By Håvard Solheim

The last two weeks have proven how priorities have shifted, and how the Green Transition journey is being accelerated due to the increased demand of low-emission energy in Europe.

First, EU announced the more ambitious plan: A Hydrogen Strategy for a Climate-neutral Europe.
Next, the Prime Minister of Norway, Erna Solberg, announced an ambitious Hydrogen Strategy for Norway.
Then, the biggest PE fund in Norway, HitecVision, announced a new USD 3 billion investment fund targeting renewable energy projects.
And finally, the annual Pareto energy conference in Oslo was all about renewable energy instead of oil & gas.

The last two examples illustrate exactly how important it is to demonstrate that action is taken to reduce emissions, in order to secure capital.

In this context, Carbon Capture and Storage (CCS) and its importance for Hydrogen becomes increasingly relevant. Here are some numbers to explain why:

The hydrogen colour palette

First of all, hydrogen is defined as a colour palette to reflect the environmental impact of the creation process, with green and blue hydrogen as the main focus.

Green hydrogen is the most environmentally friendly. It is created via electrolysis of water where molecules are split into H2 and O2 using power from renewable energy with no emissions, such as offshore wind or solar.

Blue hydrogen is created by reforming natural gas using water steam into H2 and CO2. This becomes low carbon if coupled with a functional CCS option for storing CO2 generated in the process.

The numbers: Hydrogen demand and emissions

Forecasts from the European Hydrogen Council and IRENA suggest a hydrogen demand of 78 Exa Joules (EJ), with 19 EJ from green hydrogen and almost 60 EJ from blue hydrogen for Europe in 2050.

Using the relation of 7 kg CO2 per produced 1 kg of blue hydrogen, for the transformation of natural gas using steam (Soltani et al. 2014), this ambition requires a production of 487.5 Million tonnes of blue hydrogen, which would generate up to 3 412.5 Million tonnes of CO2 emissions. For comparison, it is estimated that 15-20 million tonnes of CO2 can be stored within the Johansen Fm reservoir used in the Northern Lights, now Longship, project.

CCS as a key solution

The calculations above highlight the importance of CO2 storage availability, and the need of focusing on CCS as a global project. CO2 storage is the key part in making blue hydrogen low carbon and sustainable, in relation to providing the required low-carbon energy to Europe.

Good news: The capacity exists

Large volumes of reservoir capacity needed for CO2 storage can be found offshore in the Norwegian underground. Below you find an example of CO2 storage we have identified within in structural closures in the core of the Norwegian North Sea at the Oligocene Skade Fm level in near proximity to fields and developments like Solveig, Sleipner, Gina Krog and Edvard Grieg. Each of the structural closures would require an expensive well, at the cost of several hundreds of millions of Norwegian Kroner - so a connected solution is required for a viable business case for this area.

Identified CO2 Storage Capacity with good reservoir and good seal at Skade Fm, with structural closure defined within study area. The Storage Capacity has been defined in a depth domain, thanks to the help from Estimages.

The Oligocene Skade Fm is not the only stratigraphic level where CO2 can be stored, and closely nearby CO2 from the Sleipner Field has been injected into the Utsira Fm since 1996.

Detailed quantification

Provided that blue hydrogen is selected as a future strategy by Norwegian Energy Companies, detailed quantification of CO2 storage close to existing producing assets is relevant for building the business cases required to form basis for any decision to move into this market of pioneer projects in CO2 storage.

Our ambition is to provide a database of ranked CO2 storage capacity, where it is possible to rank on the following parameters: infrastructure name, distance to infrastructure, depth to CO2 storage, expected temperature, expected pressure, volumes of CO2 at reservoir conditions and volumes of CO2 at surface conditions.

To highlight the urgent need of an accelerated growth in CCS, the Northern Lights project (now named Longship) is estimated to store 1.5 Million tonnes of CO2 per year for Phase 1. This is equivalent to 0.043% of the expected CO2 emissions from blue hydrogen generation alone in 2050, based on the current forecast.

Today, there are no sustainable economic business models for blue or green hydrogen, but it is likely that regulations and subsidies will be in place in the coming years in order to motivate companies to take this path and provide low-carbon energy to Europe.

And the investors are interested

This was confirmed in August, when the newly registered Aker Carbon Capture was listed on the Merkur market of Oslo Stock Exchange:

The company secured new fresh investments of 500 million NOK, corresponding to ca. USD 53 million. The 26th of August valuation of the new company based on the value of the share price traded on Merkur (up with 170%) was 2.62 billion NOK [source: e24.no], corresponding to USD 280 million, hence reflecting the available ESG capital in the market searching for good investment opportunities.

New Hydrogen Strategies demonstrate an urgent need for more CO2 storage capacity