“Beyond hydrogen” – How digital solutions help energy companies achieve short and long-term sustainabilityJan 11, 2022 by Energy Connects
The energy transition, coupled with a global drive for sustainability in energy, chemical and related industries, is already impacting the economy and all players across the energy value chain. These geopolitical forces are already spawning new entrants and will create winners and losers across these industries over the next ten years.
Renewable energy sources such as wind, solar, and geothermal power generation are of unequal potential geographically. Many parts of Asia are challenged by limited access to locations that can generate substantial solar or wind power. Whereas advantaged locations such as Indonesia and Iceland have abundant geothermal potential. In addition, some industrial applications are hard to decarbonize, such as air and ocean transport and steel manufacture. What’s more, electrification of vehicles and other applications will create a large future demand for metals processing, especially the so-called rare earths, which has an uncertain lifecycle carbon impact and also a concentrated supply chain.
Enter hydrogen which offers the opportunity to fill a significant fraction of the world’s need for energy and can be generated carbon-free. However, hydrogen also presents several challenges, especially with respect to safety and infrastructure challenges of storage, transport, cost of electrolysis generation, sources and availability of renewable electricity for electrolysis, cost and efficiency of carbon capture (in the case of blue hydrogen) and end-use safety.
Despite these challenges, the hydrogen economy is seeing strong momentum reflected in a continuing wave of announced capital projects that aim to deliver hydrogen generation and storage at scale. In fact, several regions are investigating the feasibility of a hydrogen economy as a significant zero-carbon alternative.
Digital technology will be an essential component in delivering the hydrogen economy, accelerating and de-risking innovation, de-risking adoption and enabling faster and better scale-up and optimisation of the hydrogen value chain. It will be fundamental in overcoming many value chain obstacles, maximising commercialisation, design and supply chains, and boosting production and economics.
The role of digital technology in the hydrogen economy
Simply put, software technology will be a strategic asset as the industry seeks to successfully navigate the energy transition. In the case of the hydrogen economy, digital technology will be a major accelerator for driving down the cost of hydrogen, evaluating and optimising many value chain alternatives and removing constraints to safely scale the value chain.
Drilling down further, here’s how today’s digital technologies can expedite the transition to hydrogen, impacting key functional areas:
Employing advanced methods for innovation and optioneering, while driving down costs.
Rigorous process simulation software can represent hydrogen electrolysis, hydrogen reformer processes, other innovative hydrogen synthesis approaches and hydrogen liquefaction and pipeline transport—accelerating commercialisation and improving access to capital1
Several specific digital technology opportunities to accelerate innovation include:
- Hybrid models incorporating Artificial Intelligence (AI) together with first principles models for new processes, including membrane technology, combining reforming, carbon capture and novel processes
- Rate-based simulation modeling for carbon capture
- Powerful, rigorous models to handle electrochemistry
- High-performance computing for evaluating thousands of alternatives in an optioneering context
- Integrated economics to rapidly screen techno-economic alternatives during concept design and pilot plant testing.
Integrating collaborative engineering workflows - Cross-functional teams (within and across organizations) will be able to rapidly select concepts, scale-up designs, execute projects and use modular design to accelerate industrial implementation. This will drive down project timetables 50 percent or more2
Facilitating advanced, integrated supply chain planning. New software advances optimally integrate the hydrogen economy value chain with existing natural gas and power networks
Automating processes to create the self-optimizing plant paradigm. New technologies such as hydrogen electrolysis, carbon capture, crude to chemicals and industrial scale fuel cells to be deployed as autonomously as possible to compensate for shortages of highly skilled operators3
Optimising the value chain with risk and availability modelling. Use new capabilities to evaluate hydrogen production, transportation, storage and end-use options as well as the risks to achieve reliable energy goals.
For both hydrogen electrolysis and fuel cells, the ability to simulate electrochemistry, handle dynamics and consider stochastic variation are all crucial. Advanced modelling and digital twin solutions have played a prominent role in the hydrogen generation research and development arena for the past 30 years.
Solution: Digitalisation Across the Value Chain
As the industry transitions to hydrogen, it’s vital that companies look for asset optimisation software that extends across the entire value chain, addressing the key areas of production, distribution and storage and usage.
This kind of technology will be key in assisting companies as they explore all avenues of the hydrogen economy including choosing between different energy choices given all the different variables they may have to consider around regional energy options, industrial players and government policies. They will be crucial also in supporting the adoption of innovative new technologies from green hydrogen electrolysis to carbon capture, or process models from integrated economic and cost modelling, energy efficiency optimisation and risk modelling workflows.
Beyond Hydrogen: Short- and long-term sustainability
The energy industry today is facing a number of challenges—the need to drive to net-zero carbon, macroeconomics impacting global demand for hydrocarbons and an energy transition that’s gaining momentum and building demand for renewable electricity and zero-carbon mobility solutions.
At the World Economic Forum’s Davos Agenda in January 2021, Bill Gates talked about the need to create a trusted global carbon market, which will spur the need to shift very large capital investments into low carbon areas. He talked specifically about the hydrogen economy, carbon capture and energy storage, as well as Green Premiums and driving the economics of new technologies through scaling and investment. At ADIPEC 2021, in mid November, Thyssen Krupp CEO, Sami Pelkonen projected that by 2030 green hydrogen would be cost compatible with blue hydrogen. However, IHS Markit Vice Chairman, Daniel Yergin, countered that that the limiting factor might be the supply constraint of “green molecules.” Yergin predicts that the global demand for oil and gas will continue to grow well into the 2030s.
Consequently, this is not happening fast enough for many advocates, and political pressure will continue to grow. There are unique and differentiated technologies available today with respect to innovating, scaling and achieving competitive advantage in the hydrogen economy, biofuels and other energy transition strategies. There is significant opportunity now for companies to accelerate the time-to-value for the hydrogen economy, carbon capture and biofuels by leveraging today’s digital solutions that help ensure faster adoption, scale and competitive advantage. Those that do so will be well placed to claim a leading role as the hydrogen economy plays out.