BETTING ON GREEN HYDROGEN. Marco Alverà is CEO of Snam, one of the world’s leading energy infrastructure operators and among Italy’s largest listed companies with a market capitalization close to 17 Billion Euros. He is also a visiting professor at Oxford University, and recently wrote a book ‘The Hydrogen Revolution: a blueprint for the future of clean energy’ to be published by Hodder Studio on August 26 in the UK and by Basic Books on November 16 in the United States.
You can listen to the podcast of this interview here.
Marco Alverà, why did you write a book on hydrogen?
In 2004 when I was working at Enel I went to Japan and studied hydrogen. I wrote a report saying, “I love this technology, but it will never work. It’s too expensive.” I was skeptic, but I was converted four years ago by my team here at Snam. I wrote a story with them that showed how powerful hydrogen can be in the battle against climate change, and how necessary hydrogen is to wean the world off hydrocarbons and on a path to net zero.
When did your understanding of the importance of fighting climate change develop?
The seeds of my interest in climate change were sown on a trip to Norway. At the time, I was working at Eni, in the gas department. My main concern was that, if I wasn’t good at my job, we ran the risk of blackouts or cold winters without energy. But then my eyes were opened to a whole new set of concerns. I was climbing up a very steep fjord in Norway with the BBC journalist Dr Gabrielle Walker, who wrote several successful books on climate. She was pragmatic and spoke about “Pascal’s Wager” for energy. Her point was that even if I thought the chance of a climate catastrophe was only 1%, the consequences of global warming are so big that we need to act. That’s when I understood how urgent the whole climate debate was and I started looking for solutions, but it was 10 years until I re-discovered hydrogen.
What is the relevance of “Pascal’s Wager”?
Blaise Pascal, the French philosopher, theologian and mathematician, basically said, “You’re better off assuming God exists, even if you aren’t 100% sure. Because, if he does exist, and you live your life assuming he doesn’t, then you may not go to heaven.” Gabrielle was saying, “I don’t care if you believe it 100 percent or not, if I’m one percent right then the cost for your children” – and I had just had my first daughter at the time – “is so great that you need to act as if you believe in it 100 percent.”
“We can make green hydrogen cost competitive with oil”
Marco Alverà,why does hydrogen, specifically green hydrogen, provide a solution?
The world is on a path to greater electrification. Today electricity accounts for 20 percent of energy and it could go up to 50/60 percent. But that still leaves a lot of the energy system to worry about. Coal, oil and gas molecules, that make up 80 percent today, need to be replaced by green molecules. Hydrogen is a molecule that behaves like oil and gas and, to some degree, coal. It could be piped, put underground and burned. With similar usability as gas or oil, when you use hydrogen it only emits water. Hydrogen has always been perfect, but was too expensive because the cost of solar was very expensive.
Why is green hydrogen dependent on solar energy?
Hydrogen is the most abundant element in the universe. 60% of the atoms in our bodies are hydrogen. Attached to oxygen, it becomes H2O, water. To make green hydrogen we need to run a solar generated electric current through a tank full of water to split the oxygen atoms from the hydrogen ones to make H2 molecules. The cost of the renewable electricity required to do so used to be very high. Ten years ago it was $400 per megawatt-hour. Now we’re down to $10 in Saudi Arabia. We went from $400 to $10.
Around 2005 Italy, Spain, the UK and Germany decided to go big on solar energy. Solar cost subsidies were added to people’s bills, so everyone in these four countries paid a lot more for their energy. These subsidies triggered the construction of great factories in China that started competing with each other to make solar panels, and the cost of the solar panels went down very fast. This benefitted the whole world, but at a great cost to our citizens.
Could the future major producers of solar energy be the North African countries, and can Snam then bring it to Europe?
Sicily is already physically connected to Tunisia, Algeria and Libya. Snam also owns parts of the network in Austria, Greece and the South of France. We suggest putting solar panels in the deserts in Tunisia, Libya, Algeria, Morocco and Egypt and further south. That belt has the ability to produce all the energy we need – renewable, cheap and with no emissions. We can extend into Jordan and Israel can be a hydrogen hub for the whole Middle East.
Can green hydrogen save the whole world from global warming and ecological disasters?
The 2021 United Nations Climate Change Conference, COP26, will be held in Milan and Glasgow. Snam has co-founded the ‘Green Hydrogen Catapult’, which brings together Iberdrola, one of the world’s largest renewable energy companies based in Spain; Ørsted, one of the world’s largest wind companies – we can also make hydrogen with wind power – based in Denmark; ACWA Power, the world’s largest solar developer, based in Saudi Arabia. We have Yara who make fertilizers; we have Envision that makes equipment in China, CWP Renewables and us. At COP26 we will tell the world that we can make green hydrogen cost competitive with oil in some applications in five years.
Is this really happening?
Yes, I wrote a book, coming out in August, called “The Hydrogen Revolution” to tell this story. Seven of the world’s largest energy companies are fully committed to this. Technical teams from many different companies work together and share experience, and we are investing our money to make it happen. We have bought a Milan based company called Industrie De Nora, the world leader in electrolysis, the technology that converts water into hydrogen.
“Hydrogen has always been perfect”
Marco Alverà, car companies are now investing massively in electric cars. Where do you start with hydrogen?
Hydrogen will start in heavy industry – steel, cement, glass – where electrification is very difficult or very expensive. Other heavy sectors – like ships, trucks, trains – that run on diesel will be running on hydrogen. Truck manufacturers like Daimler, Volvo and Scania, are convinced that hydrogen will play a big role. When it comes to electric cars hydrogen still has a way to go, but when you put hydrogen into a fuel cell you produce electricity, so the car is exactly the same, the only question is will it run on a battery or will it run on a fuel cell, and hydrogen is much lighter than a battery. The new green Land Rover Defender is going for hydrogen to cover long distances with power.
You call hydrogen the ‘Internet of energy’. Why?
Hydrogen will connect all sectors of the energy market and it’s a phenomenal business opportunity that will change everything. Some investment banks say it’s a $15 trillion opportunity. From that point of view it’s bigger business than the Internet.
Will hydrogen change the behaviour of countries?
We have bought a stake in the gas grid in Abu Dhabi. Gulf countries are amongst the most advanced believers in hydrogen in the world. Abu Dhabi, the Gulf and Saudi Arabia have the sun, the land, the technology, the infrastructure, the ambition, the capital. Our ideas help them become sustainable countries. 70 percent of their population are younger than thirty-five years old and really pushing for a green agenda.
What about America?
Some of the best solar and wind resources in the world are in America. I had a great lunch with Secretary Kerry, the US Special Presidential Envoy for Climate and a believer in hydrogen. I told him we want to bring this concept of getting hydrogen cost competitive with oil within five years from COP26, and that we call it the Moonshot, which is what JFK called his ambitious plan to go to the moon. The Department of Energy in America recently came out with their version of the Moonshot, which they call the Earthshot – which is not only to make hydrogen cost competitive with oil in five years, but also to make it cost $1 a kilo in 10 years. That means making it competitive with coal. So we, of course, are great believers in that programme as well.
How can ordinary consumers help the programme?
We need to consumerize CO2, which today is measured in gigatons. The world is emitting 40 gigatons a year, and we need to bring that down. Fine. But what can I do? What can consumers do about that? We need to turn CO2 into kilos, so that if I take my car to Tuscany for the weekend I’ll know how many kilos I’ve emitted and can then offset that.
What has the corona virus lockdown shown?
Lockdown taught us a very severe lesson, that trying to fix the climate by stopping everything will not work. We did stop everything and the impact on CO2 reduction was only 6%. The cost to economies and to social life was too great, and we have proven that the option to fix the climate by stopping flights, stopping ships, stopping cars, stopping eating meat – even stopping having babies, which some people argue that we should do – is not the solution. It simply doesn’t work.
Marco Alverà’s book ‘The Hydrogen Revolution: a blueprint for the future of clean energy’ is published by Hodder Studio on August 26 in the UK and by Basic Books on November 16 in the United States
Snam network control room in Milan
Milan based company Industrie De Nora is a world leader in electrolysis
At work on the the trial of H2 injection in the Snam network
H2scan’s Process Hydrogen Analyzing System provides a complete solution for process hydrogen measurement in refineries, chemical plants, air separation units and industrial gas manufacturing plants.
Marco Alverà is CEO of Snam and also a visiting professor at Oxford University
“This is an unprecedented opportunity”
Marco Alverà, are you optimistic about the destiny of our world?
Yes, I’m a believer in optimism and action. My two daughters are now eleven and nine, and when I recently heard the science journalist Piero Angela at an event in Rome he said, “All the catastrophe is meant to happen in 2100 when today’s children will be the same age as I am today.” That’s when all the climate models show the greatest warming and oceans rising. I come from Venice, and even just one more metre of sea level means losing the whole city. Now we want to make Venice the world’s capital of sustainability and save it from the climate threat. It’s not about future generations in an abstract term. It’s about my daughters, and the Venice that they will live in when they are older.
We have to act now?
A ton of CO2 avoided today is worth almost 40 tons of CO2 avoided in 40 years’ time. So that’s why we need concrete and pragmatic urgent actions. And we need a narrative of hope.
I’m a businessman and I have never seen a bigger business opportunity. This is potentially bigger than when cars began to emerge with engines and the US railways in the 1930s. This is an unprecedented opportunity because of the way that we will be generating cheaper and cleaner energy.
Will Snam be the ones who will convey this energy?
Goldman Sachs estimates that several trillion dollars of infrastructure is needed, so there’s room for everybody. Snam have recently completed the European project to bring gas from Azerbaijan into Puglia, across Georgia, Turkey, Greece, Albania, and the Adriatic Sea. Snam has the ability to think big and to get these projects done in a very concrete way, and that’s what we need for this energy transition.
Either we do this, or we’ll sink?
We need to make energy cheaper for everybody. A lot of people still suffer blackouts. The faster we move, the cheaper it will be and the more economic growth we will allow, including for developing countries in places like Africa who we need to help develop their own clean and sustainable energy.
Your work life must be very broad and interesting. Do you really enjoy your job?
I do, and the most important part of my job is to attract good people. I’m proud of the recognition we got from Forbes saying that we have been voted in 2019 the second best employer in Italy. The first being the rather better known brand Ferrari!
Is there anything else you would like to say?
I think the key to good ideas and good teams is diversity. Over time, I would like Snam’s employees to be 50% women. We are an engineering company, and we have a lot of difficulty in finding female engineers. In Italy only 5% of 15 year olds want to study the subjects of Science, Technology, Engineering and Maths that 80% of future jobs will require. In Italy, only 40% of girls think that they can do as well as boys in maths so there’s clearly a cultural issue. We need to address this to stop Italy losing our best potential, which is our incredible human potential. I work passionately on this as chairman of Fondazione Kenta, named after my grandmother.
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