Shell, RWE to partner on low-carbon hydrogen, CCS in Europe

Shell and RWE have signed a memorandum of understanding on the production, use and distribution of renewable hydrogen, as well as agreeing to explore options to decarbonize RWE gas and biomass-fired power plants in Northwest Europe, the companies said in a statement Nov. 10.

The companies are exploring options, including renewable hydrogen production in the UK, Germany and the Netherlands and hydrogen produced from fossil fuels with carbon capture and storage for use in several of RWE's power plants, they said.

The two parties are also to investigate decarbonizing existing RWE gas- and biomass-fired power plants with the addition of CCS.

"Progress towards net-zero emissions needs government policy to support the energy transition and our customers' needs for low-carbon energy solutions," Shell Director of Integrated Gas, Renewables and Energy Solutions Wael Sawan said in the statement.

"It makes sense for us to evaluate the potential of joint decarbonization projects and make the best of the global energy experience both companies bring to the table," Sawan added.

The companies said they would identify "concrete project options" before developing towards investment decisions.

RWE and Shell said they wanted to examine the potential for producing green hydrogen by electrolysis of water powered by "gigawatt scale" offshore wind in industrial regions in the Northeast of England, such as Teesside and Humberside.

The companies will also assess locations that have potential hydrogen pipeline capacity, but are difficult to connect to the power grid.

Elsewhere in Europe, RWE and Shell aim to develop renewable hydrogen for industrial customers around Shell's Rheinland plant in Germany and Shell's Rotterdam and Moerdijk facilities in the Netherlands.

In the mobility sector, the two companies are exploring hydrogen applications in Germany the Netherlands and the UK, building on Shell's plans for a hydrogen refueling network for trucks between Rotterdam, Cologne and Hamburg by 2024.

In the power sector, the memorandum includes examining options for decarbonizing RWE's gas and biomass power plants, including adding CCS technology.

Shell could also supply blue hydrogen, produced from fossil fuels and combined with CCS, to RWE's gas-fired plants in Pembroke in Wales, Emsland in Germany and Moerdijk in the Netherlands.

The companies said the results of such tests could be transferred to other RWE facilities.

Calculated costs of blue hydrogen production are significantly below those for green hydrogen, based on spot feedstock gas and power prices plus capex, but the gap is expected to narrow rapidly by 2030.

S&P Global Platts assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur10.16/kg ($11.70/kg) Nov. 9 (Netherlands, including capex), based on month-ahead power prices. Blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was less than half the price, at Eur4.85/kg.

Other partnerships

Shell and RWE have already partnered on hydrogen projects including the 3 GW NortH2 offshore wind-powered electrolyzer project in the Netherlands and the 28 MW AquaVentus project in Germany.

Separately, Shell signed an MOU with Hydro on developing renewable hydrogen production to help decarbonize the two companies' own operations and to supply customers in heavy industries, as well as the marine and road transport sectors, Hydro said in a statement Nov. 9.

Shell and Hydro aim to build renewable hydrogen production around existing production sites for the two companies, where they see "strong potential for scaling production" for demand from heavy industry and transport.

Hydro said it plans to replace natural gas used for heating in its aluminum production with renewable hydrogen, helping to meet its target of cutting greenhouse gas emissions by 30% by 2030.