Monday, August 23, 2021

"Hydrogen Production in Ukraine: Escape From Energy Dependency and a New Source of Revenue After Nord Stream Two"

From the Jamestown Foundation's Eurasia Daily Monitor, August 18:

On June 19, Ukrainian Foreign Minister Dmytro Kuleba, speaking at the Antalya Diplomacy Forum, in Antalya, Turkey, underscored that the use of alternative energy sources will have strategic meaning for Ukraine, helping the country to effectively address both current and future energy security challenges (Mfa.gov.ua, June 19). He also underscored that since the European Union “has indicated Ukraine as a priority supplier of ‘green’ hydrogen to the EU market […] Ukraine is now actively working on ways to develop its [hydrogen] exports” (Ukranews.com, June 19).

Indeed, although hydrogen—frequently dubbed “the oil of the future”—still has not generated the creation of a global commodity market, the time is ripe for Ukraine to begin working on the means to optimize the production of this resource, saturate its domestic market, as well as calculate future export routes. These tasks come with a particular urgency given the upcoming launch of the Nord Stream Two natural gas pipeline project as well as the EU’s initiatives in the realm of de-carbonization (the European Green Deal and the Carbon Border Tax) that could, although in different ways, pose challenges to Ukraine’s economy (see EDM, February 24, June 24, July 21).

As noted by one of Ukraine’s top renewable energy experts, correspondent-member of the National Academy of Sciences of Ukraine Stepan Kudrya, Ukraine has vast but, for now, largely unexplored potential in the production of hydrogen (Kosatka.media, February 10, 2020). Some of the first applied research into the use of renewable and green energy in Ukraine began in the 1980s, at the Kyiv Polytechnic Institute and the Chernihiv-based “Desna” polygon. Following the collapse of the Soviet Union and resulting economic crisis, those promising initiatives were halted, however, and interest only reemerged after 2019. In 2020, the then–acting minister of energy and environmental protection, Olha Buslavets, stated that since “Ukraine has set ambitious climate- and de-carbonization-related goals […] the use of ‘green’ hydrogen should be seen as one of the main instruments helping it to advance to achieving these plans. The Ministry [of Energy] is already working on a hydrogen-related road map” (Ukranews.com, November 12, 2020). These opinions—Ukraine’s great potential and bright prospects with regard to the development of hydrogen-related potential—are shared by virtually all domestic energy experts, including Leonid Unigovsky, the head of Naftogasbudinformatika and one of the country’s top practitioners in the realm of renewable energy. Specifically, he stated that some practical results could be achieved by 2025–2030, adding that Ukraine and Norway could become key suppliers of hydrogen to Europe, due to their competitive advantages in this field. However, the specialist underscored that to be able to advance in this direction, Ukraine will first need to address several fundamental problems that include, among others, hermetically sealing the pipeline system (given the specificities and distinctive characteristics of hydrogen as a commodity) as well as some complex technological solutions related to hydrogen production and refining (UNIAN, February 13, 2020).

Nonetheless, from a technical point of view, Kudrya argued that Ukraine is now capable of manufacturing up to 70 percent—in fact, this number could be increased to 100 percent—of the equipment indispensable for hydrogen generation. He asserted that Ukraine’s current industrial potential—specifically, the Yuzhny Machine-Building Plant (Yuzhmash) and 22 other factories that are part of the domestic defense-Industrial complex—is already sufficient for the task (Kosatka.media, February 10, 2020).

Leading Russian experts do not share their Ukrainian counterparts’ optimism....

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