Support for producers and consumers required to develop hydrogen power in Russia, claim experts

A pathway exists to boost the number of Russian scientific developments in the field of production, transportation, and consumption of hydrogen energy. The solution lies in fostering demand and providing government support to enterprises operating in this area. Taking these steps will help develop the promising hydrogen power market through making it commonplace, affordable, and even widespread. This was the conclusion reached by experts, members of the scientific community, and figures from major high-tech companies during Russian Energy Week (REW). The participants were speaking at a session entitled Hydrogen Power Technologies: Challenges and Opportunities.

KEY CONCLUSIONS

Natural hydrogen offers significant potential across a range of areas

“We view the use of natural hydrogen to be one of the most promising areas. <...> Just recently, on 7 July 2023 to be precise, hydrogen was included in the Russian National Classification of Mineral Resources and Groundwater,” Alexander Ishkov, Deputy Head of Department, Head of Directorate, Gazprom.

“In many cities [in China – ed.], electric buses have been replaced with hydrogen vehicles. That is because when it comes to urban transport, this form of fuel is more cost-effective. <...> We have our own asset which produces electric river trams for Moscow. It is where we have built Russia’s first hydrogen-powered catamaran. We have conducted trials and fully calculated economic factors. As a result, <...> the owner decided to build a run of vessels as a pilot initiative,” Yury Dobrovolsky, General Director at the Center for Hydrogen Technologies, Sistema.

“Last year, Rosatom signed a roadmap to develop hydrogen power technology together with the Government of the Russian Federation. <...> Hydrogen was officially included in Rosatom’s list of strategic product areas some time ago. That means we take it very seriously. That reflects primarily on efforts to develop our own technology which will aid us in the development of this area,” Evgeny Pakermanov, President, Rusatom Overseas.

“In the Concept for the Development of Hydrogen Power in Russia, we didn’t place the emphasis on exporting hydrogen as a product, but rather technological solutions. This is an area which continues to offer great potential. And it is excellent that our <...> companies are working hard to develop technological innovations. It is thanks to this that they are not only able to operate on the domestic market, but can also help friendly countries with technological sovereignty,” Oleg Zhdaneev, Advisor to the General Director – Head of Import Substitution at the Oil and Energy Complex Competence Center, Russian Energy Agency of the Ministry of Energy of the Russian Federation.

PROBLEMS

The high cost of producing hydrogen compared to traditional forms of energy

“We need to focus more on the domestic market, which in this segment cannot be as substantial as the export one. At the same time, any use of hydrogen is much more expensive than traditional energy sources. That means that major subsidies are needed, which do not appear particularly sensible right now,” Pavel Sorokin, First Deputy Minister of Energy of the Russian Federation.

“It’s always important to distinguish between the net cost of hydrogen production and transportation costs. That’s because producing hydrogen for a specific customer at a specific location is one thing. However, if it needs to be transported thousands of kilometres, then we understand that technologies related to liquefaction, transformation of hydrogen, and transportation are expensive, and comparable to the cost of producing the hydrogen itself,” Evgeny Pakermanov, President, Rusatom Overseas.

A lack of hydrogen power consumers and instability on international commodity markets

“Looking back over the last 10 years, it seems that there is simply no hope for a sensible energy and climate policy from many countries. <...> We must undoubtedly become an exporter of technology. <...> However, we cannot do this without sales. If your customer is not buying your product, you cannot sell the means for producing the product,” Pavel Sorokin, First Deputy Minister of Energy of the Russian Federation.

“The potential for gas processing in relation to transporting hydrogen is rather good today. <...> Our potential [to produce hydrogen] is around 18,000 tonnes per year at plants based in Surgut [in Khanty-Mansi Autonomous Area – Yugra – ed.] and Sosnogorsk [in the Komi Republic – ed.]. However, as things stand, we unfortunately do not have a single potential customer for large volumes,” Alexander Ishkov, Deputy Head of Department, Head of Directorate, Gazprom.

SOLUTIONS

Developing new hydrogen power technology

“We strive to base everything that we do on domestically produced technologies first of all. <...> We are deeply involved in developing and creating technologies for all stages of the hydrogen life cycle. That means what we do is directly related to the production, transportation, and consumption of hydrogen. <...> We have a range of technologies which are at a high stage of readiness, as well as new ones which we are now bringing to the market,” Evgeny Pakermanov, President, Rusatom Overseas.

“I think that we will be able to unveil Russia’s first hydrogen truck early next year. It will be capable of travelling 500–1,000 km. In order to achieve this, we are establishing a joint venture with partners in Belarus. So, we will not assemble a single prototype, but go straight into pre-series production,” Yury Dobrovolsky, General Director at the Center for Hydrogen Technologies, Sistema.

Doing more to support hydrogen producers and consumers

“We are now supporting producers in every possible way. <...> Only when support is provided by the consumer, <...> when there is demand, will technology develop. And this demand needs to be fostered. This could take the form of targeted subsidies for consumers which use particular technologies. Alternatively, the price could be partially subsidized, or there could be regulatory support – including for producers – enabling prices to be lowered,” Alexey Kaplun, Chief Executive Officer, H2 Clean Energy.

“Work is now well under way to allow us to run competitive processes for receiving state support by the end of the year. This will be directed to the development and creation of prototypes [related to hydrogen production, storage, and transportation technologies – ed.]. We expect this to partially compensate for slightly decreased demand at the first stage, and give an incentive to companies working in this area,” Pavel Sorokin, First Deputy Minister of Energy of the Russian Federation.

“In transitioning from technology to production, we need to all work together to systemically build up the demand needed to support competitive mass production,” Evgeny Pakermanov, President, Rusatom Overseas.

For more information, visit the Roscongress Foundation’s Information and Analytical System at roscongress.org/en.

The Russian Energy Week International Forum is a key global platform for discussing current trends in the development of the modern fuel and energy sector. This event is traditionally held at the highest level, featuring the participation of leaders from the largest companies in the energy industry. In 2022, more than 70 events, with the involvement of over 270 speakers, were held as part of REW. The Forum attracted over 3,000 participants and media representatives from Russia, as well as 83 foreign countries and territories. The Forum is organized by the Roscongress Foundation and the Ministry of Energy of the Russian Federation, with the support of the Moscow City Government.

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