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Question

The blending of gas and hydrogen gives turbines a new lease of life but can a new turbine be justified on the previous traditional RoI basis or does it fall into a stranded asset in ten years of useful life? Is inertia coming to an end?

Paul Hobcraft's picture
Innovation & Energy Knowledge Provider Agility Innovation

I work as a transition advocate for innovation, ecosystems, within IIoT, and the energy system as my points of focus. I relate content to context to give greater knowledge and build the...

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Seems to me there is a religious belief that green energy must replace all forms of energy production. However, as with most cults, reality ultimately prevails and a more level headed world emerges.

Assuming that fossil fuels will not be used in the future is utterly unrealistic. Rather, a middle-of-road pragmatic energy mix will win out as the radical fringe is thrown to the side of the road. The economic and environmental stupidity of their irrational green energy policies are becoming painfully obvious to all with every passing day.

As far as gas turbines are concerned, the machines are exceptionally operationally flexible and can readily adapt to using some hydrogen. The machines will continue to be used to meet our energy needs more or less following todays patterns. Technological gas turbine advancements will continue to improve financial and environmental performance. 

Cost is still a big issue.  Currently, the cost to make green hydrogen from electrolysis of water is around $5/Kg.  In order for hydrogen to be cost competitive with natural gas, it would need to cost around $0.50/Kg.  Advocates for renewable energy continue to claim cost reductions for solar and wind, but the current inflation rate, particularly for copper and electrode materials, casts that assumption into doubt.  Further, the real question is when the asset becomes "stranded".  The current tax laws require utilities to use 15 year depreciation for simple cycle gas turbines and 20 years for combined cycle plants.  Smaller industrial plants can use 5 - 10 year depreciation, while larger facilities (greater than 500 Kw) can use 10 - 15 years.  Again, there is a trade off.  If we take 15 years as the depreciation period, then the question becomes whether or not we really think that the use of natural gas will be completely abandoned in less than 15 years.  That may be true in some states, but not in most states.  All that would be needed is one cold winter and public support for banning natural gas will greatly diminish.  Most industrial users have switched from coal and oil to natural gas, provided that a gas line was available.  With all of the other costs coming their way, they will not be in a position to readily switch from gas to something else.  One last consideration is that the volumetric heating value of hydrogen is less than one third that of natural gas.  That means that to get the same heat content of the gas in the pipeline and through the burner, the cross section of the pipe (and burner throat) has to increase proportionately.  Again, that brings into question the idea that hydrogen can be readily substituted for natural gas.  Perhaps in some locations, that will be the case.  In others, probably not.

Thank you Paul Hobcraft for this question. Yes, hydrogen does give a new opportunity for gas turbines, I fully agree. The second part of your question consists of two aspects. One, assuming gas turbines will continue to serve the market on the basis of how they served the market traditionally. We can easily conclude that, in the power generation market, increased renewable energy connected to the grid impacts this traditional role quite a bit. This means that there is a new role for gas turbines. A role where gas turbines play along side renewable power generation, hand in hand. Coming to the second aspect about the stranded asset. When considering this new role for gas turbines, new build units are expected to work together with other renewable energy in the future on the basis of hydrogen use (or potentially other green fuels). New build units can be made ready for such scenario, avoiding these units to end up as stranded asset. We call that "H2-Ready" power plants, for which we - at Siemens Energy - were recently awarded an external certification. That means that new units can be build 'future-proof'. Have a look here if you're interested, we have a nice animation on the site: 

https://www.siemens-energy.com/global/en/offerings/power-generation/powe...

 

Paul Hobcraft's picture
Paul Hobcraft on Feb 17, 2022

Gas turbines do need to find a new, different role. A more supportive one. Maybe we will see smaller units as the need, the fast ramping up has huge value when demand suddenly peaks but will this be handled differently. Holding energy is different and how does the turbine fit to this, in a less dominant role, more a reverse, subsidiary role perhaps

With lifecycles of thirty or more years when turbines can be refitted is a growing worry for those past traditional RoI's, hence the different configurations and fitting turbines to a broader power generation configuration. Selling the same thing, adapting it to having Hydrogen is one step in a evolution.

I follow closely Siemens and "future-proof" is great but does not address all the future changes, it can't but unless there is not a RADICAL repositioning and thus design, they stay stranded assets in my mind

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