WILL KAMCHATKA BECOME RUSSIA'S LARGEST RENEWABLE ENERGY CENTER? Russian and foreign businesses believe that this is possible 18.10.2023

Foreign business is interested in Penzhin hydrogen.

The interview was released a few weeks after the signing of a quadrilateral agreement on cooperation in the implementation of the Hydrogen Energy Cluster project at the VIII Eastern Economic Forum. Besides Alexey Kaplun, the document was signed by Marina Yakutova, CEO of Development Corporation of Kamchatka, heads of South Korean energy companies JI-TECH Co., Ltd and SEL CHEM CO., LTD. Ham Suk Hoon and Lee Seo Baek.

In an interview with a journalist of Expert, the head of H2 Chistaya Energetika, LLC. repeatedly emphasizes the actual importance of the Kamchatka project for the global market of green hydrogen produced by hydrolysis, the deep interest in its implementation of foreign companies, their willingness to invest significant funds in the creation of the cluster. We are talking not only about investors from Korea who signed the agreement, but also businesses from other countries. According to Alexey Kaplun, Chinese companies are actively interested in the project. Two years ago, when the Russian and world public first learned about the Kamchatka hydrogen project, entrepreneurs from China asked where to carry the money.

The entrepreneur believes that the main investors of the project will be Chinese and Korean companies. "Someone will be a technology partner, someone will be a financial partner. Someone – we already know who – will give an off-take contract (an agreement between a supplier and a buyer – auth.), because it's pointless to start without it," Alexey Kaplun reports.

Two years ago, the investors were interested in the project and expressed their willingness to invest funds and companies from other countries in its implementation. The appeal about the subject to Vladimir Solodov and Development Corporation of Kamchatka was sent by the billionaire from Australia, the creator and head of Fortescue Future Industries, Andrew Forrest. A team of his employees visited Kamchatka in the summer of 2021, and as one of the richest entrepreneurs of the Green Continent reported in a letter to Vladimir Solodov, the team identified an excellent potential for a 100 GWT power plant in the Penzhina Bay area. Andrew Forrest also expressed confidence that the Kamchatka territory can become the largest renewable energy region in the Russian Federation. The billionaire considers the development of geothermal energy in the region to be a promising direction.

The preparation of an agreement between Corporation and Fortescue Future Industries on cooperation in the implementation of an energy project was interrupted by restrictions imposed by the collective West against the Russian Federation, but it is obvious that the interest of the Australian company in environmentally friendly green hydrogen and, in general, renewable energy in Kamchatka remains.

What the hydrogen project will give Kamchatka

Commenting on Alexey Kaplun's interview at our request, Marina Yakutova emphasized the uniqueness of the hydrogen project for Kamchatka, its social, investment, industrial, technological and scientific development.

Marina Yakutova is sure that the hydrogen-energy cluster is capable of radically transforming the north of the peninsula. It will give a technological boost, will require the emergence of new modern professions, will influence urban planning decisions, will form new standards of living. The creation of a non-freezing port in the Korf Gulf, focused both on the needs of the energy complex and on the prospects for the development of the Northern Sea Route, will mean the integration of the peninsula into global logistics. The combination of these transformations will lead to significant tax revenues to the consolidated budget, which means an increase in the standard of living of the entire population of the peninsula.

Alexey Kaplun also speaks about the economic, social and logistical multiplicative results of the project in an interview: "Such complex projects allow us to develop several industrial sub–sectors in parallel: our own construction base, the production of turbines and electrolyzers, and also create additional places of attraction for ships that sail along the Northern Sea Route and so on. From this point of view, oddly enough, hydrogen is not yet the most important final product of the project. And it is necessary to consider the project not as a separate, unexpected, distant place for hydrogen production, but as a new point of growth."

How to get hydrogen from a tidal power?

Experts in the financial and energy spheres in their responses to interviews note that in an interview with a journalist, the head of "N2 Clean Energy" for the first time presented an economic justification for the profitability of the project and its technical side that is accessible to the general public.

Alexey Kaplun reports that for hydrogen obtained by hydrolysis, the coefficient of energy return on the invested energy resource has more than a sixfold increase. The entrepreneur reports, that in such hydrogen there is six times more energy than was used for its production. The interview also highlights the environmental safety of the project across its entire technological line: from electricity generation to hydrogen production. The electrolysis method is not accompanied by polluting and harmful emissions accompanying the main product, as in the extraction of hydrogen through steam conversion of methane or through coal gasification. But the profitability of the hydrolysis method can only be ensured by cheap energy generation in significant volumes, which will allow to receive the tidal power plant in Penzhina Bay.

According to the project, the capacity of the first-stage power plant will be 300 megawatts. But, according to the interview, even these 300 megawatts make the station the largest tidal station in the world, because now the most powerful tidal station in Korea has 254 megawatts. The capacity of the second stage of the power plant exceeds 21 gigawatts. After the project is fully implemented, it will produce 1.2 million tons of hydrogen and 7.7 million tons of ammonia per year.

In the interview, Alexey Kaplun talks about technological and engineering solutions that will allow the project to be implemented: "We have determined which turbines should be used. By the way, this is a Russian production… We need ten–megawatt turbines for 300 megawatts of power. We will need 30 of them… We also made the main technical decisions on how the dam itself should look. These will be floating blocks. They can also be produced in Russia – both in Nakhodka and in Murmansk, and in other places where there are dry docks. We have calculated everything and even provided for fish-passing facilities in these blocks to minimize damage to nature."

A plant for the production of hydrogen and ammonia is planned to be built in the village of Tilichiki. Energy from generating capacities in Penzhina Bay will be supplied to the enterprise via power lines.

In addition to the power plant, the project provides for the construction of a large wind park near the hydrolysis plant. The capacity of its first stage will be 100 MWT. The electricity generated by it will allow the company to start producing hydrogen without waiting for the commissioning of the power plant and the completion of the construction of a power line from the coast of the Okhotsk Sea to the Bering Sea.

Alexey Kaplun has no doubt that his company, together with its partners, will be able to implement a project in which the entrepreneur estimates investments in hundreds of billions of rubles. Naturally, he hopes for help from the state, for the use of a wide range of business support measures formed in Kamchatka. Alexey Kaplun does not hide the significant deadlines for the implementation of the project. During the conversation with the Expert journalist, the entrepreneur repeatedly stressed the step-by-step nature of the input of generating, production and logistics capacities, which will allow starting the production of final products at the early stages of the project and reducing investment costs.

The entrepreneur did not give a direct answer to the journalist's question about the time of the start of construction of the hydrogen-energy cluster facilities. Alexey Kaplunov justifiably relates the start of the project, which involves a significant amount of foreign investment, to the international political and economic situation: "It is clear that the external background is interfering now, objectively. But I hope that such projects, regardless of political preferences, will unite."

Today, the company has assumed the responsibility to supply half a million tons of hydrogen annually to foreign partners, starting from 2030. As part of the solution of this objective, H2 Chistaya Energetika, LLC. in a number of regions of the country has started the formation of production facilities focused on the generation of the first element of the periodic table of the elements. The company, together with Rosatom, is creating one of these enterprises on Sakhalin. Our Far Eastern neighbors are preparing to produce hydrogen "by the method of steam conversion of methane with the capture and utilisation of carbon dioxide."

The creation of production facilities on Sakhalin, in addition to fulfilling obligations to foreign partners, will allow Alexey Kaplun's company to gain the software and technological experience it needs to implement a large-scale project in the north of Kamchatka.