Decarbonisation Technology - November 2022

come down significantly in recent years. This trajectory must continue with a focus on production hubs, where economies of scale are being pursued on an entirely new mega- scale, both onshore and offshore. For instance, new energy islands, planned in the North Sea offshore the coast of Denmark, are targeting 10 GW capacity for each project. Such scale would require 670 windmills, each standing 270 metres tall, filling the space of more than 60 soccer fields. Such mega-projects will capture the advantage of the better wind conditions offshore and, by going really big, make it feasible to have an artificial island made for low- carbon fuels production or even a floating setup. Mega-projects for solar power or a combination of both are now frequently announced and

conversion into ammonia. These will be key to the efficient conversion of renewable power to hydrogen and downstream products. Intermittency is less of a concern when renewable energy is in the form of hydropower. The cost of electrolysis will come down due to further advances in stack production, smart engineering, and scaling up. The levelised cost of hydrogen produced via electrolysis will approach that of fossil-based hydrogen via the SMR route (with CCS) by 2030 (about a 50% reduction from that of today) and is expected to be well below 2 USD/Kg H₂ by 2050. Two major routes to low-carbon hydrogen In the longer term, the electrolysis route will become the main source of hydrogen (often referred to as green hydrogen), but in the shorter term the carbon intensity of hydrogen production from natural gas or other fossil feedstocks via SMR reforming can also be reduced using carbon capture. Hence, there will be a period where we see both new builds of fossil-based plants and upgrades of existing plants with carbon capture and advanced forms of heat exchange. As such, reforming will likely contribute 20-25% of the total hydrogen market in 2050. These plants are often referred to as blue hydrogen plants and can be designed to capture close to 100% of the CO₂ that would otherwise be released into the atmosphere. KBR is heavily involved in developing and delivering technology for the blue hydrogen market. Besides offering blue hydrogen via our proven SMR plus KRES technology scheme with various CO₂ capture options, we are working with partners on further advancements in CO₂ capture technologies and usage of the CO₂ captured. This is vital, as these advancements will be key to lowering the carbon footprint of existing assets that today have no or limited carbon capture. However, both electrolysis and reforming with carbon capture must overcome challenges: • Abundant, cheap natural gas for the blue hydrogen route is not available everywhere, while optimal CO₂ sequestration options or immediate usage for large amounts of CO₂ captured must also be considered • Similarly, a supply of renewable electricity is critical for the green hydrogen route. Not all

In 2050, it is estimated that three-quarters of the world’s hydrogen demand will be supplied via electrolysis

needed to ensure enough renewable power going forward. The latter has been boosted by all the major International Oil Companies (IOCs) embracing the energy transition. In 2050, it is estimated that three-quarters of the world’s hydrogen demand will be supplied via electrolysis. The rest will be by a combination of fossil-based production routes with CCS added plus some nuclear and methane pyrolysis. Other not yet commercialised routes will take up an unknown part of the mix. KBR is collaborating with partners across the hydrogen value chain, addressing all the routes mentioned above, to continuously enhance existing technologies and commercialise new technologies. We are working with several global electrolyser producers on balancing the electrolysis plant, modularisation, and smart construction when scaling up and using advanced control tools for optimising the output. KBR’s proprietary K-Green technology features advanced process control (APC) and digital solutions that adapt to the intermittency of renewable power, allowing for optimal production of green hydrogen and downstream