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Climate Policy Environment 24 August, 2020 9:30 am   

Will the synergy of hydrocarbon giants allow Poland to build cities of the future?

Orlen, Lotos and PGNiG are looking for synergy in the hydrogen sector. Whether or not they will end up as a single company, they should cooperate to implement the hydrogen strategy. This will allow Poland to build cities of the future, for instance in Gdańsk – Wojciech Jakóbik, editor in chief at BiznesAlert.pl, writes.

A city of the future 

“I am often asked about the synergy with Orlen. This is one of the areas where we see space for synergy,” Jerzy Kwieciński, CEO of PGNiG, said during a press conference. “Poland produces large amounts of technical hydrogen, which cannot be immediately pumped into the transmission network and used in transport. The gas needs to be purified. We know that a well-developed RES sector could be used to produce hydrogen. We want to participate in this,” Kwieciński assured.

On BiznesAlert.pl we have already written about Vision 2030, an energy transition program in Saudi Arabia, which includes the development of the hydrogen sector. One of its propositions is to build an industrial city Neom, whose name can be translated as “new future”, where there will be an industrial area of 26.500 sq km between the Red Sea and the border with Jordan. Neom will run entirely on renewable energy sources and it will be the host of the world’s biggest hydrogen project. In July 2020 Neom signed an agreement with a US company Air Products and Saudi Arabia’s Acwa Power to build the biggest electrolizer in the world with a capacity of over 4 GW. The technology will be provided by Germany’s Thyssenkrupp and will enable producing about 650 tons of green hydrogen per day. From there, the fuel will be transmitted across the world, most probably also to Europe, which will not be able to get by without imports.

Synergy of giants

Whatever the future of other mergers which are supervised by the European Commission will be, one could imagine that the cooperation between PKN Orlen, the LOTOS Group and PGNiG, will one day result in similar projects, for instance near the Gdańsk Refinery. If one, huge company is formed, it will have a significant financial potential. “It will be possible for the EBITDA of this energy conglomerate to reach PLN 20 bn,” the PGNiG CEO predicted. It will be able to successfully implement the hydrogen strategy, which is currently being prepared by the Ministry of Climate.

PGNiG will play an important role in Poland’s hydrogen plans because the transport and storage of this fuel will be possible thanks to the existing gas infrastructure, a significant portion of which is under that company’s control. Some of PGNiG’s facilities are in the vicinity of Gdańsk, where the refinery is and where the FSRU for LNG imports will be located. Moreover, a gas storage unit – Kosakowo is close by as well. It’s an underground gas storage facility where hydrogen can be stored. According to Trinomics and Ludwik Boelkow Systemtechnik, Poland’s potential in this regard is big and amounts to 17.2 TWh. It’s more than France’s (16.3 TWh), but a lot less than Germany’s (153.5 TWh). “According to our research, mixing up to 8 percent of natural gas with hydrogen should not lead to any significant changes to technical infrastructure. It will be possible to pump the hydrogen that will be produced into the transmission network and to use it for transport,” Kwieciński explained at the press conference. Preparing the gas infrastructure to transmit hydrogen is also important for financial reasons. It will make it possible to use “green” EU subsidies in a more efficient way if Poles prove that the “dirty” projects, involving fossil fuels, may also be used to develop the so-called renewable gases, including hydrogen.

Time for a hydrogen strategy

Therefore, it is absolutely crucial for the government to adopt a hydrogen strategy. France, and Germany have already presented theirs, while Austria and Spain announced theirs as well. Some Western European countries, such as Portugal, Sweden and Finland have integrated their hydrogen strategy with other governmental documents. The important thing is though, that they do have a plan to develop hydrogen. Poland should follow their steps to build cities of the future, for instance in Gdańsk, and use the synergy of our companies with our biggest hydrogen potential.



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