REQUEST FOR HYDROGEN VALVE VALUE PROPOSITION

30% EBITDA and 20% market share is achievable in narrow niches.  This entails validation of each niche value proposition. In this regard Mcilvaine is writing feature articles in many magazines. In Valve World Americas an article this month covers the HYDROGEN VALVE market and the potential in various niches. In September a number of value propositions submitted by valve companies will be published. We are inviting you to submit a proposition with no more than four sentences. The relevant application codes and valve types should be included as per the examples.

Please submit your value proposition by August 1.  Bob Mcilvaine is available to answer questions on this at 847 226 2391.

rmcilvaine@mcilvainecompany.com

Here are the details and the market article.

Examples of Hydrogen valve niche value propositions

Hydrogen Applications

Additional application details can be included in the proposition. There can be sub-niches or niches just within a sub process.  For example, Isolation Valves for Severe Service within SMR encounter temperatures and pressures which can reach or exceed 1,500°F and 1,500 psig, respectively. These elevated temperatures and pressures are prevalent throughout various modules of and applications within the SMR process, including:

• Reformer

• Boiler Feed Water

• Feed Gas Lines

• Steam Drum Bridles

• Purging Applications

• Blowdown Applications
Each is a sub-niche and can be combined in a niche which will be most profitable.  So, this additional granularity should be included in the value proposition as well as the niche forecasts.

The valve type is part of the value proposition. It is part of the market share calculation. So, standardization is a goal. Any input relative to improving the listings will be considered.  Isolation versus control is one division.  Mcilvaine also has four service categories: severe, critical, unique and general.

Latest Developments in the Hydrogen Valve Market

A number of governments, operators and suppliers are betting on hydrogen as a major tool to meet greenhouse gas goals.

In terms of valves, there are two markets: discrete and process.  The discrete market includes small valves used with fuel cells in mostly mobile applications.  Many automotive companies are moving forward with hydrogen fueled vehicles. 

Discrete is defined as a valve associated with a piece of equipment.  Swagelok furnishes check valves for vehicle fuel cells.  These are small valves and are sold to vehicle or fuel cell manufacturers.

Process includes the production and transport of hydrogen as well as use in processes such as steam generation or compression or heat generation using combustion with hydrogen as the primary or secondary fuel. Process also includes the creation of chemical products.

Since the discrete market involves small valves and a unique set of customers, the suppliers are not the same companies furnishing the larger process valves.

The process market preceded the discrete market.   But presently much of the activity is in the discrete segment.  Over the next 15 years the process expansion will outstrip discrete.  However, by 2040 the discrete market will be advancing while the process market slows down.

A detailed analysis has been made for the process valve market for hydrogen through 2028 (1)

Coverage includes:

Coverage included gray, green, blue and yellow hydrogen. Much of the near-term valve potential is in gray and blue hydrogen. The gray hydrogen includes the valves for partial combustion and also for purification processes such as pressure swing adsorption.  For molecular sieve switching metal seated ball valves compete with triple offset butterfly valves.

The potential for yellow hydrogen is substantial.  Environmentalists have recognized the need for carbon negative processes.  Biomass combustion with carbon capture and sequestration (BECCS) is the only cost-effective carbon negative option.

The conversion from gray to blue hydrogen entails carbon capture and sequestration. The many valves in the absorption and separation as well as liquefaction and transport are included.

 23,000 forecasts by country, valve type, function and application for the 2022-28 were created.

There was also an analysis by region.

Analysis of the valve companies and the products which they are supplying for hydrogen applications shows that acquisitions are positioning some valve companies to improve their market share.  ITT has purchased Habonim. Atlas Coco and Ingersoll Rand have combined valves with compressors and other complementary products to pursue markets such as hydrogen.

The hydrogen process valve market is highly dependent on the mix of fuels for the power industry.

An electric car plugged into an electrical outlet can be using fossil fuel.  The fuel cell eliminates this route. To the extent hydrogen replaces coal or gas for combustion there is not an increase in valve revenues. 

Valve expenditures per kWh can be compared.

If solar or wind is used to make hydrogen which then is used in fuel cells, the valve purchases could range from 20 to 70% of a coal fired plant when you consider both production and use.

Hydrogen use is only one of the variables in determining valve sales to the power industry.

Yellow hydrogen using biomass will have niche uses. But BECCS is just as yellow (carbon negative). This option requires the most valves. So, the extent to which BECCS is adopted the valve market will increase.

Present yearly valve sales to the power industry around the world are $9 billion. ⁽¹⁾

There will be robust growth under the BECCS based strategy outlined here. If countries do not continue to strive for GHG emissions to meet the Paris agreement (No Regs) there will be modest growth in line with GDP. With a mix of technologies such as envisioned by IEA to meet net Zero there will be low growth. If the environmentalists were to dictate a mix heavily dependent on solar and wind (Env), there would be significant revenue reduction over the next 10 years.

Electrolysis

Today, electrolyzers, the devices used in production typically utilize one of two technologies: low-pressure electrolysis or high-temperature electrolysis. Technological development has already seen us move up to large-scale 20MW electrolyzers, but 100MW units are not too far in the future. Several valve manufacturers are confident that they have the valves to fulfill the requirements of electrolysis applications for the PEM, AWE or SOEC electrolyzers of both today and tomorrow. 

Capital costs of electrolyzers uninstalled range from $1000 to $1500 /kw. Lifetime is estimated at 75,000 hours.

For every kg of hydrogen produced, 9 kg of water must be consumed. Therefore, 2.3 Gt of hydrogen requires 20.5 Gt, or 20.5 billion m3, per year of freshwater, which accounts for 1.5 ppm of Earth’s available freshwater. Most applications for hydrogen require it to be combusted or pumped through a fuel cell, which converts hydrogen gas into electricity and water, but while most water can be recovered, it is not generally returned to the original body of water and will be treated as consumed. The only sector in which the use of hydrogen does not regenerate the entirety of the water feedstock by fuel cell or combustion is chemical synthesis, which will account for 540 Mt of hydrogen, using at most 4.8 billion m3 or 0.3 ppm of global freshwater annually.

In the Norwegian industrial estate of Porsgrunn, a major German engineering contractor in the technical gases industry is currently building a 24 MW electrolysis plant for producing green hydrogen as a feedstock for green ammonia, which is required in fertilizer production. The necessary hydrogen is to be generated by means of electrolysis using hydropower.

in 2022, the KSB Group supplied pumps and valves for this plan. Luxembourg-based valve manufacturer Sisto Armaturen S.A., which is part of the KSB Group, supplied its Sisto-RSK swing check valves equipped with a special coating.

Much of the process valve market will be generated through fossil fuels using SMR and other technologies.

At lower temperatures and pressures, torque-seated gate valves, often equipped with either solid Stellite® or Stellite®- welded overlay trims, may suffice for applications that do not require tight shutoff. Torque-seated valve designs involve the application of substantial forces to the valve components to adequately seal against line pressure.

Over time, these forces wear down the critical sealing components of the valve, resulting in shortened product longevity versus those of position-seated valve designs.

As temperatures and pressures rise, gate valves are often replaced by Y-pattern globe valves, similarly equipped with either solid Stellite® or Stellite®- welded overlay trims, to achieve improved shutoff performance at initial installation. Unfortunately, the improved shutoff performance of globe valve is offset by the following disadvantages:

• Substantial pressure drop across the valve

• Short product longevity

To address the underperformance of globe valves in severe-service applications, companies engineer and manufacture quarter-turn, metal-seated floating ball valves (‘MSBVs’) that can achieve a ‘bubble-tight’ seal per ANSI FCI 70.2 Class VI shutoff – or better. The quarter turn mechanics of a MSBV not only eliminates packing leaks, but also enables the usage of low emissions packing that complies with prevailing fugitive emissions certifications, such as API STD 641.

Forecasting the valve revenues in the short term is challenging.  Forecasts to 2050 include so many variables that constant adjustments will be required.

(1)          Hydrogen Valves, published by the Mcilvaine Company