By 2030 there will be over 200 million tons of hydrogen produced under the Net Zero climate change program. Hydrogen sales will generate revenues of over USD $400 billion, and will also generate hose sales for hydrogen production.
By Robert McIlvaine, President and Founder, the McIlvaine Company
The International Energy Agency (IEA) forecast for 2030 projects electrolysis as the largest production mode for hydrogen. This would be followed by fossil fuels, mostly natural gas, without carbon capture. An equal amount will be produced with carbon capture and sequestration. A relatively small amount will be produced with carbon capture and beneficial utilization.
McIlvaine believes that biomass including waste can be a significant source of hydrogen. An analysis has been prepared based on the production of 20 million tons of biomass based hydrogen by 2030.
Hose and Coupling sales for hydrogen production could exceed USD $2 billion in 2030. One variable is the mix of technologies. The relative hose and coupling revenues per ton of hydrogen for electrolyzers is tiny compared to fossil with CCS. Therefore, electrolyzers will not be a significant source of hose and coupling revenue compared to the other production sources. Note that there will be a substantial market for hoses for hydrogen fuel cells in transportation but that is not included here.
This analysis includes only applications in production and delivery and not use.
The hose and coupling market will be a function of the production technology choices. Relative hose and coupling purchases have been compared for production, carbon capture and sequestration, transportation including liquefaction and storage.
Hose and Coupling purchases for the production of electricity using solar energy and electrolyzer technology are rated as the base number. Since ten times more is spent on the transportation and storage, there is no need for carbon capture. So the total hose and coupling purchases are 11 times the purchases just for production.
Most renewable technologies other than biomass have no need for carbon capture and sequestration. Biomass has the highest total investment in hose and couplings, but it is carbon negative. In terms of the total hose and coupling market, BECCS results in fewer hoses and couplings needed compared to natural gas. On the other hand, as a carbon negative option it could displace some investment in solar.
Ammonia is a special case. Production costs are high but carbon capture and sequestration costs are relatively low.
Transportation and storage costs are relatively low due the avoidance of liquefaction and other challenges moving hydrogen.
The forecast of USD $2 billion in hose and coupling sales is based on the mix creating a relative hose and coupling investment of 20 in 2030. Since the potential total ranges from 11 to 40, the production choice will be a big variable. Likely, yearly hose and coupling sales could be as low as USD $1.8 billion to as high as USD $2.4 billion. The extremes would be a low of USD $1.1 billion and a high of USD $4 billion.1
It is difficult for purchasers to select the best hose and couplings for these applications due to the lack of experience in this field. There is a hierarchy in the value of the type of cost factor which can be communicated. The following is a list from lowest to highest:
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- General cost factors: such as the cost of electricity in a particular location.
- Specific process cost factors: The risks for leakage and combustion need to be addressed.
- Product task cost factors: At the next highest level there are factors associated with the product task e. g. larger sized hoses and couplings needed due to the nature of the hydrogen gas. There are selection challenges for the very low temperatures of cryogenic hydrogen. Where should metal be selected over composite materials Is reinforcing necessary?
- New unresolved cost actors: All the factors regarding materials of construction and sizing are unresolved because of the fact that many of the applications are new. You can not necessarily assume that the factors long established relative to refinery hydrogen are applicable to these new applications.
- Disputed factors: The highest value is in addressing “Unresolved factors in dispute.”
- the supplier of a new polymer based hose says it is unique because it combines ultra-high-pressure functionality with the minimal effusion and flexibility. Other suppliers will not agree. Their counter views are important to hear.
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Each hose and coupling supplier provides reasons why his product offers the lowest total cost of ownership. The purchaser is challenged to sort out which claims are most accurate. This challenge is best met by connecting the suppliers, users, consultants, and media in an organized way through the Industrial Internet of Wisdom. Future articles in Hose & Coupling World will focus on these disputed factors based on supplier and expert input.
Reference
1. Hose + Coupling World Market published by the McIlvaine Company
ABOUT THE AUTHOR
Bob McIlvaine founded the McIlvaine CoMpany in 1974 and oversees the work of 30 analysts and researchers. He has a BA degree from Prince-ton University.