German-based energy technology and engineering group GICON and the Vietnam Petroleum Institute (VPI) signed a memorandum of understanding (MoU) in May to cooperate in renewable energy and hydrogen production in Vietnam. At the same time, low carbon energy developer Enterprize Energy proposed the government combine the development of its Thang Long offshore wind power project in south-central Binh Thuan province with green or renewable, hydrogen production. Vietnam currently has a number of foreign investors interested in developing green hydrogen as the country’s extensive offshore wind resources offer the industry considerable potential.
The Thang Long offshore wind power project will be built as a grid-connected wind farm of 3,400 MW. With government consent, however, Enterprize Energy hopes to expand development by 2000 MW or more, specifically to provide power to the green hydrogen facility. "We anticipate doing this under a Direct Power Purchase Agreement between the farm and the facility,” Mr. Ian Hatton, Chairman of the Enterprize Energy Group, toid VET. “As there is more visibility on the development of this market, Thang Long has the potential for further enlargement, and this give us the opportunity to create more energy for Vietnam without additional electricity grid capacity. We also see value in other processing byproducts. so the facility should be regarded as an offshore electricity refinery.'
The export of green hydrogen from the site is expected to be via vessels similar to those used for liquefied natural gas (LNG) or liquefied petroleum gas (LPG). “We are looking at options to store the gas prior to transport” he said. “That could be achieved with tanks set on the sea-bed. or a captive tanker, in a similar way to oil and gas developments that are off the pipeitne network. A major advantage for this business model is that wind generated electricity that is not required for onshore grid supply can be used to generate green hydrogen. As a result, that energy is not lost forever and its use in this way increases the
efficiency of the overall project."
The MoU between GICON and VPI aims to support sustainable economic development in Vietnam and develop joint strategics that take into account the goal of a global climate-neutral energy supply. GICON has identified three stages to achieve Its goal The first is the development of renewable energy sources, as primary energy, while the second is dedicated CO secondary energy, for instance forms of energy that consumers can typically purchase. In the third, priority must be given to converting energy chat is no longer used by end consumers, but is regeneratrvely generated electrical energy, into hydrogen as an energy carrier. In further additional stages, the production of synthetic fuels and raw materials from the regenerative hydrogen is also conceivable.
Vietnam has great potential to produce electric power from renewable sources, which will go for beyond the needs of its own power grid, according to Mr. Jochen Grossmann, Chairman of the GICON Group “There is powerful potential also for the development of a hydrogen economy and successful energy transition in Vietnam that can radiate beyond the country's borders,” he said. "We are already laying the foundations today with our partner VP1 to be able to work specifically in the production and use of green hydrogen in the future. It win not be a shortterm process, but a far-reaching road that we are already traveling."
Meanwhile, hydrogen fuel cell maker Plug Power, through its joint venture with South Korean conglomerate the SK Group, is planning to expand its business to China, Vietnam, and South Korea, and Australian nickel developer Blackstone Mineral also plans to investigate whether green hydrogen can be used to power processing at its flagship Ta Khoa Nickel-Cop- per-PGE project in northern Son La province.
Global annual hydrogen demand is forecast to grow from about 80 million tons in 2021 to 100 million tons by 2030, according to Fitch Solutions. The green hydrogen sector could produce about 10 million tonnes per year by 2030, boosting market share from the current 0.1 per cent. The global portfolio of green hydrogen projects reached 71 GW in February, though there were no protects in the 2019-2020 period, and increased in the second quarter to 121 GW, including 136 prefects in the planning and development phase. Average investment is about $4.5 billion.
The falling technology cost of offshore wind globally is a vital factor Influencing the increasing investment interest in green hydrogen, which plays an important role in decarbonizing various economic sectors, according to Mr. Vo Thanh Tung, Project Officer ar the GE Energy Support Program. The hydrogen produced will be for both export and for national production.
In fact, demand for green hydrogen generated from water electrolysis via renewable electricity will increase at a global scale for various sectors, including transportation, manufacturing, chemicals, heating, and power in the medium and long terms. Mr. Tung has observed that developed countries like Japan, South Korea, the US, and European countries have developed their own national strategies that will potentially drive the global green hydrogen market to grow more than five-fold in size by 2050. This highlights the opportunities for potential investors who want to approach dynamic international markets.
"At the national level, the annual capacity of fossil fuel-based hydrogen generated from the steam reforming process is 500,000 tons, mainly for refineries and the fertilizer industries,” Mr. Tung said. “Green hydrogen technology is available and green hydrogen manufacturers can find opportunities to replace existing conventional hydrogen and unlock new applications for green hydrogen in other industries. There will be a lot of potential business opportunities for stakeholder” to explore and develop the national green hydrogen industry.”
Developing green hydrogen production from renewable energy will have additional requirement*, including research and demonstration, technology readiness and viability, safety, markets, and water supply for electrolysis production. “Green hydrogen production from offshore wind energy in Vietnam therefore holds potential for several reasons,” Mr. Vinh Van Nguyen, Senior Research Fellow at the SF1 Research Centre lor Energy, Climate, and Marine (MaREI), explained. “Firstly, the high potential and capacity factors of offshore wind and plant lifetimes more endurable. Second, there is substantial water supply if direct elec trolysis from seawater is feasible at scale. Lastly, transport to potential export markets such as Japan. Singapore, South Korea, and Europe by tanker is convenient. Much effort t* needed, however, to make these happen.*
Based on the Politburo's Resolution 55-NQ/TW on the orientation of the Vietnam’s National Energy Development Strategy to 2030 and outlook to 2045, Vietnam could completely achieve 10 GW or more for offshore wind power connected to the national grid by 2030 and 5 GW for the development of hydrogen projects. “Setting specific targets will create favorable conditions for energy companies to bring forward project proposals and engage with relevant ministries on how projects are to be conducted,” .Mr Hatton said.
Clear and simple regulations on the approval of plants in the renewable energy business sector. Like onshore and offshore wind farms, that are also manageable for foreign investors, would also help, according to Mr. Grossmann. “Investments in new hydrogen infrastructure are currently considerably more expensive,” he said “For this reason, this infrastructure should initially only be built at a few targeted locations with very efficient connections to the supra-regional power grid“.
In order to complete the job effectively, Mr. Nguyen also recommended that the Vietnamese Government as well industry sectors set goals and a roadmap for the future development of green hydrogen. “Research, development, and demonstration should be the focus of all stakeholders, including State agencies and companies,* he said. “This may help establish supply chains for manufacturing and producing via pilot projects, and develop standards and efficient policies. An energy transition roadmap and action towards green hydrogen energy and Its derivatives are important to all Lakeholders, including oil and gas corporations, electricity generation companies, transportation providers, and cement and steel producers."
As green hydrogen projects are the future far Vietnam, he suggested, challenges and lessons can be learned from pioneering countries. "Though green hydrogen energy is promising, it poses many challenges in all aspects of business plan*, project development and implementation, production, storage, transportation, and consumption. in addition to renewable energy devti - oprnent,* he added. “Specific challenges could include public awareness, safety procedures, standards, local supply chains for the manufacturing of equipment and materials for electrolysis, hydrogen storage, and transportation.*
Green hydrogen has only been mentioned in general in existing energy policies, and is yet to have a clear role in future energy and power systems. Though it's already a global trend, hydrogen is still new in Vietnam, and in order to define targets or suitable policy, a national Study on potential, challenges, and opportunities should be conducted in the global, regional, and national context,” Mr. Tung proposed.
Based on that, he went on, a roadmap could be developed with the participation of various stakeholders to share and set up holistic and consistent medium- and long-term visions, goals, and strategies. Green hydrogen technology is available, but the cost remains uncompetitive at the moment, and suitable policies to create sustainable markets are needed. By scaling up supply chains, these investments could drive cost reductions among stakeholders
SOURCE: VIETNAM ECONOMIC TIMES; ISSUE NO. 321, AUGUST 2021; P22-P23