Back on the agenda
Rio Tinto to investigate the use of hydrogen power generation
The departure of Rio Tinto, one of the world’s biggest mining firms, from a joint venture with oil supermajor BP to investigate the use of hydrogen power generation using gas as a feedstock has raised a few eyebrows.
Both companies signed a deal with Masdar to create a generating plant that would have 400MW of capacity, and which would capture around 1.7 million tonnes a year of carbon emissions using CCS technology.
On the surface of it, it hasn’t been considered a seismic move; Rio Tinto said it was still going ahead with a similar project, also with BP, in California, the only difference being that coal – a commodity with which the Australian giant is of course inextricably linked – is the feedstock, and not natural gas.
A senior Rio Tinto executive told media that while the Abu Dhabi project was ‘ground-breaking and important’, the company preferred to focus on techniques that involve solid feedstocks.
This all seems a bit strange. If Rio Tinto wasn’t interested in focusing on natural-gas feedstock techniques, then why on earth did it sign up for the venture in the first place?
It may add a positive spin on matters to indicate that you are focusing on other CCS projects, but the fact remains that Rio Tinto seems to have wanted the funds from its 50% share in the venture – which was bought out by BP for an undisclosed sum – rather more than any actual involvement with the enterprise.
From the wider perspective, a shift away from investing in clean energy has already been noticed by one leading international business magazine, which pointed out in early December how the strategies of leading companies like Shell had changed.
The high start-up costs associated with this kind of technology have been hit particularly badly by the credit crunch, as banks with a strong history in providing finance for cleantech projects have suffered the most.
However, with the World Future Energy Summit taking place in Abu Dhabi this month, there is a great opportunity for financiers and investors to get back on the cleantech bandwagon.
More liquidity in the financial markets spells good news for some of the major Middle Eastern initiatives, all of which have a laudable goal to diversify their electricity-generating feedstocks away from a dependance on traditional oil and gas. I look forward to seeing you there.