Issue link: https://maltatoday.uberflip.com/i/1474118
8 NEWS 21.7.2022 W ith the worst of the COV- ID-19 pandemic considered to be over, people are now facing a new obstacle to growth as oil and gas prices are again at a high peak. is is another obstacle to fast recovery and re- turn to normality. At the same time, countries are facing the uncertainty of supply chains follow- ing the Russian invasion of Kyiv, which has resulted in shortages of grains and fodder trapped in silos in Ukraine. is has created an artificial shortage. In past months, due to rushed de-car- bonisation policies, oil giants stopped investing in new upstream projects and focused only on active fields. It goes without saying that as interim meas- ure, this leads to a shortage of oil, rather than an abundance of it, even the frack- ing oil producers in the US have now upped their output. Lower investment in oil has a spillover effect on the production of natural gas, which is often a by-product of drilling for crude. Added to that is a dearth of liquefied natural gas terminals for ship- ping gas from places where it remains relatively easy to access. is has pushed the price for LNG to record highs. Watch the headlines in Britain where, due to a shortage of drivers to deliver petrol, there has been an acute short- age of fuel that has caught the world's attention. Many angry motorists were suffering due to a shortage of lorry driv- ers that forced the UK government to use the army as a temporary measure to deliver petrol supplies to pumps. Turn to Asia and shortages have led to power cuts in parts of China, this time, not due to shortage of fossil fuel at the utilities but from attempts to curb emissions by repeated curfews. With dwindling coal stocks at power stations in India, these conditions led to a surge in the price of imports of the commodity. Back home, the price hike does not au- gur well for Enemalta, which is buying electricity from the Electrogas monop- oly contracted on a fixed term. Electro- gas buys its LNG exclusively from So- car (a state company in Azerbaijan and shareholder in Electrogas), which in turn, not having its own supply of LNG, procures it on the international market. As a temporary measure the finance ministry is subsidizing Enemalta to avoid inflation in its products to the public. Some expect that the problem will solve itself when the planned gas pipeline to Italy is ready to supply us with cheaper green hydrogen. As can be expected, the EU favours the use of clean fuel and wants us to cut down on the burning of fossil fuel. By the way, Germany also generates 40% of its electricity from buying Russian gas. By sheer contrast, investment on renewables in Malta is modest with a mere 8% to 10% of electricity generat- ed from clean energy such as PV panels but no turbines are in use. For an island, which is almost 100% reliant on trans- port powered by fossil fuel, this situa- tion calls for a plan encompassing a sci- entific but speedy plan to de-carbonise. An ideal option is to use renewable energy to produce green hydrogen by attracting foreign investors to set up in the EEZ (particularly Hurd's bank) installing sophisticated infrastructure. Renewable hydrogen is created by using electricity to split water into hydrogen and oxygen through a process known as electrolysis. e hydrogen is collected and used, primarily in industry, while oxygen is released as the by-product or captured for use by others. Advances in technology have made it possible to de-carbonise the entire fleet replacing internal combustion engines by a technology called a hydrogen fuel cell that uses hydrogen as its power source. Powering these vehicles with renewable hydrogen makes them truly zero-carbon. ere are many reasons that speak for hydrogen: such as meet- ing climate targets for 2030, greenhouse gas neutrality targets for 2050. Back to Germany, its national hydro- gen strategy of 2020, highlights the po- tential and the opportunities of green hydrogen. e core mission is to replace fossil fuels particularly gaseous and liq- uid energy sources, which are an inte- gral part of Germany´s energy supply. e federal government has been aware of the potential of hydrogen technology for many years and has made available considerable funding and subsidies. Under the National Innovation Pro- gramme on Hydrogen and Fuel Cell Technology, a total of €1.4bn in funding is currently being provided and €310m will be provided under the Energy and Climate Fund for practice-oriented ba- sic research on green hydrogen. Ger- many adopted a package for the future which makes available another €7bn for speeding up the market roll-out of hydrogen technology and another €2bn for fostering international partnerships. ese are only some of the efforts be- ing made by the German government to succeed with its hydrogen strategy. Focusing on Germany one meets with examples of the use of hydrogen tech- nology: some have existed for years. In the east of Germany, the hybrid power plant in Prenzlau produces hy- drogen with surplus wind and solar kilowatt-hours and uses it as storage. In Brandenburg, the coal-dominated energy region of Lausitz is to become a hydrogen region. ere are plans for a further 800 wind turbines to drive for- ward the production of green hydrogen. Hydrogen technology also seems very promising in terms of CO2-free inland navigation. Since 2015, the Berlin-based company H2Mobility has been building a Germany-wide filling station network for hydrogen particular of interest for bus operators and haulage companies. Most notably, more and states are building and installing hydrogen-ready pipelines to be connected to the nation- wide supply network in the future. Even though hydrogen technology is expen- sive and not affordable for all, the cost trend of the fossil energy and natural gas prices is becoming prohibitive. Optimists predict that hydrogen will be the more affordable solution in the long run. How Germany plans energy conversion to green hydrogen George Mangion George Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have made PKF instrumental in establishing many companies in Malta and established PKF as a leading professional financial service provider on the Island German energy company STEAG is building a green hydrogen electrolysis plant to help produce decarbonized steel