Hydrogen moves toward commercialization as Singapore plans first imports

Commercial renewable hydrogen has moved from being a concept a decade ago to an alternative fuel source, but significant steps still need to be taken to build out the supply chain, drive down costs and create downstream demand, industry experts said at the Asia LNG & Hydrogen Gas Markets Conference in the week to Oct. 29.

"There has been an absolute sea change in the way the world looks at hydrogen as a potential decarbonization solution," Kenneth Kong, Senior Vice President of Group Strategy & Portfolio at Sembcorp Industries said. "The giant is well and truly awake."

Singapore-based Sembcorp is a diversified company with operations spanning water supply, waste management, gas imports and power generation that encompass an energy portfolio of over 12,800 MW, of which more than 3,300 MW is renewable energy,

The company in early October signed a memorandum of understanding with Japan's Chiyoda Corp. and Mitsubishi Corp. to explore a commercial-scale supply chain to deliver decarbonized hydrogen to Singapore, making it one of the first utilities in the city-state to move forward in introducing hydrogen into the energy mix.

The partnership will utilize Chiyoda's hydrogen storage and transportation technology in which methylcyclohexane or MCH will be the liquid organic hydrogen carrier. The selection of the MCH route is significant because other green hydrogen exports from places like Qatar have opted for liquid hydrogen, while other exporters in the Middle East are exploring ammonia-based options.

Kong said Sembcorp's strategy around hydrogen emanates from Singapore's four key energy switches for decarbonization that include natural gas. solar, low carbon electricity imports and new fuels like hydrogen.

When asked about the evolution of downstream demand for hydrogen, Kong said eventual consumption could be split across a range of sectors outside power generation, and not all end-users would be expected to make the first move, but interest was growing.

Small-scale hydrogen

In "the last 24 months we saw a change of perception," said Mathieu Geze, VP Asia of independent power project developer HDF Energy, adding that governments and conglomerates from Europe to Japan had changed their views on hydrogen and "somehow made the work easier."

Geze is implementing HDF Energy's localized hydrogen-to-power infrastructure in Indonesia, under which renewable energy will be used to produce hydrogen on site via small-scale electrolyzers, and the hydrogen used to produce electricity.

HDF recently reached financial closure for a Euro 170 million ($197 million) project in French Guiana to supply renewable power that comprises a 55 MW solar farm, 130 MWh storage and a power purchase agreement with consumers.

While big industry players are focusing on scaling up and commercializing large-scale hydrogen, HDF's approach has been to develop small-scale projects first, in middle income countries like Indonesia where access to conventional fuel sources in remote locations is expensive.

"What I can't see is what will happen in the coming 2-6 years [in large-scale hydrogen]," Geze said. "We see that the large conglomerates are focusing on demo projects to test the technology, to test the suppliers, the contractors and so on. That's great, but we don't see something in the middle, between the pilot schemes and the gigawatt scale."

Cracking the demand puzzle

The confidence that hydrogen can hold on its own comes from the success of the LNG market, where technology made it possible to ship vast amounts of liquified natural gas around the world.

"What people are keen to understand is what price of hydrogen we need for it to be better than the next best decarbonized alternative," said Mark Allen, founder and technical director of Engeco, a climate advisory. "That is an indication of where the demand may be."

Clients are asking where they can see the demand centers, how to incorporate hydrogen into their operations, whether renewable or conventional hydrogen would be good for them and what could be a roadmap, Allen said.

He said a lot of interest in hydrogen was coming from hard-to-abate sectors such as steel and metals, where the fuel is a viable decarbonization alternative. There are thoughts about innovations such as rather than transporting hydrogen to the steel mill, use it to process iron ore at the mine site to overcome the transportation challenge, Allen said.

Kong said Sembcorp's strategy is to establish an end-to-end supply chain to bring decarbonized hydrogen into Singapore, including parts like storage and transportation infrastructure.

"So basically it is an end-to-end integrated solution. And that's how we de-risk investments going in because we are able to segregate each part of the supply chain and understand what we need to do to drive cost out," Kong said.

Sembcorp is targeting to bring decarbonized hydrogen into Singapore in a semi-commercial phase within the next five years and then ramp it up. "To me the milestone would be to get it here... until the molecule lands, it is not real," Kong said.

Price assessment for Japan hydrogen in Yen/kg

Source: S&P Global Platts