Two offshoots of Siemens, a German tech conglomerate are pulling resources to push green technology by developing wind-to-hydrogen systems to help decarbonise the global economy but natural gas remains critical in the scheme of things.
Siemens Gamesa and Siemens Energy have joined a growing group of green hydrogen proponents, many of whom see it as the ultimate solution to the planet’s pollution problem a report from oilprice. com stated.
The two plan to invest $ 120 million over five years to develop a fully integrated offshore wind- to- hydrogen system that involves a turbine with an electrolysis system integrated into it, the companies said in a press release last week. They are aiming for a full-scale demonstration of their pilot by 2025 or 2026.
However, the cost of producing green hydrogen is still high. Green hydrogen production costs between three and six times more than gas-derived hydrogen.
Nevertheless, the prices of gas-derived hydrogen may rise as demand for gas rises, somewhat levelling the playing field. This, however, suggests that green hydrogen would depend on gas prices for its competitiveness rather than on technological advancements that would make the process itself cheaper.
This means that for all its promise, green hydrogen production is not a trouble- free technology. It is a very expensive technology that has made some experts warn it is unlikely to be economically viable for years and maybe decades to come. And yet, some are forecasting major cost drops for the technology.
Read Also: Oil majors cash in on LNG price spike in Asia and Nigerian gas is in the play
Wood Mackenzie analysts, for instance, last year wrote in a report that they expected the production costs of green hydrogen to fall by as much as 64 percent by 2040 and in some places, even sooner.
“On average, green hydrogen production costs will equal fossil fuel-based hydrogen by 2040. In some countries, such as Germany, that arrives by 2030. Given the scale-up we’ve seen so far, the 2020s is likely to be the decade of hydrogen,” Ben Gallagher, author of the report, senior research analyst wrote.
Nigeria gas, opportunity window
In the last five decades, Nigeria’s economic fortunes have been tied to the volatility in oil prices and as the world moves away from the liquid gold, natural gas is offering new, sustainable wings to Africa’s most populous country.
But the country’s capacity to develop, gather and process natural gas remains comparatively low. The Nigeria Liquefied Natural Gas (NLNG) company has 22 million tonnes per annum capacity. Train 7 would increase it to 30 million tonnes when it comes on stream, in a country with over 200 trillion cubic feet of natural reserves.
Nonetheless, Australia with 108TCF of gas reserves has 88 million tonnes capacity per annum. Malaysia has 97TCF of proven gas reserves with 29 – 30 million tonnes capacity per annum. Mozambique has about 50 – 120TCF of proven gas reserves and plans a 50 million tonnes capacity per annum.
“Thirty million tonnes per annum capacity for Nigeria is a nonstarter. It is time for gas. It is time for Nigeria to fly on the wings of gas,” Tony Attah, MD/CEO of NLNG Limited said at BusinessDay’s Energy Series 2020. “However, we must be deliberate and focused to make this happen. It is this deliberateness that is lacking and cannot be achieved in one year. It is time for gas.”
It is time for Nigeria to seize gas as a tool for economic rebound and reflation. Gas is an enabler of various sectors or industries. Gas is food. Gas is jobs. Gas is economic development. Gas is revenue. Gas is social welfare for Nigerians. Gas is the wealth of Nigerians. Gas can make Nigeria great again.
