a side you have a reformer you produce it where you are and then you have your product now it’s different you produce
The hydrogen and the ammonia in different places where you need them you have the hydrogen um produced in Saudi you need them in BBG in the steel facility or you have them in in let’s say in in Spain or in the Netherlands but you need them somewhere else so
Everything around the infrastructure for energy and for the transport of hydrogen and its derivatives is I think also key to start fast and to build up capacities fast yeah and thanks um that’s great that you also mentioned sort of the transport angle I want to later come
Back to Maria and ask a little bit about uh her views on pipelines but of course uh last but definitely not least um would love to also get your opinions yeah thank you and also first of all thanks to arena for inviting me over and really a pleasure to be here at
The Innovation week um I uh I would very much go with uh with my neighbor with wolf actually um and also just a bit to say uh where I come from so at EU level European Commission you also said it we’ve really put a lot of emphasis on
Hydrogen and um building up uh the use and the availability of hydrogen uh over the last years with huge amounts of Investments but uh also big Ambitions so uh at EU level the European commission um we have said that we want basically 20 megga tons of uh clean hydrogen by
2030 10 of those uh we envis to imported and 10 of those we envision to be produced in Europe and that was basically a step up from what we originally said in the hydrogen strategy which was only five megatons for Europe but we speeded that up because of the
Russian invasion in Ukraine and the fact that uh we really need to replace uh much of the gas much faster than we had in mind so 10 megatons in Europe uh let’s say 5 megatons could be something around 40 or 50 Giga water electrolyzer capacity which is then again uh the
Double in renewable capacity so we if we’re talking about uh 20 megatons that means worldwide something like between 160 and 200 Katt of electrolyzer capacity and something like 400 Katt of Renewables which is huge right three 3 to 400 Katt of Renewables so again like fesco said uh my first priority would be
Improve the efficiency of the electrolyzers because between 160 uh and 200 kwatt is a big difference um so that’s really I think the the first aim it you know in in terms of how much electroly capacity we need to install but of course also in terms of how
Expensive the hydrogen will be because it’s simply still too expensive we’re pouring uh we’re supporting it big time with with the eib of course but also with things like The Innovation fund we will get to that later um but um um I think that the uh yeah the basically ramping up the capacity
Improving the efficiency uh to make sure that it is available and it’s cheaper is is very important and just to see illustrate a bit where we where we’re where we are and where we need to go currently I think or in May at least the the capacity in in Europe and and aftera
So let’s say Switzerland and Norway included and lonstein but I’m not sure if they have big plans for electrolyzers um is something like 177 megawatt so it’s really uh an enormous ramp up in seven years and and I think if if I have to say one thing that is a
Priority it’s that and make sure that uh that we improve the efficiency that we that we build them out scale it up and and then of course when we are looking at that and when we are assuming that hydrogen also in 2030 may not all be uh
Competitive let’s say in the in the market like uh hydrogen produced from from gases at the moment uh we of course looking also at how can we make the transport cheaper how can we make the uptake uh cheaper so then we come into to steel and and and fuels and all these
Things but if you ask me one thing I would say electrolyzers make them bigger cheaper more efficient and all that okay that’s that’s a good point but I will ask you later but I’ll let you think as I ask other questions what are the enabling factors of course to achieve
What you think is important to achieve um but let’s go a little bit back to infrastructure I would really like to hear your views Maria on um pipeline infrastructure do you think we have the infrastructure ready is is it the same Roots as you know the gas was produced
Somewhere else and was sent somewhere else is it the same Roots can we repurpose them do we need more Innovations what do you think yeah thank you so much for the question so regarding blending hydrogen 26 um natural gas paper I would like to highlight three main topics so the first
Of all is uh well known and is related to hydrogen compatibility with um materials construction so we are talking about hydrogen embrittlement so um hydrogen embrittlement can lead to fatic Rack uh growth potentially leading to failure so uh this is something that is not the same this is for transmission uh
Pipeline is not the same for distribution pipelines because the uh pressure is lower and because of the materials that in the transmission P usually we use steel and in the distribution we use another type of plastics and another materials so a together with GTI which is the gas uh
Technology Institute in the US and with uh more than 54 companies uh leading energy companies we are working in the low carbon resources initiative which um try to analyze these different carriers what what is the role that play into the carbonization and we are now working and
We are discussing now these topics about uh materials so we are preparing a report that will be published at the end of the year uh for for these L members uh re reviewing you know this material issues a second issu is related to compression stations so um a study that
APR completing this year uh indicates that the centrifugal compression may need replacement when hydrogen blending is above 20% uh 20% hydrogen 80% natural gas and for example uh reciprocate and compressor may need replace replacement where the blend is more or less 50/50 so we have done this study based on the
Compressor OEM survey and uh in um um equipment performance uh a third issue is that hydrogen has about 1/3 the energy content of the natural gas volume so the density is more or less 8.5 less hydrogen compared to natural gas and that implies that the velocities uh will
Be about three times faster uh in the pipeline so hydrogen flowing through the pipeline will transport 80% of the um energy compared to natural gas so this is something that we should take into consideration what we are designing this repurposing and and let me let me highlight another two topics one is the
Higher velocity of hydrogen is the fourth issue uh this means that it will approach the erosional velocity um much quicker at a given pressure compared to natural gas so that means the implication is that you need to space your compress stations closer that now noways with the natural gas uh
Then and and the fifth issue the last that I would like to highlight is related that you will lose uh the benefit of line packing because uh the hydrogen’s lower volumetric energy model shows that you can get three four storage less time um of this line packing so we definitely need you know
To make some changes in the um existing Natural Gas pipelines if we would like to blend hydrogen on the other side just a brief comment on the we have been hydrogen have been transported by a specific and 100% hydrogen pipelines in the past I think that we started in 1938
Something like this uh because usually they this is a short pel that they are connected directly to and uses that are using 100% hydrogen so we have experience also on that point uh so um there are some Initiative for example in Europe the European H backbone which implies more than 32 transmission system
Operators that are evaluating how they can repurpose at European level all their Assets in order to see which one makes sense to repurpose and which one makes sense to build new hydrogen PAB and at the end one of the conclusion that they are um you know publishing is that almost 70% of the
Um existing natural gas uh pipelines could be rep repurposed for uh hydrogen blending uh the percentage is not clear it depends on the materials it depends on how many years that acid have uh but for sure this is a transition you know for the decarbonization targets that that Europe has established and blending
Hydrogen into the natural existing natural gas um Network could play a key role mhm yeah thanks a lot also for sharing quite technical details with us um that’s that’s an these are interesting numbers you shared and but seems like there’s more to see um how
About the role of uh the grid so um do you think the grid is [Laughter] ready of course already there in Europe it’s it’s making I think quite good job for the moment um now uh regarding the Rel relationship between hydrogen and and the electricity uh grid um I mentioned yeah this uh
Renewables uh capacity in the beginning um and um what of course we think that uh it is coming um like important uh and uh developing uh uh at the same Pace with the uh Renewables deployment it is uh uh the vast volume of flexibility ities so of course there is
Hydrogen uh with uh this maybe time lapse which will take until they they will come also uh mainstream I mentioned uh the long duration capabilities but indeed um they can provide even today so the the Technologies we are which are there so they can provide uh the um requirements flexibility requirements uh
Similarly to to to the battery and to uh to demand response um we checked uh I think three Technologies and they can uh they can provide those services so uh frequency control uh congestion management a little bit less I think on on the voltage control but it can be uh it can
Be used also for for that so but there they will be competition with the other with the other Solutions on the long uh term storage I think that of course we have hydrop pump storage but this is not sufficient so there I think it’s it’s a major uh it’s a major
Technology uh What uh of course we will still need uh the expansion of the grid and the grid infrastructure being electricity on or hydrogen so it has probably the same issues in terms of Permitting uh in terms of deployment in terms of also of uh of financing and uh and regulation um
I would not uh um repeat maybe what I said yesterday so there is also the uh the issue of the uh operation of um of the grid because by linking all these millions of of assets so we need to to underline once again uh the use of digitalization we cannot do uh operate
The the the grid the same way as as we uh did up to now so of course we use digital Solutions but this way will will have to to be increased and everything should be automated to have a decision support and of course with that comes the cyber
Security uh and uh what I will uh also say um it’s uh the uh regulatory framework where we have to have a kind of uh system perspective and uh try to optimize uh as much as possible the use of the assets so if we have the electricity Network or if we have the
Hydrogen Network the gas Network so how we make actually these interfaces working together and how we can optimize uh the use of the Assets in order to yeah uh to have the Investments not exploding because in the end we have to look also at affordability criteria yeah
Brilliant I I think you you really touched upon that yeah best use of resources Point again there uh and permitting I I was yesterday at the German heavy Industries clima Congress and it was mentioned that it can take up to eight years for a hydrogen plant to
Yeah be up and running from the start and I was surprised and I hope it’s not true but uh that’s what they said um so let’s go back to a little bit more the derivative sector so of course that requires a different set of infrastructure so um when we look at
Ammonia and refining yeah you you need also crackers uh to be able to import uh so what you think on on that front do you think we are ready we have the knowledge Innovation and maybe the investment already or do you think there’s yeah there’s more to be done no
For sure there’s uh there’s a lot uh to be done uh not not only on the technology side but also how you’re going to structure the value chain from for instance from a contractual or commercial point of view so all this is to be is to be done uh and we need to
Secure the Investments as Donal was saying in a way uh and uh and we are dealing with for instance some some industries that are not used to for instance to long-term Contracting like the shipping industry or some others so uh there are Innovations all along the value chain and in in many different
Many different aspects when uh talking about um uh hydrogen derivatives well the first thing that we always say is that uh uh we we are producing hydrogen for ourselves that’s the that’s the top priority to uh to somehow decarbonize our activities uh and trans form our industrial activities uh but we’re also
Having a look at uh uh gaining economies of scale as we do this and uh having a look at the potential that the Spain has as a as an export country and that in that respect we are uh exploring different opportunities uh Associated to different derivatives so we are kind of
Agnostic there so what we are doing is getting in contact with the market understanding what the market is interested at and that’s the kind of project that we are pursuing in Spain at the same time um we’re a little bit worried about uh uh great developments uh about uh the sanctioning
Of the project the bureaucracy behind all these developments so uh we’re also having a look at eventually potential Imports to Spain that could take advantage of this low Bas of adaptation of the environment in Europe and in particular in in Spain so we’re having a look at projects uh like the ones that
Alysia has explained to us that could eventually bring uh some derivatives into to Spain and compete with our own developments so in the long run we see Spain has an Europe in particular southern Europe northern Europe with Hydro H have uh a lot of potential to become net exporters of hydrogen using
Different different derivatives but uh there might be a wind of opportunity for these importing these exporting countries to import a share of their needs if we are not capable of finding the right financing if we are not capable of uh putting in place uh uh the the grid that is needed accessing the
Water that is needed for this uh development we not capable for instance of managing the social issues that arise uh when you start using a big amount of land for this kind of developments in certain Community communities and certain regions so although uh in the long run
There will be uh I think NE export from from countries like Spain uh having a look at well from a different perspective to the import of some derivatives uh when talking about um uh derivatives in particular we uh we are uh uh investing in a uh demo plan e demo
Plan in bilau uh so that’s that’s something we’re doing uh we’re investing in an ethanol project in in taragona having a look at ammonia prods as well so far we have not taken fighting of any any of these products but as I mentioned uh not only interested in replacing the
Uh the Commodities that we uh marketing uh as of today uh but also interested in the Commodities or the derivatives that can be used as a mean of Transportation of hydrogen in run and that can give us this economies of a scale and take advantage of the position that we have
In Spain thanks a lot it looks like you are doing your share to explore um yeah your role to enable that infrastructure uh but hope you get the F soon and you have the right environment to do so let’s integrate a little bit the audience questions as we move along
There’s one question I think would be great for you uh we have been asked about energy colonialism the how we have we avoid the the new era of energy colonialism with green hydrogen um perhaps you could share your perspective by yeah in Southeast Asia or South Asia
Um and yeah what do you see uh in terms of you know how hydrogen is produced and used or exported that’s an really an outstanding question it was one of the key points I wanted to make this morning in fact um so thank you whoever it was was really
Really lovely um yeah so India is is perhaps an interesting case um in India was very Cal dependent and and still is um but it has now the second lowest cost of electricity in the world um thanks in large part to its uh auctions around solar and wind and there’s about $0
Billion worth of new investment going into renewable energy every year in India and and the it is now cheaper to produce uh a new solar plant than it is to to generate electricity from solar than it is from coal in India so I think there’s a huge opportunity um in terms
Of energy colonialism I I think you know perhaps economies like India are are you know they’re up and running they they’re doing their own thing where I think these kind of risks are true um are probably in Africa subsaharan Africa and and the reason we would want to to
Invest in subsaharan Africa are probably some selfish ones some some altruistic ones on the selfish side you know Africa because of its solar and and wind endowment will be able to produce electricity and green hydrogen at a cost that Europe cannot perhaps the exception is you know southern Spain but you know
Africa will will be able to produce green hydrogen at a very very low cost and and given the limited economies of scale that are achievable with green hydrogen it’s it’s not like offshore wind where we saw dramatic Falls over 20 30 years in the price of of offshore wind because of improvements in
Technology because the the height of the the turbines and so on that they could achieve there are probably less opportunities for those kind of economies of scale in green hydrogen so in terms of achieving the gigawatt scale uh and the mass of green hydrogen that
We want to do we’re focusing on the cost of electricity and and therefore it’s important that the the solar rich countries um play an active role in that in northern Europe we cannot ever achieve the cost of of green hydrogen that Africa can in terms of energy coloni
Ization um one of the approaches that the eiib is doing is very specifically looking at uh the environmental and social outcomes uh of the projects that we operate in and and we put in place um a framework of indicators and and periodic measurement by independent organizations on social and
Environmental outcomes and a particular on green hydrogen um there are a set of uses around or a set of issues I should say around um access to energy and access to water the two key ingredients for green hydrogen and and so our proposal and and
We did a study on this um to in preparation for cop 27 which showed that um Africa has a huge potential for for the production of green hydrogen we’re suggesting 20 20 megatons in just three hubs uh South African Hub um Egypt and a West African
Hub so 20 megatons a year by uh 2030 and up to 50 megatons a year by 2035 so huge potential but what we’re saying at the same time as we’re doing this investing in all of this solar and the the uh the electrolysis and so on um we should be
Investing in access to energy and water and we are making that a a requirement on our investment programs and we will be measuring it so I think that’s perhaps a partial answer to the question but anyway thank you for that yeah it’s a good question not an easy one to
Answer we’re a bit getting short on time but we have still some questions here and I think yeah it would be good to yeah go still back to technology I I really want to hear from you of why you you have chosen it to synr alkaline
Electrolyzer I want to hear about that H if you can answer that briefly and also like mention how you choose your partners we have a good question from Alicia about um oil and gas producers and whether they make reliable Partners um you also have a lot of Partners and
You yeah you probably provide technology to actors like oil and gas majors um so I wonder what’s your take on that uh but yeah a little bit if you can tell us about the the alkaline technology briefly that would be great before we have the last question maybe to the
First question why we choose and develop and sell um alkaline electrolysis I mean that’s twofold on the one hand it’s our heritage we’re doing Chlor alkaly electrolysis which is very similar you also produce hydrogen by that for 40 years we have built 600 world scale plant or industrial scale
Plants with it had a have a combined capacity of 10 gaw so it was an easy choice to build on that Heritage and and and convert this into water electrolysis um the other one is that alkaline water electrolysis is for scale is made for scale and you can really
Build big plants so we at Nera we are um we come from the industrial plant business so we we used to build big plants and so we are not we are not used to to let’s say to deal with municip with with let’s say with with with
Cities with with smaller um um um um consumers of hydrogen but normally with with our pairs like like from the oil and gas from uh um from other sizable uh industry so that was our logical uh choice to to stay in that area and then alkaline water electrolysis is just the
Technology to to use for this bigger scale for partnering um I mean there’s always come something into my mind so we are in a very I think complex challenge now with the energy trans position and I heard one say that the only um um the only way to handle complexity is
Collaboration so you have to collaborate especially for the energy transition and are oil and and gas companies good partners I think yes because they also feel the pressure to to transfer their business model into Renewables and they are reliable because they are in this business to really produce on an
Industrial level for decades so it’s not or they they bring the experience with it to to develop this project and then to to operate the plants for decades which is just needed so for us these are good partners and these are Partners which we deal let’s say for the last
Decade so this is a yeah this is a proven partnership would say yeah thanks a lot for rounded answer um I will keep my promise and ask you about enabling conditions but we also have a tough question here so I’ll have to ask that too and the question is around yeah
Isn’t it better to move Industries where solar is cheaper to India Ora Africa where energy is stuper we know that answer is very complex of course but I wonder what uh the European commission and the you know the policy regulatory Frameworks uh that you have in mind are
Doing to keep the industries here keep the workforce here or or even bring new Industries here to yeah to make it also a Clint Tech and Innovation Hub in Europe yeah also a very good question um that’s and uh yeah let’s say the uh the the fact that energy prices in Europe
Are high or are very high and are higher than our competitors is is a big source of worry of course um so this is something that uh that that uh that we know is is critical to competitiveness of the energy intensive industry um I think it you know it’s of
Course not the only thing right uh there is uh the the infrastructure uh surrounding uh an industry the workforce the you know all these things matter as well but uh this doesn’t uh change the fact that if you are an energy intensive industry then Energy prices are kind of your main uh
Main concern for competitiveness and this is something that uh yeah that we in Europe uh we have always had the situation that uh we don’t have let’s say that much oil or gas in the ground or at least not enough so we’re importing so that’s also why we have
Emphasized Energy Efficiency so much in in all our policies uh so that has been uh and and still is one of the one of the cornerstones of our policy and and we see also that the the industry a lot of industry is is in Europe because uh
It is able to still be competitive on the one hand because of investments in in Energy Efficiency but also just because of the the types of innovation and and the type of quality products uh that we uh that the industry produces um I think secondly um the the uh let’s say
The transition to Renewables of course means that we will uh have uh cheaper access to electricity and I think we realize that once again uh with uh with the Russian invasion of Ukraine because uh then suddenly the the cheap gas fell off and uh and that is also why we have
Insisted so much on building out the Renewables even faster because that is the the cheapest source of of electricity um and uh and thirdly I think we also realize and I think this is also linked to this question about uh uh energy colonialism the the let’s say the global landscape is changing right
The the the the the proponents of open trade in the world or just full open trade or trade is always good are uh less and less uh uh there less and less of them and um uh you you and of course now with the with the with the with the
Clean uh or with the energy transition uh we see that um more and more countries are uh on the one hand making uh big investments in in Renewables like in India but also in the US we talk a lot about the inflation reduction act as a as a threat to the eu’s
Competitiveness but I think first and foremost it’s it’s it’s the the biggest uh um uh let’s say the biggest news about it is that the US is finally making big steps into investments in Renewables and I also don’t think it’s a zero sum game where let’s say uh an
Investment will be done here in the US the the market is expanding big time um but uh the we uh we also see that in the EU we can we need to be less naive in terms of relying on uh Imports for everything from uh very few sources so
This diversification of uh of import this diverse this focus on critical raw materials for example and where do we get them the the importance also of um having domestic uh production domestic manufacturing of parts of the value chain of these Clean Energy Technologies is going to be critical for the uh for
The green transition and for the green deal so this this is getting more and more importance in Europe in um let’s say next to all these targets that we have that create demand for uh Renewables for hydrogen for for clean steel all these things uh also uh
Focusing more and more on the supply side of it where is it manufactured and how we can how can we make sure that it’s actually being manufactured in the EU or some of it like with hydrogen we we don’t think that all of the hydrogen
Needs to be produced in Europe uh but it needs to be some kind of a fair balance between what we import and uh what we uh uh and what we manufacture ourselves and of course we also so uh still uh are in favor of free trade so that we can
Supply the Technologies also to the rest of the world but this is going to be uh let’s say this is going to be a huge competitive race but I think in essence again like with the US investing in in energy clean energy so much it’s it’s a
Race that is good for the world right the we of course solar panels uh all being manufactured in China um and H having taken over the European industry is a a sad case of of industrial policy but it’s a huge success in terms of making solar panels cheap and available
Everywhere in the world so it’s uh yeah I would in this discussion also warn against too much you know one-sided look at the things um absolutely agree um well thanks to all of you for answering my and audiences difficult questions um more dares um and yeah there’s lot more
To talk I had a lot more questions we still have good questions but the time is up I really enjoyed this conversation I hope we’ll have an opportunity to continue uh during the the days following but yeah thanks a lot and we’ll uh yeah we’ll uh continue thank thank You thank you all very much for joining and as this morning’s session was a joint session between Irena and the oecd I’d like to ask Francisco Belle and de Sean to come up and give us a few notes thank you uh Felicia and also from arina’s side we want to thank all the
Panelists and the moderator for really a very interesting and exciting panel I think I personally learned and enjoy it quite a lot so thank you so much for that and a few quick takeaways I think on technology we heard that Innovation should first of all uh focus on scaling
Up the technology that we already have available to go really into the gigawatt scale and at the same time then continue to improve the Technologies efficiency is key not only electrolyzers but the system efficiency so that’s uh very important on the technology front on infrastructure a lot of uncertainty on
The Commodities we may be trading but it’s clear that we need uh planning and we need to realize that there is a paradigm shift in uh the previous one two Commodities per sector to multi commodities per sector on uh transmission gas pipelines we he about there still a need to better understand
The risk especially for transmission in of Blended hydrant in pipelines and find ways to mitigate uh those risks h on electricity grids we hear that U grids are of course available and are there but we need to optimize those assets use digital Technologies Etc to improve let’s say the opportunity to integrate
Smartly those uh electrolyt in the system H in terms of Regulation we also heard about trying to streamline permitting and what is also called bureaucracy very important because if there are delays on that side it may end up in a call for more imported uh Fields because domestic production may take
Longer than expected so for some reasons this might be extremely uh important sustainability was mentioned also I think most of us 10 years years ago would not expect to be talking about today about million tons of uh derivatives from hydrogen Giga scale plant for electrolyzers ETC so certainly
Sustainability is making uh an effort and international collaboration also key and that’s the spirit of this conference so we are very happy that that’s also a key point so now our friend from oecd thank you thank you Francisco and I left it to the end but thank you so much for
Organizing this together with OCD I think that was a great opportunity because we were able to bring the Innovation on the financing aspect also so I hope the um the the the discussion um was very helpful to put things in a bit of a broader perspective and and a
Few points which I took note of from the uh from the discussion that the the investment decisions are becoming very complex because of this Capital intensive projects and the existing financing Gap so when we also heard about the infr structure angle it even makes it and or it adds another layer of
Complexity which needs to be resolved and financing again there plays a key role I think the uh when we look at all these projects that are being announced of different stages the the key number there is that it’s less than 10% of everything which is announced is actually turning into uh
A final investment decision so that’s that’s quite worrying for such a sector that is going to be key for Net Zero emission uh targets and then um I think the key point that was mentioned is the understanding the barriers the risks and developing the right financing solutions
To be able to address those risks there Blended Finance we’ve heard which is the Strategic use of Public Finance to mobilize private capital I emphasize that definition is critical and then once the the risking happens than exiting the market with that financing instrument because Public Finance is
Scarce and I think it is is important to reduce the cost but as was mentioned it’s also um uh needs to be used very strategically technical assistance is key as we heard and final word which was very essential and thank you for mentioning that how are we going to
Measure the social and economic impacts of these investment so the financing Solutions need to also go hand inand with those thank you very much again and thank you Francisco uh for your ATT thank you gentlemen and now you’re released for coffee so time for coffee
In a chat I hope you have a chance to talk to the people that you want to there are three sessions after coffee so we’re going to go basically and break things down look in more detail at different sectors so if you’re interested in decarbonization of the
Iron and Steel sector then come back here to The Forum if you’re interested in decarbonization of the chemical and petrochemical sectors that’s in the lounge upstairs and there’s also the youth and innovators Hub which is at the arena office which is just down the road
A couple of minutes to our left as you come out of the museum so I will see those of you who are interested in focusing on Iron and Steel back here at 11:30 thank you very much much