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Shell's (RDS.A) Green Hydrogen Electrolyzer Comes Online in Germany

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After building it for two years, Royal Dutch Shell plc (RDS.A - Free Report) recently completed Europe's largest hydrogen electrolysis facility of 10 megawatts (MW) at its Rheinland refinery's Wesseling location, thus pushing deeper into alternative energy.The oil major began producing green hydrogen at its Energy and Chemicals Park at Rheinland in Germany.

Known as the Refhyne project, the fully operating plant is the first refinery to employ this technology on such a big scale. This initiative sets a new paradigm for lower-carbon energy generation that may be implemented globally.

Shell aims to be a net-zero-emissions energy company by 2050, in line with the society's goals. It wants to restructure its refinery footprint into five key energy and chemicals parks as part of its Powering Progress strategy. As a result, Shell will cut traditional fuel output by 55% within 2030.

The plant will generate green fuels as part of a European Union-backed consortium that is already planning a 100-MW facility near Cologne to expand its commercial operations. When hydrogen is generated from renewable energy sources such as wind or sun through electrolysis, it is called "green" but "grey" hydrogen derived from fossil fuels is used as a feedstock in many conventional industrial processes nowadays.

Green grade hydrogen is projected to be instrumental in energy, mobility, heat provision and difficult-to-decarbonize industries, such as steel and cement under the EU Green Deal climate objectives. Shell also plans to build a facility in Wesseling to generate sustainable aviation fuel from renewable energy and biomass along with a liquefied renewable natural gas plant (bio-LNG).

Shell aspires to be Germany's top green hydrogen provider for industrial and transportation clients. The polymer electrolyte membrane (PEM) electrolyzer will employ renewable energy to create up to 1,300 tons of green hydrogen per year, which will be used to make lower-carbon fuels and eventually decarbonize other industries.

The plant is cost intensive at $23.72 million with half the amount coming from EU funding. Apart from Shell, the collaboration includes electrolyzer manufacturer ITM Power, research organization SINTEF, and consultancies Sphera and Element Energy.

Company Profile

Shell is one of the primary oil majors, which constitutes a group of U.S. and Europe-based energy giants with global operations. The company is fully integrated as it participates in every aspect related to energy from oil production to refining and marketing.

Zacks Rank & Key Picks

Shell has a Zacks Rank #3 (Hold), currently. Some better-ranked players in the energy space are Matador Resources Company (MTDR - Free Report) , Baker Hughes Company (BKR - Free Report) and Oasis Petroleum Inc. (OAS - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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