The world has changed a lot in the past 20 years. Not least because there’s now a broad societal call to decarbonize. The planet needs us to act now and we’re seeing a lot of momentum from governments to support hydrogen. In the UK, for example, the government is targeting five gigawatts of hydrogen by 2030. We’re at the early stages of developing H2Teesside, that one project could meet 20% of that target.
It’s a project in the UK where we’re going to produce blue hydrogen – which is made from natural gas – to support the decarbonization of heavy industry in Teesside, in North East England. The carbon dioxide (CO2) in the gas will be separated, captured and stored. We are working with Tees Valley Combined Authority to explore the potential for green hydrogen in the region, including the development of Teesside as the UK’s first hydrogen transport hub, as announced by the Department for Transport in September 2020.
We are looking at both blue hydrogen and green hydrogen. We believe both have a role to play in decarbonization. It’s not one versus the other, but deciding where it makes most sense to deploy each technology. It’s about picking the best solution for the area that can, over time, scale at the lowest possible cost.
This isn’t about sustaining our gas production. The UK currently consumes 70 times as much gas as we could use at H2Teesside.
We’re focusing on two demand sectors: the industrial sector, where there are activities too costly or difficult to electrify; and the transportation sector, like heavy duty trucks, which travel long distances and are out on the road for long periods.
We think hydrogen is going to be an important part of the energy transition – anywhere between 5-15% of global energy demand, which is about the same as natural gas today. So, there’s a significant opportunity there. It’s our plan to capture about 10% of that market in our core areas by 2030.
We’re focusing on areas where we think switching to electricity will be difficult and where we already have an advantage. For example, we can look at the location of our refineries, many of which are already using hydrogen themselves. In the early days, we think the hydrogen market is going to develop very locally.
So, we’re looking at parts of the world where we already have teams in place, such as the UK, Germany, Spain and the Netherlands. We’re also focused on Australia and looking at the US. But this is a very dynamic market; my team is set up to respond as we see the opportunity.
I’d say there are two main challenges. One is business models. It’s too early to see clean hydrogen playing a role in everyday energy demand today, mainly because when made into fuel for example, it currently costs more to produce at scale than other fuels. So, we are working together with stakeholders, including governments, to create the business models and support the regime required to sustain a clean hydrogen market.
Technology is the second challenge. Lots of the tech we need is used today, but now it’s about scaling it up if we’re going to make a real difference. That scale is particularly important in green hydrogen, which is made using renewable energy and water electrolysis. Today, the largest electrolyzer operating is 20 megawatts, so we have a long way to go to get into the gigawatts. The good news is there is a lot of momentum in developing and scaling up technology for hydrogen.
I’m a reflection of the fact that bp has the people – on our platforms and in our refineries – who can safely deliver and operate big, complex projects. Now, I have the chance to use the skills I developed during my time in oil and gas to help bp realize its purpose to reimagine energy. I’m very excited about that. It gives me the chance to make a difference for my son. He was so excited when I told him about the job because he’d just finished learning about how to build a hydrogen fuel cell at school.
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