Hello and welcome to the Process Automation Podcast, a podcast from ABB that shines a light on their process automation business and the work they're doing around the world. I'm Fran Scott, scientist maker and all around engineering geek. Across this series, we've been exploring the invisible force of automation. So that's the incredible processes happening under the surface that enable
us to live our day- to- day lives. From the heating in our homes to the energy that powers it, ABB's technologies are working behind the scenes to orchestrate industrial processes, machinery and systems. Today, we are looking at the future of using hydrogen, specifically a green hydrogen as an
energy source. The demand for hydrogen is growing. According to the International Energy Agency, clean hydrogen is currently enjoying on unprecedented momentum with the number of policies and projects around the world expanding so rapidly. We'll get onto what is green hydrogen later in this episode, but let's start with
the why. Hydrogen has great potential to play a really important role in helping the world meet its climate goals, particularly when it comes to decarbonizing heavy industries where emissions are hard to offset. According to the Hydrogen Council, around 18% of global energy demand could be met by hydrogen
by 2050. The pursuit of hydrogen production processes powered entirely by renewables is forecasted by Morgan Stanley to drive the hydrogen market forward from a value of $ 150 billion in 2020 to an estimated $ 600 billion by 2050, but more significant than its rise in fortunes is the shift in
demand that will actually fuel that growth. According to the latest reports by the Intergovernmental Panel on Climate Change, the main areas of demand are the power generation, industrial processes, and transport sectors. Accounting for a whopping 71% of all carbon dioxide emissions, the potential and appetite to grow the hydrogen
economy is evident. In this episode, we are going to dive deeper into green hydrogen, the positive impact it can have globally along with the challenges that the industry faces and how we can solve them. Today, I'll be speaking with Bruno Roche, global head of energy transition at ABB Energy Industries along with Christelle Rouille, CEO of Hynamics, about
where we are seeing green hydrogen being used. But first, I spoke to Marc- Antoine Eyl- Mazzega, director of the energy and climate center at Ifri, French Institute for International Relations, about what hydrogen is and why it might be the solution for the energy sector.
In today's world, there is some significant hydrogen production mainly at refineries, oil and petrochemical plants. In the refinery segment, the hydrogen is produced from natural gas or coal and is being incorporated into fuels, so as to clean them up. In the petrochemical sector, the hydrogen is used to produce fertilizers such as ammonia, which are then used to grow crops all across the world. So we are facing
here a double issue. One is to decarbonize the current users for hydrogen and the current supply of hydrogen, and that is already quite a significant challenge. And then we are talking about ramping up the use and production of clean hydrogen as a energy vector. That is something that is produced from other fuels, notably natural gas combined with carbon
capture and storage or low- carbon electricity. And then to deploy this hydrogen into new users such as in the energy sector or in the industry sector in order to complement electrification and to really enable the deep decarbonization of our energy systems on the one hand and, of course, the industries on the other hand.
Brilliant. You have hit the nail on the head there because the thing that we really want to focus on is green hydrogen. So what exactly is green hydrogen?
Well, when we talk about green hydrogen, we talk about hydrogen that is produced from basically electricity coming from renewable sources that is wind, solar, but it can also be from hydro and potentially it can also be from nuclear. But in that case, it won't be called green. Green
really focuses on the wind and solar electricity. So this electricity is passed through an electrolyzer where it breaks water molecules and as a result, you have basically hydrogen, which can be called green hydrogen.
Interesting, interesting. I suppose, if we target down on the use of hydrogen as a solution when it comes to, I suppose, the energy sector, why is hydrogen better than what we've got at the moment?
When considering the future of clean or say, green hydrogen in our energy or industrial systems, I think the key issue is to really understand that this is a critical complement to electrification and that it is not a magic solution. The priority is and will always be electrification. There is a huge range of progress we have to achieve in this field. So using clean electricity, low- carbon electricity to power
industries, to power mobility, to power residential heat. But then comes hydrogen, and hydrogen goes there and is meant to go there where low- carbon electricity cannot deliver all its potential in what we call so- called hard- to- abate sectors. So electricity can deliver a lot, but it cannot do everything. This is exactly then when hydrogen should come in.
But if we look at the world as it is now, where is hydrogen being utilized right now?
In today's world, hydrogen production takes place basically everywhere where there are large refineries or large petrochemical production, and also needs for where there is large fertilizer demand. So basically, we're talking about the Middle East, China, Northern America, and Europe mainly.
Hydrogen itself is not easy to store, is it?
No, it's challenging to store hydrogen. You can store it in various forms. You can transport it in various forms. It can be gaseous. It can be liquid, can be compressed. But the key thing that... It comes all with costs and constraints. If you have to compress the hydrogen at say 70 bars, it requires a lot of electricity. So there's a lot of challenges that are related to
that. Technically, one can do several things of course now. But then the question is really the economics and the end usages, and what is exactly the purpose of the hydrogen that is going to be produced, and whether the production location is close to the end consumption or whether one needs to plant for larger transportation leg. But in principle, one can store it also in the depleted salted caverns.
I think it'll be planet changing. Not to be dramatic, but I think it's got such huge potential. But my question to you is why aren't we seeing hydrogen everywhere right now, if it's so good?
We don't see a lot of clean hydrogen production currently. Actually, there is only very, very, very tiny production of green or clean hydrogen because it requires a lot of electricity. It requires large scale electrolyzers, and it requires demand. That hydrogen is of course much more expensive than the hydrogen that is typically produced from coal or from natural
gas. Of course, one could argue that gas- based hydrogen is becoming more expensive, hence the green hydrogen is more competitive. But on the hand, the electricity prices have gone up. So for an electrolyzer to be economically viable, well, one would need to build massive large scale gigawatt capacities of electrolyzers to really the synergies, to get the production in
series in various factories, to bring costs down. One would need the permitting for these facilities to be much easier in order to reduce costs. Of course, one would need many running hours of these electrolyzers that is not just two or three hours per day when there is sun, wind, but actually many, many hours up to 24 to make sure that the quite important CapEx is then amortized
on a high hourly utilization rate. Lastly, of course, what it needs is demand and the demand will come when the production cost and the utilization costs go down. In order to have that demand to build up, well, there will be
measures of public support. For example, government's taking over the difference in cost between the current gray hydrogen, which is fossil- based and the clean green hydrogen of tomorrow and saying, " Okay, there is a gap, and I will cover that gap for a given time in order to help the ramp up of that critical industry because it matters for the economization because it matters for my industry policy, and
I want to make sure it happens in my country."
So when it comes to one way of making hydrogen, you have to utilize electricity to make that hydrogen, but then the use of that hydrogen in essence replaces electricity in some of the ways it's being used at the moment. So my question to you is what are the benefits of having that middle step of using hydrogen?
Well, hydrogen production will come with many advantages. It will be an opportunity to use very low- cost abundant electricity when there is a lot of wind production, when there is a lot of solar production and actually not enough demand to absorb all that. It will be extremely beneficial to then put on the electrolyzers, make them work and absorb all that relatively cheap and abundant electricity when it's
available. The second aspect is certainly that the electricity cannot produce all the very high- temperature heat that one needs. It can do quite a lot, but not everything and here, will be very useful to have the hydrogen in order to produce that heat.
There is no doubt that hydrogen is set to play an important part in reaching the global net- zero target by 2050. However, as Mark touched on, there are challenges that the industry faces. Mainstream adoption and a sustainable hydrogen market is just not viable until the cost of production comes down. Until then, the world just will not be able to afford this potentially game- changing low- carbon solution.
But can ABB's technologies help with that? Well, I spoke to Bruno Roche, global head of energy transition at ABB Energy Industries about these challenges and what the solution may be.
I will start with safety. I think we should never underestimate the importance of safety, especially when we have this hydrogen with high pressure. The second I will mention is the demand. What I mean by that, you need to have a demand to justify a supply and a supply that can justify
the demand. But the obvious challenge, which is probably the most important for us in the industry and the operator is the cost, because that's what will really allow a full deployment of hydrogen. The good news is that we have the answer. We have the answer. Technically, we are making very positive impact on the cost, and all the stakeholders are working hard to bring down the cost for building this hydrogen
production facility and also operating hydrogen facilities. My message to you today is that you could imagine, and we have done that for traditional market, we are focusing and working to reduce the capital expenditure, but for hydrogen it includes
also a big part of the operational expenditure. Just to put this into perspective, when you produce 1 kilogram of hydrogen today when you use electrolysis, so electricity to split the water molecule in hydrogen and oxygen, more than 70% of the cost comes from the electricity, and we know how volatile
the electricity is. So the first challenge we are working on is to make sure that the cost will be brought down and this OpEx, as we say, is a focus number one to make the total cost of ownership of hydrogen to the levels that will allow a full deployment.
When it comes to hydrogen, what is its role in the global energy transition?
That's a very wide question Fran, and I will answer on what I focus. I don't say I have the solution, but I will tell you the four main pillar I'm focusing on. The first one is about carbon capture. So we really want to decarbonize. The second is hydrogen. The two together can form a third that is alternative fuels. So I collect the carbon, I use green hydrogen, I produce
new fuels. The fourth that I'm working on is about this recycling economy. That forms four pillar that I don't say are all... because energy transition it's super, super large. But these four ones are really embracing most of what we have to change in the future. Guess what? Hydrogen is a very important start and trigger for everything else
to happen. So in my strategy, I put it first because we can only engage at the right costs with the right safety. That will make all a difference for the whole value chain round of energy transition to become a reality.
Understood. So there are solutions on the way, but what are ABB doing specifically to help with these solutions?
We have been focusing on reducing the cost to put a plant, a production plan up and running. So this is this capital expenditure costs. But what we are doing differently in ABB, it's thanks to the experience we have of spending time on the operation. So when the line operates... So this is down the line, this is two years,
three years down the line before a project start. We are simulating the operations in order to optimize the cost, this 70% or more than this that I was referring to. So this is what we have done. We call it OPTIMAX, so optimization and maximization of production. Thanks to this we have been able to reduce or demonstrate we can reduce up to 14% in some cases of the total cost
of hydrogen. So this is the main focus that we have been doing on top of, let's say, our traditional focuses that are known in the industry.
Yeah, I suppose it's one thing looking at the optimization of the hydrogen production, but I suppose another area could be looking at the integration of more renewables. But how do you maintain that reliable power supply?
That's another really good question because we speak about this, what the European Commission will call low- carbon hydrogen or more commonly, we call it green hydrogen. But this is coming from a process using electrons. If these electrons are green or low- carbon, this makes sense to make a green hydrogen, low- carbon hydrogen. But it's exactly what you
said. This comes from the renewables. So that will be solar, that will be wind mostly that are in full deployment. But if you think about it, these are intermittent energy. Your point about making this reliable come with two point. The first thing, when we connect to the grid... And this is what you will see mostly in Europe. On top of connecting to the renewables, we also connect to
the grid. When you do that in quite significant size project, so 10, 20 megawatt, 100 megawatt and more, the pollution, if I can say, that you could put back to the grid is critical for its stability. So we have all what it takes to prepare this to do the engineering studies, and this is quite important technical consideration, but we can make it. But now, I will turn the technical challenge into
more commercial incentive. I explained, let's pretend that we are in another part of the world where we have wind, when we have solar at will. So we could say, " Yeah, that will be independent. We fully rely on renewable." And we can set the project to do that. But this comes with such sizes because after, there will be
the transport or we speak projects of gigawatt scale. Gigawatt scale, we are already at the range of a nuclear plant, to give a perspective. Then governments whose task is to develop this new energy is also looking how to maintain, how to sustain, how to ensure that the grid
will be stable. Guess what happen, in such size of project, we can turn the challenge to link to the grid and make sure that we don't pollute it or disrupt it into loading and offloading it at will. In other words, we really turn this hydrogen large project as enabler to balance the grid, and this is looked at government more and more as another and a new way of benefiting from this hydrogen economy that is thriving.
There seems to be so many avenues it can go down. So how far can we expect to scale up hydrogen realistically? Let's say, I don't know, in the next years, decades, where will we see it?
Excellent question again. The direct answer will be the sky is the limit. I'm not kidding. This is really what happens. I will put that into numbers for you to understand what I mean about the pace of the scale- up, which is insane. Four years back, we were speaking about kilowatt scale. Three years back, first megawatt scale. Two years back, tens of megawatt. Last year, 100 of megawatt, and
now we are seating at several gigawatt. This is an exponential growth, and how much it can scale up... Technically, we have what it is, and this is a good news also that we have an appetite from the economy to look for this low- carbon hydrogen. If I project myself, I will take hydrogen (inaudible) numbers. For example, they consider or they have shown that 18% of the global energy demand
is expected to come from hydrogen by 2050. 18% of the global energy demand. This is huge numbers that we are speaking about here, and we are really realistically putting this line in operation step by step. But the step that we are each time, very important. We also have to do this in a safe and realistic manner. To your question, the sky is a limit. We can go super
high. The time to do it is required to do the things properly and don't think that we stay still, and we do that taking our time. We also take risks. We are investing with the digital twin, we are partnering with OEM players. I'll take the example of hydrogen
optimize. It's in ABB, one of the company with the disrupting technologies that may come in some years from now, but where we have invested for them to develop 100 of megawatt per modules. So when we turn to gigawatt scale project, if you start with few megawatt modules, you need hundreds or thousands of them. This start not to
be realistic. So we have to think about the next generation of this project, and we try from our side to really accelerate the innovation in order to make it happen.
To deliver competitive low- carbon hydrogen, the performance of the electrolysis process, so that's the one that uses electricity to split water into hydrogen and oxygen, needs to be optimized so it
can run the plant at the lowest possible price. OPTIMAX software system supports doing just this by serving every aspect of the hydrogen plant lifecycle from simulation, design, and engineering phases to real- time visibility and monitoring of energy consumption when it's actually in operation. ABB works with industry pioneers to optimize the efficiency of these really energy intensive electrolyzers
to help reduce hydrogen production costs. One of these pioneers is EDF subsidiary group Hynamics and their CEO, Christelle Rouille, told me about the work Hynamics do with ABB.
To be part of the decarbonization of the economy and to be part of building a great and cleaner planet for our children is really the most exciting thing that I have in my life.
I've heard that Hynamics have collaborated with ABB. Could you explain a little bit about what this collaboration involved?
Yeah, sure. We are really very happy for the signature with ABB and about this agreement to integrate the ABB ability OPTIMAX energy management system to reduce H₂ production costs. The system is, in fact, deployed at Hynamics production assets in Auxerre, which called Oxygen, which is a low- carbon H₂ production and distribution assets where we will supply hydrogen to different vehicles
as buses. Maybe to be more consistent and detailed on that topic, I would say that the system provides data which can help determine optimal energy consumption levels required to produce hydrogen and minimize waste.
Gotcha. When it comes to OPTIMAX, how does it do this? How does it reduce the cost of hydrogen production? Is it a case of looking at getting maximum efficiency of each part of the process, or could you break that down for me a bit?
Yes. OPTIMAX is the tool that will have different data in order to be able to optimize the signal coming from the electricity sourcing and the signal of the consumption from the customers. This energy management system in a whole will be able to adapt the compartment, I would say, or the behavior of the electrolyzer because of these different data analysis.
That's brilliant. So it basically looks at what the demand is doing and then make sure that the supply that it's drawing from the electricity to then produce the hydrogen matches the demand that is needed for the hydrogen that needs to be made?
Yeah, sure. It is really the purpose and the brilliant idea of this tool.
So you are not producing any in excess, but you are producing it when it's needed?
And we're producing at the best cost in order, at least, to be able to be very competitive for this hydrogen price to our customers because the competition with the fossil hydrogen is still strong. It's very important for us to be able to replace that fossil hydrogen because of this optimization between electricity and consumption.
Could you explain a little bit about what makes green hydrogen better than the other forms of energy or fuel?
Yeah, sure. low- carbon and green hydrogen is the solution we want to put in place because producing hydrogen with or by electrolysis is a way to reduce the CO₂ emission and at least to decarbonate the whole economy. It is a good solution and of course better than the existing one, which is a fossil hydrogen right now, which is 95% of the hydrogen worldwide.
Now, producing hydrogen by electrolysis, I don't think is a cheap process even at the moment when it's using these carbon based fuels. So changing that process of where you can produce hydrogen but you do it by using renewables, there's going to be cost involved, isn't there? Cost is going to be a huge part of this process. So what is being done in your expertise to keep the cost as low as it can be?
It is challenging to produce hydrogen with that kind of technology electrolysis where, as you mentioned, we need renewable and/ or low- carbon electricity. Right now, the cost of electricity is very important. In the cost of hydrogen, it's almost 50 to 70% at the end. So it's very important to be able to optimize the electricity sourcing compared to the H₂ conception that our customers need for supplying their
process or the different vehicles. That's also why we had this agreement with ABB because this OPTIMAX solution is really a very good solution in order for us to reduce the cost of hydrogen production when we are facing this electricity prices and for instance, the crisis that we are facing now in Europe.
So it's on the way? Would you care to give a yes? So in the next decade will we see the rise of clean hydrogen, do you think?
It's not science fiction anymore. It's real. It's now. We developed and commissioned that kind of project. So that means that we are in the situation to provide, to supply this new energy vector to our customers. So no, it's really the future, but it's not the science fiction or
an idea coming from R&; D sector. No, no. It's really real, and we are very happy to take part of that business and to take part of this new generation of producing energy sector.
The more efficient we can make that decarbonization of the hydrogen production process, it's only going to get taken up more and more, and so it's just going to basically fuel its own future?
Yes. The two main challenges in order to have a democratic cool hydrogen or clean hydrogen is to reduce the cost of electrolyzers. That's possible with the Gigafactories that all the different electrolyzers manufacturers are building worldwide. So it's one way to be competitive and to get that hydrogen real. The other thing is to have the most adequate regulation context,
I will say. For that, we will be very happy to have an acceleration coming from the European Union, but also from the different states in Europe. But the political situation is that there are many, many billions of euros put on the table in order to subsidize, I would say, those project and to be able to produce low- carbon and renewable hydrogen.
What I've loved about this episode is the way that it's opened my eyes up to how hydrogen is just going to be one of the options in this pick and mix suite that we need to utilize in the most optimal way in order to have this net- zero carbon future. That is it for this episode and also for
this series of the Process Automation Podcast. A huge thank you to my guests on this episode, Bruno Roche, Marc- Antoine Eyl- Mazzega and Christelle Rouille for their brilliant insight and expertise. Thank you so much. I'm Fran Scott, and the Process Automation Podcast is a Fresh Air production for ABB. Follow or subscribe now for free wherever you get your podcasts, so you never miss an episode.