InterContinental Energy (ICE) was founded in 2014 to develop large-scale renewable energy projects supplying global markets. The company is now a leading dedicated developer of green hydrogen and green fuels production facilities with the vision of reducing CO2 emissions across multiple sectors, especially in those which are historically difficult to decarbonize. While the power sector accounts for 25 per cent of global emissions, agriculture, industry, and transport together generate far more and ICE believes that decarbonising these essential industries is vital, and can be done by fully unlocking the potential of green hydrogen. To this end, the company has developed a 26 GW green hydrogen hub in Western Australia and has planned over 125 GW of similar projects in the coming years. As ICE aims to tap into the potential of areas with both wind and solar resources, it has forayed into project development in the deserts in the Middle-East and North Africa.
In a recent conference conducted by Global Transmission Research and supported by REGlobal on “Green Hydrogen Middle-East”, Alicia Eastman, Managing Director of ICE, shed light on the company’s plans going forward as well as the areas of opportunity in the growing hydrogen market. REGlobal presents edited excerpts from this session…
Since the company was formed, ICE’s portfolio has grown considerably and now has four mega-scale hydrogen ammonia projects across the globe. The first of these was the 26 GW Asian Renewable Energy Hub which houses major projects from the commonwealth governments as well as smaller projects by respective state governments in Australia. Our second project that was introduced this summer is a 25 GW project in Oman which is being developed in partnership with OQ, and Enertech, a subsidiary of Kuwait Investment Authority. Our third project that was also announced recently is the Western Green Energy Hub that is 50 GW+ and is also located in Western Australia. We also have a fourth project, a 50 GW+ energy hub that will be developed in the Middle East and North Africa (MENA) region; the location has not been finalised yet.
When we started ICE, we were very focused on having inexpensive wind and solar power facilities mostly located in deserts next to the ocean. As a result, locations with high solar irradiation and wind speeds were chosen. These include regions in North Africa, South America, Australia, and the Middle East. This would ensure that the projects in these regions would have the highest capacity utilisation factors as well as the lowest cost of energy. We originally intended to ship this electricity using undersea or overlaying cables, but it was only in the last four years where it became feasible.
In choosing project locations, a big factor is the tier-1 jurisdictions in terms of having access to the energy resource, and availability of large areas of land, as the projects must be built at scale. The planning and construction possibility are also important – whether the land is permittable or appropriate to develop a given renewable energy project. We also look at coastal access and shipping availability to enhance trade options. Additionally, we don’t want to hurt local land or interfere with cultural sentiments and wildlife.
In all the locations chosen so far, wind speeds are high at night but dip during the day while solar is the exact opposite, as it provides energy only during the day. Having a site that has both these complementary resources offers a plant capacity utilisation factor of higher than 70 per cent. On the contrary, having standalone wind plants only gives a capacity utilisation factor of at most 50 per cent while standalone solar will have capacity utilisation factors of a maximum of 30 per cent.
“When a combination of wind and solar are used for ammonia production, the levelised cost of energy can be as low as $15-20 per MWh which is much cheaper than standalone wind or solar plants, or even coal.”
The other significant criteria for a project to be successful is scale. When we look at the cost of production from a range of 3 GW to 25 GW, we find that, as we cross the 13 GW mark in terms of installed capacity, the cost of green ammonia production and hence, the price of energy drops substantially. This essentially means that as the project size is larger, there are increased efficiencies in resource use, operations, and supply chain management. Further, when a combination of wind and solar are used for ammonia production, the levelised cost of energy can be as low as $15-20 per MWh which is much cheaper than standalone wind or solar plants, or even coal.
All of our projects start with upstream wind and solar to produce hydrogen and mostly produce ammonia from the hydrogen, which will eventually be transported. This is especially important for a lot of markets such as shipping, road transport, iron and steel, chemicals, petrochemicals, and even for co-powering coal plants for electricity generation. Even the future of aviation may well be driven by synfuel which is made using recycled carbon and green hydrogen. For shipping and co-powering, direct ammonia can be used, however, for other applications, there may be a need to convert it back to hydrogen so that it can be used.
In terms of other low-carbon alternatives, there has been talk in the market about the role of hydrogen but generally, there is an oversight of the fact that biofuels, especially for shipping and aviation are in very small supply. We have had several companies in both sectors express their desire for a product that they can count on, to meet their decarbonisation goals. While these biofuels are more popular in some parts of Asia, it is linked to the fact that electricity derived from renewables is not that prominent.
When we map the future of hydrogen, BloombergNEF estimates about 200 million metric tonnes will be demanded by 2050, in the worst-case scenario while 788 million metric tonnes and 1,318 million metric tonnes will be demanded in the normal and best-case scenarios, respectively. Similarly, the IEA estimates that 520 million metric tonnes of hydrogen, of which 306 MTPA would be green hydrogen will be required to reach 2050 net-zero goals.
“The ICE’s portfolio of 11 MTPA represents a very small fraction of the demand projections in the future.”
Despite having large projects of 25-50 GW planned across the globe, with considerable budgets, the ICE’s portfolio of 11 MTPA represents a very small fraction of the demand projections in the future. This calls for the need to set up many large-scale hydrogen projects in the future if the global hydrogen demand is to be met.