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Repsol repositions for green hydrogen

The Spanish refiner will build a €60mn pilot plant to make synthetic fuels as it strives to meet its 2050 decarbonisation pledge

Repsol is building a pilot green hydrogen plant to make synthetic fuels that could ultimately help the Spanish energy firm achieve its target of net-zero emissions by 2050, a senior executive tells ­Petroleum Economist.

Originally a refiner, over the past few decades Repsol has expanded into oil and renewable energy production, and in December made its decarbonisation pledge. The €60mn pilot plant, which will be built at the Port of Bilbao close to a Repsol refinery there, will use electrolysis to split water into hydrogen and oxygen. It will rely on a combination of wind and solar energy to power the process.

“Using renewables in this project is critical,” says Jaime Martin Juez, Repsol’s executive director of technology and corporate venturing, noting that to be economically viable the plant requires electricity that costs no more than €30/MWh; the levelised cost of electricity derived from solar and wind fell to $50/MWh and $44/MWh respectively in the second half of 2019, and prices are lower than that in many countries, according to a report by research ­company ­BloombergNEF.

In terms of total costs for the Bilbao project, electrolysis materials will account for 18pc, electricity 77pc and operation and maintenance 5pc.

“We do not require 24/7 electricity to operate the pilot, but if we want to demonstrate the reliability of this technology, we need continuous electricity at this price,” says Martin.

Technical challenges

The main hurdle to large-scale hydrogen manufacturing had been the lack of cheap electricity, according to Alexandr Simonov, a lecturer at Melbourne’s Monash University and lead researcher on the design and understanding of advanced materials for solar fuel synthesis.

“Now, with renewable energy prices tumbling, it is a smart move not to sell all of this electricity but to use part of it to synthesise something useful such as fuel that can then be sold at a very significant margin,” Simonov tells Petroleum Economist. “Even with a large mark-up, it would still be cheaper than fossil-based fuels.”

To make the synthetic fuels, Repsol will take CO₂ captured from the refinery’s steam reforming plant. Steam reforming accounts for 20pc of its refineries’ CO₂ emissions.

€30/MWh – Electricity cost below which Repsol’s green hydrogen plant is profitable

A technique known as reverse water gas shift will convert the CO₂ into carbon monoxide. The Fischer Tropsch process will then transform the carbon monoxide and hydrogen into several synthetic fuels such as e-jet, e-diesel, e-LPG and e-gasoline that could be substitutes for existing vehicle, shipping and aircraft fuels.

“It is uncommon for the major fossil fuel companies to actually do a project like Repsol’s—there is a lot of talk, but little action,” says Simonov.

Repsol’s Martin acknowledged the pilot plant alone, which initially will produce just 50bl of synthetic fuel a day, would not be a big contributor to achieving its carbon-neutral aim, but “as a further step towards achieving (our) target it could be important”.

“This project could be a fundamental part of our route to net zero,” says Martín. “If our synthetic fuels can be used for shipping and aviation, they will be very important to us becoming net zero.”

Martin also bristles at the suggestion the pilot could just be a complex method of greenwashing.

“This hydrogen project is one of the wisest ways to use CO₂ from carbon capture. We need to scale hydrogen,” says Martin. “There is no single solution. This is not a cosmetic project. We have a lot of people working on it. We see this as another alternative to fossil fuels. For us, it is a way to make liquid fuels with less and less carbon.”

Industrial facility

The pilot will require more than 4,000 operating hours to prove the concepts and viability of the synthetic fuels.

“If this project goes well, we will make this into a full industrial facility,” says Martin, noting the pilot plant will begin full operations in about three years. “We have to demonstrate a lot of things—we have to validate the products, the technologies and the figures.”

That process will probably take around eight years. If successful, Repsol would expand the pilot into a commercial-scale enterprise producing 500,000t/yr of products, equivalent to 11,000bl/d. That would save 2mn t of CO₂ annually.

“Maybe things will be faster—with new technology there is a lot of uncertainty. At this moment, we envisage that at the end of this decade we will try to launch a full-scale facility,” says Martin.

Such a timeline is similar to a Danish project announced in May. Seven companies including shipper AP Moller–Maersk and airline SAS have partnered to develop an industrial-scale hydrogen fuel production plant in Copenhagen. Production will start in 2023 with a 10MW ­electrolyser.

“It is uncommon for the major fossil fuel companies to actually do a project like Repsol’s—there is a lot of talk, but little action,” Simonov, Monash University

When fully operational in 2030, the plant’s electrolyser capacity will be 1.3GW, producing 250,000t of sustainable fuel annually. Like the Repsol facility, the Danish plant will make fuels for aviation, shipping and overland public transport. The partners claim it can reduce carbon emissions by 850,000t/yr, with electricity to power the plant derived from nearby wind farms.

In January 2018, a Shell-led consortium announced it would build what it touted as the world’s largest hydrogen electrolysis plant at Germany’s Rhineland refinery. Costing €20mn, the plant will have a capacity of 10MW and produce 1,300t/yr of hydrogen. Slated to begin operations this year, the consortium claims it will be the first industrial-scale test of the polymer-electrolyte membrane (PEM) electrolysis process. Unlike the Repsol and Danish projects, the hydrogen produced in the German scheme will be used in the refinery rather than to make syn­thetic ­fuels.

“This Repsol project is probably one of the most impressive in terms of scale and ambition,” says Simonov. “Other companies will see that this is not just economically viable but profitable. Instead of spending billions of dollars on mining the earth’s crust for fossil fuels, it will be much cheaper just to build solar power stations to power electrolysis through a relatively simple process.”

Uncertainties remain

Yet some uncertainties remain over the Repsol pilot. The company has still to decide the plant’s electrolysis method—the more hydrogen that will be used for synthetic fuel, the more likely Repsol will use a PEM electrolyser, which is more expensive than a conventional alkaline aqueous solution.

Alkaline-based electrolysis is a simple, centuries-old process, but is inefficient and highly corrosive. Instead, a solid PEM electrolyte uses pure water, is more efficient and can generate more hydrogen. “The problem is that such advanced electrolysers must use large amounts of expensive and rare elements like iridium,” says Simonov. “There is just not enough iridium to build these devices on a massive, terawatt scale.”

Having low-cost renewable electricity helps solve this problem.

“We can replace what is essentially an unavailable element with something that does not work quite as well and requires a bit more energy, but is much cheaper and plentiful,” Simonov adds. “In this way one can more than compensate for any energy inefficiencies this solution might have.”

Some hydrogen made at the Repsol plant could also be deployed for other purposes—something the company will decide on once production starts. Alternative uses include injecting into natural gas pipelines, long-term storage for renewables and reducing the nearby refinery’s reliance on hydrogen made from steam reforming.

“We would like to test the hydrogen for different purposes,” adds Martin. “It is wide open—there are very broad possibilities. We do not see hydrogen as only being used for a single process

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