Hydrogen trade may be a distant future

Luc Williams

In the debate “Natural gas – transitional, but necessary”, which took place during the 16th European Economic Congress in Katowice, the future of gas and energy transformation were discussed by: Jarosław Ziębiec, vice-president of the management board of Towarowa Giełda Energii, Hubert Kamola, vice-president of the management board of Grupa Azoty, Adam Czyżewski , chief economist of Orlen, Sławomir Hinc, president of the management board of Gaz-System, Dariusz Bliźniak, vice-president of the management board of the Respect Energy Capital Group, Sara Piskor, director of strategy, public affairs and communication of the European Network of Gas Transmission System Operators.

Industry and operator representatives agreed that natural gas is extremely necessary, both as a fuel and as a raw material. The usefulness and popularity of gas will also be determined by its price. Is regional integration in the field of gas possible, just like in the energy market?

Jarosław Ziębiec, vice-president of the management board of the Polish Power Exchange / Press materials

Gas has migrated to exchanges when it comes to trading, which confirms that they fulfill their role. I think there is no need to create additional administrative tools, he concluded Jarosław Ziębiec

– Gas is an attractive raw material and this does not need to be demonstrated. The integration of European energy markets took several years. There is nothing like this on the gas market and I don't expect it to happen. Too many things would have to be done, said Jarosław Ziębiec, vice-president of the management board for business development at the Polish Power Exchange. – If we say that gas is a theoretically transitional fuel and that we are degasifying the European Union, I do not expect that the gas market will create the same trading pattern and setting a uniform price on the market as in the case of energy markets. No one will strive to create an analogous mechanism. I don't know if this is even necessary. We have gas exchanges – there are several of them in Europe – which fulfill their role, he emphasized.

As he said, there is a clear upward trend on the stock exchanges.

– If we look at the last three years, – unlike the energy markets – the gas market is actually listed – said the vice-president of the Polish Power Exchange, citing statistics regarding the European Union. In the first quarter of 2020, the share of gas turnover on exchanges was approximately 36%, the rest were OTC and transactions registered and settled in chambers. In the third quarter of last year, the percentage related to the stock exchange already exceeded 70%.

– Gas has migrated to stock exchanges when it comes to trading, which confirms that they fulfill their role. I think there is no need to create additional administrative tools – concluded Jarosław Ziębiec.

Discussion participants also talked about the challenges and opportunities related to the energy transformation. Sławomir Hinc, president of Gaz-System, drew attention to the challenges related to transmission.

– We have a lot of renewable energy sources in the north of the country and it could be consumed in the south, where there is not necessarily a place to locate renewable energy sources – he said. – The gas network in Poland has been built over several dozen years. This shows that hydrogen transport is not a matter of a decade, it is a project spread over many, many, many years ahead – he emphasized, referring to the issue of building water pipelines.

Adam Czyżewski, chief economist at Orlen, emphasized the issue of potential hydrogen recipients.

– From an economic point of view, the key question is how the hydrogen market will develop in Europe. Who will pay for hydrogen, what industries, who needs it most? Where are the substitutes for hydrogen and where are they not? We just have to watch what will happen on this hydrogen market, because for now we operate on the supply side. We produce, we are one of the largest producers of hydrogen – we Poland, but also Orlen as a company, but we use it internally, for our own needs. There is a question whether there will be recipients outside, he noted.

Dariusz Bliźniak from the Respect Energy Capital Group also drew attention to the problem of hydrogen recipients.

– Today we have a dilemma: whether to build a stationary storage facility of 1,000 MW, which would absorb the entire production of renewable energy that the system will not accept, or, for example, use it through electrolysis to produce hydrogen, he said.

In his opinion, the second solution is more complicated due to the lack of a hydrogen consumer.

– We can store hydrogen at the place of production. This is true, it is easy to store. But turning hydrogen back into electricity is economic nonsense. With each change of form, we lose a lot of energy originally contained in this medium, which makes the entire production process more expensive. Producing hydrogen is not pointless, converting it back into electricity is pointless. But turning it into fuel that powers specific things makes perfect sense. The only question is whether it will be a sufficient quantity and whether it will find a buyer, he noted.

The Polish Power Exchange is also preparing for the energy transformation, although – as Jarosław Ziębiec noted – everything depends on the market situation.

– As a stock exchange, we are at the end of the food chain. First, there must be enough biomethane, hydrogen, not consumed for own needs, and there must be demand. I would love for us to have something to trade, but first it has to be in the right quantity. When it comes to hydrogen, it is a very distant future in my opinion, he said.

“Transformation for the future” is the main idea of ​​this year's European Economic Congress. The thematic paths included: “Energy and transformation” and “Industry, raw materials, fuels”.

Press materials


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