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COMMITTED TO THE ENERGY TRANSITION BY HELPING FOSTER THE ROLE OF HYDROGEN SOLUTIONS

28/01/2020

By joining the Hydrogen Council, Societe Generale demonstrates once again its commitment to a sustainable and climate resilient future. Discover how hydrogen will assist in the energy transition and what role the bank will play.

Launched at the World Economic Forum in Davos in early 2017, the Hydrogen Council is a CEO-led initiative to foster the role of hydrogen solutions in the global energy transition, thereby fighting global warming by decarbonizing energy systems and industrial processes in pursuit of both the Paris COP21 Accords, and the UN Sustainability Development Goals.

The Hydrogen Council now gathers more than 81 multinational companies from diverse industry and energy sectors along the hydrogen value chain such as utilities, energy, oil & gas, chemical, industry feedstock, metals and mining, automotive & trucks, OEMs, and other transports (aeronautics, trains, shipping).

Each of the founding member recognizes the huge potential “clean hydrogen” offers to meaningfully cut greenhouse gas emissions, in particular the “hard to abate” sectors less easily addressed by other options as heavy transportation, space heating and industrial processes. For quite some time, hydrogen solutions have been mature and ready to scale-up; now it is time to work together to make “clean hydrogen” an economic reality.

We are very excited to join the Hydrogen Council. Hydrogen has tremendous potential to build carbon-free value chains, adapted to the needs and circumstances of different regions with different resourcesBuilding these value chains presents opportunities for developing an entire new industry. True to our commitment to the energy transition, we are delighted to join our clients in this collective leadership role.  Olivier Musset, Global Head of the Energy Group 

To attain the vision of a commercially viable “clean hydrogen” economy, very substantial smart investments and innovative financing will be required to deploy hydrogen technologies on mass scale.  Societe Generale played a leading role in the debt and equity structuring and financing of the scaling-upof earlier energy transition technologies such as solar, offshore wind (both fixed and floating), carbon capture & storage and batteries. Therefore, the Bank plans to use the strength of its equity and debt advisory and financing franchises to enable the structuring and funding of large-scale hydrogen projects.

We have thus joined the recently created Investor Group of the Hydrogen Council, comprised of banks and other financial institutions. We are actively working within the Hydrogen Council “Finance Project Team” to advise on innovative financing schemes and make recommendations on the required policies to help bring the hydrogen economy to fruition. Olivier Musset, Global Head of the Energy Group 

Historically made from natural gas or coal, hydrogen is an abundant resource and a versatile energy carrier, with demonstrable value. It has been used in large quantities for many years in the ammonia and petroleum refining industries. The fuel cells that convert hydrogen and oxygen from the air into electricity and water have been around for more than 50 years.

Today, the key is decarbonizing hydrogen production and to this end here are multiple routes:

  • Electrolysis: in instances of abundant low cost renewable power, or where there is a periodic excess of renewable electricity production which can be used to produce hydrogen rather than curtailing generation, “near carbon-free” hydrogen can be produced from water by electrolysis.
  • Steam reforming with CCS: featuring hydrogen production processes (e.g. from natural gas or biogas re-forming) where the produced carbon dioxide is removed by “carbon capture and storage”, which deliver “low carbon” hydrogen.

From there, decarbonization potential through applications of this “clean hydrogen” is endless, such as:

  • By displacing coal, oil and gas in a vast range of sectors: steel, refineries, cement, agriculture, etc.
  • Transportation (from buses, trucks to mass transit including trains, or airplanes and ships);
  • Building heat (residential, commercial and public);
  • Long-term energy storage: offering efficient, large scale, integration and storage of intermittent renewable energy, while providing energy security;
  • Distribution of energy across sectors and regions.

By 2050, hydrogen could meet up to 18% of the global energy demand and cut carbon emissions by 6 Gt every year which represents 13% of global emissions. Virtually all the OECD governments and the IEA have identified hydrogen as a crucial contributor to their national energy transition strategies and roadmaps. To fully unlock hydrogen’s potential and value, governments and policymakers are fundamental to provide the necessary enabling environment including appropriate legislative and stable regulatory frameworks, and financial incentives.

As mentioned above, Societe Generale is working in the Hydrogen Council to develop financing schemes for a range of archetype projects. However, few large scale hydrogen projects have yet reached the point of requiring significant levels of debt funding or large equity deployment, due to the fact that “clean hydrogen” is not yet price competitive.

Given the unprecedented momentum that “low carbon” hydrogen has now built up, we are convinced that mandates will soon materialize. Societe Generale is already in discussions with its clients on various opportunities, either assisting them in defining their hydrogen strategy, meeting with potential partners and clients, or discussing the structuring and funding of future hydrogen projects, stay tuned!  Louis-Aynard de Clermont Tonnerre, Global Head of Power, Utilities & Infrastructure Industry Group

Press release:  Societe Generale joins the Hydrogen Council, supporting the development of hydrogen for energy transition- 15/01/2020