The fuel use data in the Exhibit below is very much a function of geology and the good and bad luck associated with it. The large hydrocarbon users' consumption patterns are a function of what they have – if you have a lot of coal, you use a lot of coal. The significant build-out of nuclear in France is partly because of Frances’ exceptional track record with the technology but also because the country does not have anything else to fall back on. Japan’s nuclear component was much higher before Fukashima. It is, however, worth noting the almost insignificant share of wind and solar anywhere, and then to put this into context with the collective ambitions, not just for 2050, but for the much shorter 2030 targets.
Source: IEA – France 2021 – Energy Policy Review, November 2021
The European hydrogen projects summarized in the Exhibit below are for the most part dependent on renewable power, some of which is contained within the broader country targets, but much of it is not, and adding the private initiatives to the broader country goals, we would expect the overall demand for renewable energy to rise. Like CCS, we see much more talking than walking today with hydrogen; companies are announcing plans and then looking for either the partners or the grants (or both) to fall into place. Consequently, we foresee a logjam when these projects get through FID, with too many projects chasing wind and solar capacity expansions at the same time, which will result in capacity limitations at the wind and solar equipment makers, causing inflationary bottlenecks that may also extend back to the material suppliers. If this happens it will cause many of the projects to rethink their economics and we may see delays. If we are right, Westlake’s purchase of Hexion’s epoxy business could be very well-timed. See more in today's daily report.
Source: European Commission – Clean Hydrogen Alliance, November 2021
