With the growing focus on decarbonisation across the global energy industry, LNG and hydrogen will continue to play a pivotal role in the future energy mix. On 29 June, the SIEW Energy Insights Webinar, held in partnership with S&P Global Platts, brought together expert speakers to discuss how LNG and hydrogen can support the transformation of the energy system.
Dexter Wang, Asia Market Engagement Lead at S&P Global Platts, kicked off the webinar by presenting new insights from the report, “The Hydrogen Economy: Can Natural Gas and Hydrogen have a symbiotic relationship?”. He discussed how the COVID-19 pandemic has altered the energy transition outlook—and the new market dynamics to impact the role of natural gas as a transition fuel.
Mr Wang noted that the role of natural gas as a "bridge fuel is getting shorter and narrower", with green policies pushing for more renewables or hydrogen. At the same time, LNG’s development as an alternative bunker fuel, the growth in associated gas supply from oil production, and its displacement of coal in power generation, are important factors that will continue opening opportunities for natural gas.
Dr Peter Zeniewski, Lead Gas Analyst, World Energy Outlook, at the International Energy Agency (IEA), followed by discussing the outlook for natural gas and hydrogen in the IEA's climate scenario. A highlight from his presentation was examining how hydrogen may see broad-based growth in a net-zero pathway—with hydrogen production expected to increase six-fold by 2050, driven by water electrolysis and natural gas with carbon capture, utilisation and storage (CCUS) technologies.
“In parallel to the growth in production, there's a huge decarbonisation of the hydrogen supply production," said Dr Zeniewski, who further noted that supporting policies will be vital for the hydrogen economy to be almost entirely based on low carbon technologies by 2050.
How LNG and hydrogen will support the global energy transition
In the transition to a low carbon economy, how will hydrogen impact the role of LNG in the future energy landscape? In an audience poll conducted during the webinar, more than half (59%) of the respondents believe hydrogen is likely to grow alongside LNG—and that the two will coexist as low carbon alternatives.
The evolving role of LNG and hydrogen was debated in a lively panel discussion, with the IEA’s Dr Zeniewski joined by Fabian Kor, Group Head, Strategy & Corporate Development at Pavilion Energy, and Tim Karlsson, Executive Director at the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE).
Mr Kor of Pavilion Energy outlined the future pathway for LNG: “In order to compete, LNG needs to be decarbonised, using the tools and technologies available today to make it a relevant transition fuel.”
Besides the use of technology, Mr Kor further suggested that carbon offsets could also help to mitigate emissions. He added that for hydrogen to compete at scale, "it will boil down to economics, and considering how to ramp up production and bring down costs for hydrogen to be competitive enough as a low carbon fuel."
IPHE’s Mr Karlsson highlighted that while hydrogen still faces challenges in terms of large-scale facility production, recent proofs of concepts have brought it closer to use cases demanded by the market.
Mr Karlsson also shared his perspective on the policies and frameworks required to fast-track hydrogen developments: “There’s a role for government support and mechanisms to drive innovations and hydrogen R&D efforts. The next step is the regulatory frameworks that need to be in place to drive strong policies. And the third will be infrastructure investments that align the production of hydrogen with electrolyser capacity and natural gas with CCUS.”
Highlighting the significant role played by policymakers, Dr Zeniewski added: “It is not as easy for hydrogen to thrive compared to solar and wind energy, which you can more easily deploy at scale. For hydrogen, there is a long and complex supply chain and a lot of uncertainties about how this can be scaled up.”
Scaling up LNG and hydrogen in the energy mix
In the second panel discussion, panellists Vincent Demoury, Secretary General at the International Group of Liquefied Natural Gas Importers (GIIGNL), Mario Franchin, Senior Vice President Commercial Global Solution at Snam, and Vicente Pinto, Investment Commissioner for Asia at InvestChile, discussed the opportunities and challenges of scaling up LNG and hydrogen.
The lack of dedicated transport infrastructure is one of the key barriers to driving hydrogen uptake. Addressing this issue, Mr Franchin of Snam pointed out that the existing natural gas infrastructure can play an extremely important role in scaling up hydrogen developments.
“Currently, the most competitive way would be to make use of the existing infrastructure, and there are already use cases in Italy for transporting hydrogen blended with natural gas. As the demand for hydrogen increases, we will also be able to scale up the technology," Mr Franchin said.
Mr Demoury of GIIGNL concurred that it would be pivotal to continue using the existing gas infrastructure to help ensure clean, affordable energy supply in a world still recovering from the impact of COVID-19. Highlighting the synergy between the two gaseous fuels, Mr Demoury emphasised the importance of adopting both LNG and hydrogen-based solutions in the pursuit of cleaner energy sources.
“We need to continue cleaning up and offsetting emissions across the LNG supply chain. We see a strong future for LNG as a fuel, and more new technologies will become available to support the development of both LNG and hydrogen-based fuels,” Mr Demoury added.
InvestChile’s Mr Pinto noted that business use cases for hydrogen are just starting to gain traction—and LNG will remain one of the important pathways to decarbonisation. He further cited Chile’s commitment to lowering emissions and its burgeoning renewables boom as key enablers to scaling up the hydrogen economy.
Mr Pinto said: “If we look at our experience developing renewables; there was not a single solar panel in Chile 10 years ago. Today, we are steadily increasing our renewables production capacity. And that will become really relevant for green hydrogen production.”
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