➡️ Tell us about Worley. Where does the company position itself in the hydrogen market?

We’re a global professional services company. We work across the energy, chemicals and resources sectors. Headquartered in Australia, we’re about 50,000 people currently. We support our customers throughout the asset lifecycle, from early consulting and strategy development to project and design execution. Our involvement continues through commissioning, operations, decommissioning, and remediation, tailored to meet the unique needs of each sector.

From a hydrogen perspective, that holds true for hydrogen as well. That’s where we’re trying to position ourselves in hydrogen. Obviously, at this stage, the projects are in the early development phase. [We’re] trying to get the projects off the ground and trying to support our customers to make projects viable, and then into the execution and delivery phase of the projects.

➡️ What key hydrogen projects are Worley involved in? Are there any locations you are focusing on?

We’ve worked on multiple hundreds of projects. Obviously, a lot of those have been in that early phase. So there aren’t so many projects that have gone through FID and into execution. Globally, we are involved in projects in all of the major areas where we are seeing hydrogen developed. I guess the best example that we’ve got of a project at an industrial scale that’s gone through FID and into execution is Shell’s Holland Hydrogen 1 – a flagship project for Shell and for us as well. We’ve been working on that project from the early days and we’re currently supporting the execution – the engineering, procurement, and construction of that project. It’s quite a long way through construction now. That’s probably the biggest example. We’ve got a number of other examples, but not too many that have gone through FID.

We operate globally. Obviously, we’re focused on the areas where we see the most potential, from a hydrogen perspective, for those projects to move forward. So, Europe is a strong area of focus. North Africa, the Middle East, areas of Latin America, North America and Australia have been areas of focus as well. But, I guess we’re seeing the most progress in North America, Europe, North Africa, and the Middle East.

➡️ In your view, what are the most promising applications of green hydrogen in the near and long term? Which sectors do you see hydrogen playing the most important role?

If you can electrify directly to decarbonise, then you should be doing that. That’s the most efficient, simplest way to do it. So really, the converse of that is the areas where you can’t electrify to decarbonise are going to be the most promising areas. That would play into things like the process industry. For Shell, for example, the molecules there are intended for their refinery to help decarbonise the refinery. So, those kind of process industries that are hard to abate is an obvious example. Steel would be another example. Below that, I would say, the heavy haul transport, long-distance transport applications – aviation fuel, marine, shipping, and rail in some instances where it doesn’t make sense to electrify. Those kinds of applications, I think, are the ones that are at the forefront. Then, replacing grey hydrogen where it’s used with a cleaner source. When we look at projects and at the customers that we’re targeting, they’re the areas where we think it makes the most sense for those early projects to get off the ground.

➡️ The high cost of green hydrogen is one of the key barriers to scaling up. How can the cost be brought down?

That’s the major challenge and I think there are a number of areas of focus where it can be improved. The first is simply scale. In the work that we’re doing, we start to see projects where we’re producing numbers for customers who are trying to get to FID, we see that number coming down quite dramatically with scale because you’re spreading the cost of the infrastructure and the cost of the associated things that are required for that project over a bigger base. And that becomes just more efficient. So, that’s the first and obvious thing.

On the technology side, if you look at the electrolyser itself – if we’re talking about green hydrogen – the efficiencies of scale and just the efficiencies with the OEMs… In some cases, new technologies are being developed, or they’re making their technology simpler and removing expensive or hard-to-find materials from the technology. Or just [improving] the efficiency of the production – we start to see the OEMs automate their production facilities, for example, and start to reduce the cost of producing the equipment. That will obviously accelerate with scale.

Another topic is around the balance of plant. It’s not just the electrolyser itself, but all of the other equipment that’s required to put together a functioning hydrogen unit. That’s an area where we’re working quite aggressively to standardise, to work with supply chain partners, and to look at lower-cost sources of equipment to try to get to a minimum viable product solution so that we’re not over-engineering or over-designing the equipment that is required to make it fit for purpose. All of those areas need to come together to really get the cost curve down. It’s a bit of a ‘chicken and egg’ situation because you need projects to go through FID to be able to put that in play and start to make some of those things happen. They are the top topics that I would pick out for trying to get that cost down; there’s not a single silver bullet. It’s a combination of all of those things working together to make it more commercially viable.

➡️ What role, if any, do you see regulations playing in bringing the cost down?

Currently, there is no global hydrogen market. So, from a government-level perspective, there’s help needed to create that global market. From a regulatory point of view, the whole ‘carrot and stick’ approach, I think, is needed. A combination of regulation and policy plus incentive and subsidy together is required to help move the dial. The more that we can get that to operate on a global basis – if we’ve got consistency in the way that incentives, policy, and regulation are being deployed – the better for the industry. It’s a really important factor in moving this forward.

➡️ Large-scale green hydrogen production is often seen as a way to bring down costs. How soon do you see green hydrogen reaching economies of scale and how can we get there?

It is difficult to put an exact date – I don’t think anybody can do that. But, the reality is, we’ve seen this move to the right. If you asked me that question four years ago, I would have been saying probably around now. And the reality is, it has moved to the right. If you look at real projects of scale, NEOM [in Saudi Arabia] is a gigawatt scale project which is currently quite a long way through construction. So we’ve seen one example of it happening. There are several projects that we see being developed at the minute, particularly in North Africa and the Middle East, where I think they stand a real chance in the next one to two years of taking projects through FID, and that will be a game changer. You don’t need too many of the multi-gigawatt-size projects to make a difference in the industry. A couple more NEOM-type projects and you’re starting to sort of move forward. I can’t put a date on it, but, hopefully, we start to see one or two more move through FID in the next couple of years.

➡️ In recent months, we’ve seen several hydrogen projects shelved and companies scaling back their ambitions. Against this backdrop, are you still  optimistic  about  the  future  of  hydrogen, and if so, what keeps you confident in its long-term potential?

Fundamentally, if you believe in the 2050 targets [for net zero], and you believe that the world is going to move in that direction – which I think it has to, and I think it will – as we understand the world today, hydrogen has to be part of the solution to decarbonise the hard-to-abate industries. There is no other sensible way to resolve some of the challenges – obviously, not all of them, but some of the challenges.

We are seeing projects move forward. We’re seeing projects move through FID, and we’re seeing actions and activity happen that are bringing the cost down, albeit, not as quickly as we need. I think the industry is going through a bit of a reset at the minute; there’s a bit of realisation around some of the projects that have been proposed that are just more expensive than make sense to finance. So, we’ll see projects that are sharper, where the costs have come down. I think it will be a smaller number of projects than we have seen announced. There’s been an awful lot of announcements in the last few years, and I think there’s a reality check happening a little bit. But, coming out of the end of it, we’ll see some projects move at scale, we’ll see some projects that move forward on a different cost base, but fundamentally, we have to see this move forward to achieve those targets that the world is trying to achieve. So, a degree of optimism, but with some caution as well.