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What is Russia's Hydrogen Strategy?

Hydrogen Power
11 March 2022

Before the invasion of Ukraine, Russia had ambitions to be a global leader in the production of hydrogen. It has committed hundreds of millions of dollars, euros and roubles to research, development and production. Daniel Lynn looks at the details and asks questions regarding the direction of future energy in the West.

Daniel Lynn was born in London in 1982. He was educated at Oxford Brookes University earning a BA followed by a Masters Degree. He now writes and studies the global and UK energy industries, particularly from the view of closely observing and commenting on the current transition from fossil fuels to NetZero. ThisWeekinFM's guest writer for Energy Transition Updates, he brings you stories on power production progress from around the world to provide a better understanding of the current levels of action and investment being undertaken by national governments and large companies to decarbonize international energy supplies. 


"For several years now Russia has been investing significant sums in alternative energy sources that can be sold on the global market. These investments are mostly concentrated in renewable sources of energy such as sun, wind and wave energy production and the manufacturing of hydrogen. Taking recent events into consideration, can these Russian ambitions now be realised?"

– Daniel Lynn
Good Publicity


Energy sources in the form of natural gas and crude oil have been the financial funding of Russian military ambitions as seen by its invasion of Ukraine. Russian oil and gas are also Russian tools of negotiation weaponry. In countering Russian aggression widespread international economic sanctions have been imposed on their economy and multiple EU states will now accelerate national plans to locate alternative sources of secure energy.

If military action continues and major European states abandon Russian gas and oil exports, the Moscow controlled economy will require residence and access to a future green energy market to replace lost revenues formerly attained through fossil fuel and gas production.

For several years now Russia has been investing significant sums in alternative energy sources that can be sold on the global market. These investments are mostly concentrated in renewable sources of energy such as sun, wind and wave energy production and the manufacturing of hydrogen. Taking recent events into consideration, can these Russian ambitions now be realised?


Global Shock


The events on the Ukrainian border have sharpened UK and European focus on political and economic stability, and energy security. Russia ranks 3rd in the world for oil production, 2nd for gas production and 1st for holding gas reserves.

Various dominant European economies are reliant on Russian gas imports, with around 40 per cent of EU natural gas supplies originating from there: amongst those European countries facing immediate natural gas issues are Poland and Germany. Poland is attempting to wean itself from Russian gas and Germany may consider permanently abandoning the NordStream 2 pipeline altogether.    

If, or more likely, when, major European economies decide on significantly reducing their Russian gas and oil imports, Russia will maintain a desire to remain a dominant presence within the global energy market. A part of the national strategy of retaining global energy super-power status has been identified through mass hydrogen production and exportation.


Russia’s Power Forecasts


In the next three years, Russia had planned to invest Rb9 billion ($127 million) in the development of technologies that will enhance hydrogen production, storage and transportation. By the mid-21st century, Russia aimed to export up to 50 million tonnes of hydrogen global projected to be worth between $23 billion to $100 billion per year to the future Russian economy. Russia’s ultimate ambition is to attract 20 per cent of the overall market share.

Since recent developments in Ukraine, the above-mentioned ambitions and economic figures could be viewed as being entirely attainable, considering Russian energy experience as well as governmental, private and foreign investment. Now international economic sanctions have been diversified and tightened, it is doubtful that there is too much optimism inside the Ministry of Energy of the Russian Federation concerning future hydrogen targets.    

Regardless of target success, initial plans envisaged the creation of three separate hydrogen clusters that draw upon the European model of hydrogen valleys. The three proposed Russian regions chosen to base hydrogen facilities will be the Far East (Sakhalin Island), North West (St. Petersburg) and the Arctic region.   


Sakhalin’s Example of Potential


Out of these three regions Sakhalin, which is off the Pacific coast between mainland Asia and Japan, has undergone significant development. Russian state-owned energy company Rosatom and 50 per cent state-owned gas provider, Gazprom, have signed an agreement to work together to advance blue hydrogen production in the area.

Sakhalin Island aims to become carbon neutral in just three years. To achieve this goal a number of various plans are being pursued, including the use of hydrogen fuel cell trains. A pilot batch of seven trains is being designed and developed along with appropriate refuelling infrastructure.

By 2024 a large-scale blue hydrogen plant is planned to be constructed in Sakhalin where exportation of the final product can begin in 2025. The initial production capacity will be around 30,000 tonnes per year. 2030 will see blue hydrogen manufacturing increase to 100,000 tonnes yearly.

Due to the proximity to Asian markets, it was hoped that Japan would agree to import vast amounts of Russian hydrogen originating from Sakhalin. Russia is targeting to supply as much as 40 per cent of Japan’s total hydrogen imports. South Korea will also be a future targeted Pacific region hydrogen market.


Further Developments


A North-western cluster is planned to be established in St. Petersburg and concentrate on introducing hydrogen across multiple sectors. Hydrogen will be utilised in industrial processes throughout the steel and cement industries and will also be deployed to local transportation.

Russian officials are considering constructing a green hydrogen manufacturing plant at St. Petersburg nuclear power station. Estimates in cost amount to 55 billion roubles – 612 million euros. It has been reported that Gazprom is planning to export hydrogen through its existing gas pipelines to Europe. Considering recent events, this idea is unlikely to materialise in the immediate future.     

A third hydrogen cluster is being planned for the isolated Arctic region of Russia. This region is not connected to the Russian national grid and uses expensive and ecologically harmful diesel as power. As a result, a number of pilot projects have been launched to introduce cleaner and cheaper fuels to the local population. Russia’s largest federal region – the Sakha (Yakutia) Republic, is working alongside Moscow Bauman Technical University to produce renewable hydrogen for energy storage.

Also, in Russia’s Arctic region construction has begun on an international hydrogen research centre.

The project costs $27 million and will be referred to as Arctic Hydrogen Energy Applications and Demonstrations (AHEAD). The research centre will be powered by renewable energy. Researchers plan on building wind-powered electrolysers to generate hydrogen from water. This facility will be capable of holding 100MWh of hydrogen storage. It is hoped the research centre will be operational by 2024.


A Restricted Roadmap for Exports


Russia’s national hydrogen road map is firmly concentrated on export, in an attempt to retain revenues connected to the energy sector. As of writing, military actions have already affected global oil and gas prices. Additional costs on a range of products are expected to rise.

Although Russia is implementing plans to introduce hydrogen as an export commodity, in the face of significant international sanctions and the threat of wider war still present, how much of these hydrogen ambitions can be fulfilled is subject to pessimistic speculation. If military tensions spread to other NATO states progress of European decarbonisation will be delayed and possibly postponed until peace returns.      

In the short-term UK national fuel supplies are fairly secure and different avenues of gas importation are being discussed. Thinking of the future, sense and logic scream that Russian gas and oil, as well as billions of oligarch money, will no longer be sought after by EU states until a significant turn towards democracy is governmentally embraced.

Estimates put the daily cost of Russia’s incursion into Ukraine at $20 billion per day. Russia has not only jeopardised European and world security but has also potentially sabotaged its own economy and further alienated itself from a future hydrogen economy, in which Russia has planned to command a domineering role. If there are calls for EU nations to boycott Russian oil and gas now, it is fair to doubt that future Russian hydrogen will be in high demand if military engagements continue.   


Picture: a photograph of a hydrogen power project. Image credit: shutterstock licensed.

Article written by Daniel Lynn | Published 11 March 2022


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