Energy transition via ports
The agenda of energy transition and reduction of carbon footprint can bring up new port, logistics and shipbuilding projects in Russia with a focus on hydrogen exports, carbon capture and storage as well as using hydrogen for shipping.
While scientists are arguing about the real impact of CO2 emissions on the climate change and about the real cleanness of ‘zero-carbon’ fuels (the use of hydrogen actually increases NOx emissions), the locomotive of sustainable development is gaining momentum with the situation suggesting two ways: further dealing with oil, gas and coal having dropped the subject which is all the rage in the western world in the hope that the demand for conventional types of fuel will not fall, or catching this train and using its potential for the development of new industries and sectors of domestic economy. Statements of the Russian authorities and appearance of the relevant strategies show that they have opted for the second way. The reason behind that decision is a multiplicative effect of the technology and infrastructure development as part of the energy transition. A number of tasks can be addressed simultaneously including the development of energy projects in remote areas of the country where it was unprofitable before.
The idea was explained at Gaidar Forum by Anatoly Chubais, special representative of RF President for relations with international organisations to achieve sustainable development goals. It is known that ‘green hydrogen’ should be produced through application of clean sources of energy and electrolysis. In the Far East, there are areas with excellent characteristic of tide strength and insolation while in the North it is reasonable to use the winds.
The project on construction of the Penzhenskaya tidal power plant in the north-eastern part of the Shelikhov Bay in the Sea of Okhotsk. Investments into the project are estimated at $500 billion.
“If we are able to build a plant for electrolysis near the Penzhenskaya tidal power plant as well as a port for exports of hydrogen to Japan (which is to consume 3 million of hydrogen per year from 2030 with no local production facilities) it (the market – Ed.) is estimated of up to $15 billion per year”, said Anatoly Chubais. According to him, the hydrogen industry can be a breakthrough for the energy sector of the Far East and the North since it makes the construction of large power plants in the scarcely populated region reasonable.
There is also a project on construction of a tidal power plant in the Murmansk Region (Severnaya TPP).
A different project is planned in the Baltic Basin. A special economic zone of industrial type is being created in the area of Ust-Luga port. It is to comprise facilities of the gas and chemical cluster (by the way, gas-to-chemicals is yet another way to replace exports of raw materials with exports products with a high added value, which, in our opinion will be a long-term export trend). The same area can be a potential site for hydrogen production/storage/shipment infrastructure. Actually, Ust-Luga is so far considered as a site for production of so called ‘blue hydrogen’ from natural gas given its availability.
As Dmitry Yalov, Deputy Prime Minister of the Leningrad Region, said earlier: “we make provision for land reserves in view of projects on hydrogen energy, production of hydrogen in the south and in the north of the region, particularly within the special economic zone being created around the Baltic Chemical Company and RusChemAlliance in the port of Ust-Luga”.
In the future, the Leningrad Region counts on appearance of ‘green hydrogen’. “We are also in active talks with potential investors into wind farms for production of green energy needed to produce hydrogen”, added Dmitry Yalov.
"In general, according to the forecast of Anatoly Chubais, Russia will be able to export 6-10 million tonnes of hydrogen per year by 2030”
The second part of the energy transition is the capture and storage of CO2.
“Russia has a great potential for occupying a commercial niche in the global market of carbon storage quotas. We have already formed a technological chain for capturing, transportation and geological disposal of CO2”, said Aleksey Vashkevich, Technology Director, Gazprom Neft.
Indeed, there are international projects on catching and storage of carbon dioxide under the seabed. The project of Norway and Great Britain are implementing such a project in the North Sea. Meanwhile, Gazprom Neft is developing a CCS project in the Orenburg Region. It annual capacity is nearly 1.5 million tonnes per year.
“The scope of our technological reserves for such tasks is not below that of the global leaders…. The project of Norway and the Great Britain is currently being implemented in the North Sea. Injection into offshore wells is more costly than into land ones since tankers are needed for transportation. In Russia, it will be 1.5-2 times cheaper. The advantages of Russia are in efficiency and in volumes”, said Anatoly Chubais.
According to the presidential special representative, capital costs of such projects in Russia will be several times less as compared with average costs worldwide. That will let attract investors and cheap financing. So, Russian ports will probably welcome foreign tankers with CO2 bound for storage in Russia.
Shipbuilding opportunities
Energy transition suggests a new niche of shipbuilding for construction of tankers carrying liquefied hydrogen and carbon dioxide as well ships using hydrogen for propulsion.
So far, it is Japan that holds leadership. The world’s first liquefied hydrogen carrier Suiso Frontier has already left Japan for Australia where it will be first loaded with ‘brown hydrogen’ (produced through using coal). The purpose of the project is to demonstrate the capabilities of liquefied hydrogen production and its safe transportation to Japan.
To contribute to the maritime transportation of hydrogen, ClassNK published the "Guidelines for Liquefied Hydrogen Carriers" in 2017 describing the safety requirements for liquified hydrogen carriers based on IMO’s Interim Recommendations for Carriage of Liquefied Hydrogen in Bulk.
Japanese companies Kawasaki Heavy Industries, Ltd., Yanmar Power Technology Co., Ltd. and Japan Engine Corporation established a consortium of marine engine manufacturers for a joint development of world-leading marine hydrogen-fueled engines for ocean-going and coastal ships with a purpose to hold leadership in this segment.
In Russia, Krylov State Research Center is going to develop the first ship fueled by hydrogen by 2024. According to Igor Landgraf, Deputy Director of TSNII SET hydrogen energy department (affiliated branch of KSRC), it will be a small leisure and sightseeing ship. The work will be held under the umbrella of the Ministry of Industry and Trade.
Interest to construction of ships powered by hydrogen was also expressed by United Shipbuilding Corporation.
Thus, energy transition lets occupy free niches in logistics, shipping and shipbuilding. It is crucial not to lag behind and not to give foreign competitors complete control over them.
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