The fuel is well suited to the majors’ strengths in project management and their deep pockets.
After years of dabbling, major oil companies are finally planning the kind of large-scale investments that would make green hydrogen a serious business.
They’re chasing a very particular vision of a low-carbon future — multibillion dollar developments that generate vast concentrations of renewable electricity and convert it into chemicals or clean fuels that can be shipped around the world to power trucks, ships or even airplanes.
“The oil majors have been building multibillion-dollar projects since forever,” said Julien Rolland, head of power and renewables at commodities trader Trafigura Group Pte Ltd. “This green hydrogen, green ammonia stuff will be the new energy industry.”
The plan is well suited to the companies’ natural strengths in project management and their financial heft, but even with those advantages they’re still making a big bet on an unproven technology that could fall short of its potential.
“I don’t think any company out there has developed anything to these kinds of scales,” said Gero Farruggio, head of Australia and global renewables at consultant Rystad A/S.
This month has seen a flurry of big news about hydrogen.
BP Plc is taking the lead in the $36 billion Asian Renewable Energy Hub, a project that aims to install 26 gigawatts of solar and wind farms over a vast 6,500-square-kilometer (2,500 square-mile) stretch of Western Australia’s Pilbara region, and use the electricity generated to split water molecules into hydrogen and oxygen. Once fully developed, each year it would produce about 1.6 million tons of green hydrogen or 9 million tons of ammonia, which can be used to make fertilizer.