gat I wat 2023: Jimmie Langham on large-scale hydrogen infrastructure

Last week, representatives from the energy industry gathered in Cologne to discuss current debates regarding the value of a secure water supply, a sustainable, resilient, and financially viable future for energy supply to both industries and households, and the emerging value chains surrounding hydrogen. Jimmie Langham, our CEO, attended on behalf of cruh21 and delivered an engaging presentation under the auspices of "HYDROGEN RAMP-UP - SAFELY PROVIDING THE REQUIRED QUANTITIES" on the approach to a large-scale hydrogen import infrastructure.

The Big Question: Demand and (Maritime) Trade of Hydrogen and its Derivatives

As a McKinsey study reveals, global hydrogen demand is expected to nearly quadruple by 2040. In Europe, an almost five-fold increase in demand is anticipated. To meet these demands, over 700 vessels for the transport of hydrogen and its derivatives will be required by 2050. Jimmie Langham specifically addressed these requirements and provided a brief overview of CO2-based derivatives. These derivatives have a high energy density and are most compatible with existing infrastructure and application scenarios. However, they require climate-neutral CO2 sources, typically of biogenic origin, which are only available in limited quantities on a larger scale. One solution approach is Carbon Air Capture (CAC) and Carbon Capture and Storage (CCS) in combination with a closed-loop system. Nevertheless, CAC is resource-intensive, and CCS necessitates an additional, parallel logistics chain.

The Future of Hydrogen: Climate Neutrality and the LNG Acceleration Act

Considering the German hydrogen demand, it becomes evident that a substantial proportion of 50 to 70 percent will need to be covered by imports. This underscores the need to optimize existing infrastructure and explore new methods for hydrogen importation. Transportation means play a significant role in this context, with a considerable portion of these imports expected to occur via maritime routes. This aspect offers the opportunity to make the import process more sustainable and reduce associated environmental impacts.

In 2022, there were a total of 188 LNG terminals worldwide. In the context of the energy transition and the goal to establish a climate-neutral energy system, it is imperative to retrofit these existing terminals and construct additional facilities. Retrofitting existing infrastructure offers several advantages over complete reconstruction, as it is typically more cost-effective and can be realized more quickly. This process will play a crucial role in ensuring a sustainable hydrogen supply for Germany and transitioning to a climate-friendly energy system.

The LNG Acceleration Act, passed on May 24, 2022, aims to expedite the construction and utilization of stationary LNG terminals and associated transport infrastructure in Germany. Approvals for such terminals require two main proofs: firstly, the ability to retrofit for ammonia import by January 1, 2044, to prepare for green hydrogen, and secondly, that retrofit costs must not exceed 15 percent of the original LNG terminal construction costs. The law also stipulates that an amendment permit for retrofitting must be applied for by January 1, 2035. Up to this date, there is the possibility to consider other hydrogen derivatives besides ammonia, ensuring flexibility and adaptability to new technologies in the hydrogen sector. The LNG Acceleration Act supports the rapid transformation of LNG infrastructure into sustainable hydrogen supply. The aim is to make LNG terminals "H2-ready." Jimmie Langham further elaborated on the requirements for this conversion.

Technological, Logistical, Economic, and Regulatory Challenges

Regarding regulatory aspects in the introduction of new terminal types for hydrogen imports, several key considerations must be taken into account. These include adapting maritime traffic regulations at the national, European, and international levels, regulating domestic transport, and planning and permitting terminals, particularly versatile "Multi-Use" terminals. The careful adjustment of these regulations is crucial for a smooth transition to a sustainable hydrogen economy and the integration of this essential energy carrier into existing infrastructures.

In terms of technology and logistics for hydrogen derivatives, specific properties are crucial. This encompasses the design of storage tanks, thermal insulation, and the selection of structural materials to prevent damage. Pump technology is equally vital to ensure proper handling and safety. Concerning logistics, the properties of derivatives play a central role, starting with maritime transport and landing, through storage, processing, and onward transport. Leveraging heat and cold generated in these processes completes the holistic view and maximizes the utility of hydrogen derivatives.

In the field of economics, various considerations take precedence. These include the timeline for retrofitting existing infrastructure, as well as the economic viability of a multi-purpose operation. It is important to examine elements that can be implemented in advance to minimize costs and efforts. Material and retrofitting costs, the availability of required components, and follow-up costs throughout the logistics chain are essential economic factors. Furthermore, the organizational and temporal implementation of the transition from an old transport medium to a new hydrogen vector must be carefully planned and coordinated. These economic considerations are crucial for an efficient and cost-effective transition to sustainable hydrogen solutions. The question that arises is: How is the transition from the old transport medium to the new hydrogen vector organized and timed?

TransHyDE and LNG2Hydrogen: Research Projects as Solution

Research projects provide answers to the circumstances of the necessary retrofitting. Two projects in which cruh21 is involved are among them. TransHyDE researches transport and storage technologies for short, medium, and long distances, urgently needed. This is precisely where TransHyDE comes in: the flagship project will comprehensively advance transport technologies, technology-neutral, along the four value chains of gaseous hydrogen (H2), liquid hydrogen (LH2), green ammonia (NH3), and LOHC ("Liquid Organic Hydrogen Carriers"). Another project that Jimmie Langham discussed is the related project LNG2Hydrogen. The project aims to develop a database and recommendations as a decision basis for the future use of LNG terminal locations as logistical hubs for hydrogen and its derivatives (H2 transport vectors).

In summary, Jimmie Langham provided insights into the necessity and our work on a large-scale hydrogen import infrastructure. We thank you for the opportunity and the exciting exchange!

Source: Global Hydrogen Flows: Hydrogen trade as a key enabler for efficient decarbonization Hydrogen Council, McKinsey & Company