Loïc Jaegert-Huber: “The hydrogen industry will take longer to develop”

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Loïc Jaegert-Huber: "The hydrogen industry will take longer to develop" © Engie

While the world's energy giants are stepping up their efforts to accelerate the development of hydrogen, new studies and feedback suggest that this nascent sector will take even longer to decarbonise the world's economies. This view is shared by Loïc Jaegert-Huber, Regional Director of Engie North Africa. In this interview, he also discusses the energy transition and the use of seawater desalination to deal with water stress in North Africa.

While the world’s energy giants are stepping up their efforts to accelerate the development of hydrogen, new studies and feedback suggest that this nascent sector will take even longer to decarbonise the world’s economies. This view is shared by Loïc Jaegert-Huber, Regional Director of Engie North Africa. In this interview, he also discusses the energy transition and the use of seawater desalination to deal with water stress in North Africa.

Jean Marie Takouleu: Engie is one of the independent power producers (IPPs) currently active in North Africa. Is the energy transition a reality in this part of the continent?

Loïc Jaegert-Huber: As you know, Engie is present in around thirty countries around the world. In Africa, mainly in Egypt, Morocco and South Africa. Engie is also present in sub-Saharan Africa in decentralised energy (through Engie Energy Access, editor’s note). Our goal is to be carbon neutral by 2045, both for ourselves (Engie) and for our customers. We are fortunate to have a balanced energy mix, an alliance between the molecule and the electron. In fact, it’s not just electricity, it’s also gas, which is increasingly being used as a transitional energy.

Despite the gas debate?

We consider gas to be a transitional energy, because its vocation is to become green as quickly as possible. That’s why we’re one of the world’s leading players in biomethane. There’s also green hydrogen, and natural hydrogen (or white hydrogen, editor’s note) which is present underground. Morocco is one of the countries with the greatest potential for this type of hydrogen.

What about the energy transition in North Africa?

We believe that North Africa is fully committed to an energy transition that is both promising and exciting, with many challenges. But very clearly, it’s a region with considerable potential, with ideal conditions for developing renewable energies, a considerable amount of sunshine, very good wind conditions, but also a general awareness of the urgency of climate change, which requires an ambitious response.

We can see this in Morocco’s royal vision. At COP27 in 2022, we also saw the emergence of an Egyptian ambition for the development of renewable energies. We believe that North Africa has all the keys to becoming a sustainable energy hub between Africa, Europe and the Middle East. Engie is already involved in the region, with projects both operational and under development. This is a very good start, but much remains to be done.

There is a certain dynamism in this region, particularly in Egypt and Morocco. But recently, Algeria launched a call for tenders for 2,000 MWp of photovoltaic solar energy. This is the first step towards clean energy. Does Engie intend to invest in this sector over the next few years?

In the medium term, in North Africa, we will be focusing more on Egypt and Morocco. Obviously we’re talking to the Algerians, but more about gas supplies.

In Egypt, wind turbines represent a danger for migratory birds that leave Europe to spend the winter in Africa, crossing the Gulf of Suez where you are currently building a 500 MW wind farm. Are you concerned about this?

Biodiversity is an essential component of our projects. We have experts working to ensure that our projects have as little impact as possible on flora and fauna. Of course, bird migration is very important and we do take that into account. This parameter was well taken into account before launching the works, even more so now with the experience of the first 262 MW project.

So we have to take account of the trajectory of these birds when choosing the location, the spacing of the turbines and the orientation of the blades. Changes can also be made over time. Taking biodiversity into account also means working with local environmentalists, who help us with their knowledge of the terrain.

Engie is increasingly responding to calls for tenders to build desalination plants. How do you explain this interest in seawater desalination in North Africa?

You will certainly be surprised, but we are one of the world leaders in seawater desalination. So we are pioneers in this field.

But not in North Africa?

Yes, more in the Middle East. But in Africa, we are launching reverse osmosis units coupled with renewable energy. Today, we need desalination plants that have less impact on the environment. We are therefore committed to building only desalination plants powered by renewable energy, in Africa and elsewhere in the world.

For example, the Dakhla desalination plant (in the Western Sahara, editor’s note) will be coupled to a 72 MW wind farm, with a production capacity of 112,000 m3 per day, producing fresh water for irrigation and domestic supply. In these major projects, we play the role of developer and integrator.

Engie wants to continue to be a leader in this sector in order to respond to the problems of water stress.

Given its energy consumption and impact on the coastal environment, is desalination really a virtuous solution?

Desalination is a solution of last resort. We are trying to find the most suitable sites for building plants. We are also doing more and more research and development (R&D) on the subject, in particular on the reuse of brine (water with a high concentration of salt, discharged by desalination plants, editor’s note), so that it is not discharged directly into the sea.

And when it is discharged, we have to work on the rate of discharge to ensure that the salinity does not have too great an impact on marine ecosystems. We also need to find the right place to do this, by targeting ocean currents so that they can spread the salinity as quickly as possible. We are also exploring ways of using brine.

What can these brines be used for?

They can be used in many processes, particularly in the chemical and cement industries. In some countries, brine can also be used on mountain roads in winter.

Engie is a member of the Green H2 Cluster. At the same time, the Group has begun its hydrogen activities on the continent, at the Mogalakwena mine in South Africa. Are you planning to launch large-scale production of green hydrogen in Africa over the next few years?

As a gas company by origin, Engie has the necessary skills to develop low-carbon hydrogen and related molecules (ammonia for fertilisers, sustainable aviation fuel, methanol for bunkering ships, editor’s note). We are currently developing around a hundred renewable hydrogen projects in more than 15 countries around the world, 30 of which are dedicated to production.

The project at the Mogalakwena mine involves decarbonising large mining trucks using green hydrogen. We are currently developing multi-sector systems for local needs and for export to Europe and Asia. We are also studying the potential of white hydrogen, which is present underground, particularly in Morocco.

Hydrogen is already seen by some as a means of subjugating Africa, since most of the mega-projects announced on the continent are intended for export. What’s your view on this?

The challenge is to find the right balance between renewable energy for local needs, desalination for drinking water supply and irrigation, and hydrogen for export via water electrolysis. But the potential is such that these renewable energies can be used both for local needs and for export in the form of hydrogen and other by-products.

The advantage of exporting is that it is more expensive, and for governments, it’s a discussion to be had on decarbonising the energy mix, and how to ensure that local populations benefit from these resources.

Have there already been any major advances in the development of this sector worldwide?

As you can see, we’ve been talking about green hydrogen for several years now. In 2017 and 2018, there were visions, with pilot projects envisaged in some countries, notably in South Africa with Engie’s initiative at the Mogalakwena mine. In 2019 and 2020, everyone started talking about it, especially in Europe, where hydrogen was at the heart of several post-Covid-19 policies. In 2021 and 2022, there was a real global hydrogen fever, with countries defining their hydrogen strategies. This is the case of Morocco and Egypt.

The targets for 2030 have been confirmed and set in stone, with ambitions revised upwards. Strategies are also being updated and refocused on industrial uses. A major battle is being waged between the United States of America and Europe, demonstrating that the green hydrogen economy is gradually being unleashed, with regulations gradually being put in place.

And then, in 2023, there are a number of trends that can be observed, with larger and larger projects being set up, with the idea that it is economies of scale that will be the key to profitability. Policies and strategies are increasingly focusing on large-scale hydrogen infrastructures, particularly for transport and storage. The first projects showed that electrolysis systems were somewhat complex.

And new studies are calling into question the level of maturity of the projects. The hydrogen sector will therefore certainly take longer to develop, including in North African countries. However, there is very strong potential, and industrial players are looking for a very competitive price, which is not yet assured.

In the short term, Engie will target a few flagship projects, of medium or large size, to test itself and meet all the industrial and technological challenges.

So large-scale green hydrogen by 2030 is far too early?

The goal of producing hydrogen on a large scale by 2030 is a bold one, because electrolysis technologies are not yet fully mature enough for GW projects. I’m not pessimistic, quite the contrary. But this optimism needs to be seen in the context of all the projects that are being set up, with a choice that is also financial, to focus on a few projects initially. North Africa and the Middle East have their cards to play because of their exceptional conditions.

Interview by Jean Marie Takouleu

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