Russia’s mineral and energy wealth has given it a second chance in global affairs after the Cold War and the implosion of the Soviet Union. Oil and gas exports have provided the necessary income to rebuild the country and exert influence abroad. The energy transition is the ‘Sword of Damocles’ hanging over the Russian fossil fuel industry. Moscow, therefore, is trying to find a new purpose for its energy industry by early investments in hydrogen technologies.
Russia’s energy ministry is working on a hydrogen strategy in cooperation with foreign partners in Japan and Germany. The tools for this transformation are the country’s energy titans Rosatom, Novatek, and Gazprom. Each of these companies, with the support of Moscow, is looking into different technologies to produce and export the hydrogen.
According to deputy prime minister Alexander Novak, “experts say that hydrogen may constitute 7 to 25 percent of the global energy balance by 2050, as soon as the issues of high production costs and the challenges related to transportation are resolved.”
To develop a hydrogen sector, Russia intends to use the assets it already possesses such as the world’s largest natural gas reserves, strong nuclear know-how, and high-class energy research facilities. The country’s energy mix is a reflection of the current state of affairs.
Russia has one of the world’s largest nuclear plant fleets which is built and operated by state-owned Rosatom. A significant order portfolio for new plants both domestically and abroad is an incentive to develop and improve existing technologies. Therefore, nuclear energy is seen as an asset which through the process of electrolysis could be used to produce ‘yellow’ hydrogen.
Russian and Japanese officials and representatives of their respective industries are already in talks for cooperation opportunities. In this regard, Rosatom and Japan’s Kawasaki Heavy Industries intend to export the first shipment by 2024. The Japanese intend to expand their knowledge of the industry and build on the experience of importing hydrogen from their enterprise in Australia that will start operations in 2021.
Furthermore, Novatek, Russia’s largest independent gas producer, is already looking for new opportunities to supplement its LNG activities. According to CEO Leonid Mikhelson, the company is planning to build steam-methane reforming facilities on the Yamal peninsula to produce hydrogen. Additional carbon capture and storage projects will be required to produce so-called ‘blue’ hydrogen and meet the necessary standards. Mikhelson expects hydrogen to represent “a noticeable share in global energy consumption between 30 and 40 years from today.”
Russia’s unchallenged gas champion Gazprom, however, is pursuing a different path. The company already operates extensive pipeline infrastructure to Europe and is expanding capacity to China. Due to the lifetime of the pipelines, hydrogen could be used to extend operations well after natural gas has been phased out. Before pure hydrogen can be pumped, admixing is a good alternative to reduce the carbon footprint and meet the requirements of customers.
