L'intervento di Michele Sponchiado dedicato alla produzione di idrogeno verde su larga scala, quale un fattore abilitante della transizione energetica

1. GREEN HYDROGEN
PRODUCTION
Large-scale green hydrogen production:
an enabling factor of the energy transition
M. Sponchiado, Industrie De Nora S.p.A.
20th October 2022

2. © 2022 De Nora
“Sustainability is at the heart of our values”
Introduction to De Nora:

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WE ARE DE NORA
© 2022 De Nora
A global leading player in sustainable technologies
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#1 largest supplier of metal-coated
electrodes globally
Global leader in solutions for
green hydrogen technologies
Leading positions in water and waste
water treatment technologies
Source: Company information, Roland Berger elaboration based on expert interviews.
~€610m
2021E Revenue1
~10% CAGR 19A-21E
~€120m
2021E EBITDA Adj.1,2
~20% Margin
14
Manufacturing and
assembling facilities globally
and 5 R&D centres
>300
Patent protected inventions
and +90 researchers
99%
Revenue Outside Italy3
and >1,600 employees
~38%
Revenue from
High value added
aftermarket services4
1 Reflect Management’s current expectations for 2021 and are subject to change. 2 EBITDA Adjusted for non-recurring items
3 Based on 2020A figures. 4 Average of 2019A – 2021E

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© 2022 De Nora
A comprehensive portfolio of mission-critical solutions
and high-value added aftermarket services…
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Electrode Technologies Water Technologies
Energy Transition
Products
and
Solutions
Services
Technical assistance and
remote support services
Electrodes recoating, repair
services, and spare parts
Performance upgrades and
retrofits
Engineering
design
Supply and
maintenance agreements
Analytic
services
Anodes, Cathodes, Catalytic Coatings
Gas Diffusion Electrodes
DSA® Electrodes for AWE, Electrolysis
Cells, GDE, Electrodes for Fuel Cells
Electro-chlorination Plants, Disinfection and
Filtration Technologies, Ballast Water Treatment

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…addressing well-diversified end markets and applications
while serving a large customer base
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Electrode Technologies Energy Transition Water Technologies
Chlor-alkali
Electronics
Mining
Hydrogen production
Hydrogen storage and
transportation
Fuel cells
Swimming pools
Municipal and
Industrial water &
wastewater treatment
Power and Marine
water & wastewater
treatment
To come
~30%
Top-20 customersrevenues %1
Top-quality customer
base across several
markets
✓
Low customer
concentration
✓
Long term tenure
✓
High revenue visibility
based on product life
cycle
✓
Customer Base
Source: Company information. 1 % of total revenues based on 2020 figures excluding tk nucera.

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© 2022 De Nora
State-of-the-art manufacturing footprint to address
market opportunities globally
Manufacturing and
assembling facilities
Offices
R&D centres
>1,600
Employees
144
Countries of presence
14
Manufacturing and
assembling facilities
5
R&D centers
+90
Researchers
26
Operating companies /
branches2
APAC
43%
EMEIA
25%
APAC
37%
Americas
34%
EMEIA
29%
Revenue
by geography1
Source: Company information. 1 Based on 2020 figures. 2 Data as of December 2021. Includes the Parent company Industrie De Nora S.p.A.
Employees
by geography1
Americas
32%

7. © 2022 De Nora
Green hydrogen production on large scale:
an enabling factor for the energy transition
“Hydrogen has a central role in helping the world reach net-zero
emissions by 2050 and limit global warming to 1.5 degrees Celsius.
… (it) offers the only long-term, scalable, and cost-effective option
for deep decarbonization in sectors such as steel, maritime,
aviation, and ammonia …”
(the hydrogen council)

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Hydrogen colors and sources
H2 is a versatile energy vector that can be produced through several industrial processes
Hydrogen production methods and colors:
Coal gasification
Reacting coal with oxygen
and steam
Natural Gas reforming
Reacting Methane and
Steam (SMR)
By product of industrial
processes
Black
Gray
Gasification
Fossil fuels gasification
Brown
Electrolysis
Water electrolysis powered
by Renewables
Black / Gray / Brown
with Carbon Capture &
Storage (CCS)
Green
Blue
Electrolysis
Powered by nuclear energy
Purple
Electrolysis
Powered by the GRID
Current
production
methods
Low Carbon
Hydrogen
Low Carbon Hydrogen processes:
Blue Hydrogen Green Hydrogen
Purple Hydrogen
RENEWABLE
ELECTRICITY
ELECTROLYSIS
ELECTROLYSIS
NUCLEAR
ELECTRICITY
STEAM
REFORMING
CO2 MANAGEMENT
(CCS – Carbon Capture
and Storage)
COAL
METHANE
+
+
+
+

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As renewable power
prices decrease …
… and electrolyzer
cost decrease…
Iron & Steel
Industry
Energy
Storage
Building / Industrial
Heat & Power
Aviation
Rail
transport
Shipping
Heavy &
Light Duty Vehicles
Refining/
Petrochemical
Ammonia/
Methanol/
Chemical
… hydrogen end
markets will rise
e-
Water
Source: Hydrogen Council 2050 / ETC (Energy Transition Commission
Green H2 role in Energy Transition
Cement
Industry

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Hydrogen demand is expected to grow by c. 6% p.a.
between 2020÷50 driven by multiple end markets
1 Roland Berger elaboration based on IEA, Hydrogen Council. Values include hydrogen and hydrogen contained in ammonia and synthetic fuels. 2
Referring to IRENA 1.5°C scenario. Source: IRENA (Geopolitics of the Energy Transformation: The Hydrogen Factor). 3 Referring to Energy Transitions
Commission (ETC) Supply-side decarbonization only scenario. 4 Referring to BNEF Green Scenario. 5 Referring to Hydrogen Council scenario.
◼ Several reputable sources are
providing estimates of the
growing hydrogen market
◼ Central role of Hydrogen in
reaching net zero emissions and
limiting global warming to 1.5°C
◼ Critical in achieving
decarbonization of hard-to-
abate sectors
◼ An enabler in the energy system
◼ Potential as an energy vector for
a wide range of applications in
transport, buildings, and industry
Global hydrogen market1 by end market (2020÷2050; Mton) Key highlights
2050 global H2 Market (Mton)
~600
~800
~800
~660
2
3
4
5

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The world is running towards green hydrogen
1 Elaboration of Roland Berger. Values include hydrogen and hydrogen contained in ammonia and synthetic fuel.
2 LCOH = Levelized Cost Of Hydrogen
Grey/
Brown
hydrogen
Coal
Natural Gas
Biomethane
Reforming /
Gasification
CO2 emitted
2020÷2050
supply mix1
Inputs Most common
Process
Emission
impact
Blue
hydrogen
Natural Gas
Biomethane
Biomass
Reforming
CO2 stored /
reused
Green H2 is expected to achieve the highest share of the supply mix by 2030 supported by reduced LCOH2 and no CO2 emissions
2020 2025 2030 2040 2050
~89%
~1%
~10%
~2%
~37%
~61%
Green Hydrogen
Blue
Hydrogen
Grey
Hydrogen
Green
hydrogen
Renewable
energy
Water
Electrolysis
NO CO2
EMITTED

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Green hydrogen demand evolution between 2020÷50
Around half of the total green hydrogen is expected to be used in transportation and
industrial energy by 2050
◼ Before 2030 the so-called
“existing feedstocks” sector:
ammonia, methanol, refining, …
present the most rapid demand
acceleration
◼ In 2030 existing feedstocks will
represent > 85% of the overall
green hydrogen demand
◼ Over the years, particularly from
2030 onwards, new markets
that use H2 as an energy carrier,
rather than as feedstock, are
expected to emerge
◼ Main growth in hydrogen
demand by 2050 is expected to
come from – Transportation –
Industrial energy – Building Heat
& Power
Global green hydrogen market1 by end market (2020÷2050; Mton)
1 Elaboration of Roland Berger
Key highlights

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Several hydrogen projects are ongoing or announced
sustained growth is expected during the next decade
1 Large scale defined as > 1 MW
2 Giga scale defined as > 1GW
◼ Around 70% of the projects
have announced full or partial
commissioning before 2030
◼ The number of giga-scale
projects has more than
doubled from 17 to 43 in the
past years with
announcements spanning all
regions
◼ Europe accounts for the
largest share of announced
projects, followed by Asia and
North America
◼ Within Asia, China accounts for
roughly half the total
announcements, with multiple
projects emerging to meet
growing local demand and
government targets
Source: Hydrogen Council – Hydrogen for net zero – November 2021

14. © 2022 De Nora
Water electrolysis technologies:
“There are four types of water electrolysis technologies; alkaline,
polymer electrolyte membrane, anion electrolyte membrane, and
solid oxide electrolysis.
Alkaline water electrolysis is the most mature technology with
high energy conversion efficiency and reliable performance”

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AWE has overall advantages and is the preferred choice
for large-scale green hydrogen production
Legend: Alkaline Water Electrolysis (AWE), Polymer Electrolyte Membrane (PEM), Solid Oxide Electrolyser Cell (SOEC), Alkaline Anion Exchange Membrane (AEM).
1 Multi-MW PV plants have dynamics of >10 minutes, therefore are perfectly suitable for AWE application.
Commercial Technology R&D Phase
AWE PEM SOEC AEM
Pros
✓ High efficiency
✓ Low CAPEX cost
✓ Cheap construction materials
✓ Multi MW stacks
✓ Synergetic with RE1
✓ Rapid response (stack) to
variable loads
✓ High gas purity
✓ High flexible operations
✓ Higher overall system
efficiency
✓ Can recover waste heat
/steam
✓ High flexible operations
✓ High gas purity
✓ Rapid response to variable
loads
✓ Less corrosive electrolyte
✓ No PGM coating
✓ Cheap construction materials
Cons
 Lower gas purity
 Use of 30% KOH
 High CAPEX cost
 Noble Metal- based catalyst
and protective coatings
 Expensive construction
materials
 Lower durability
 Lower efficiency
 R&D phase
 Low dynamics
 Long start-up and shut-down
times
 High-temperature operations
 Materials corrosion
 R&D phase
 AEM durability
 Membrane conductivity
Ready for GW scale
High cost
Limited to Mid/Small size
installations
R&D
In principle very efficient
R&D
Potentially combines
Pros of AWE & PEM

16. © 2022 De Nora
Green hydrogen cost: drivers, trends and
role of De Nora’s products
“Energy cost represents a key variable for hydrogen total cost of
ownership (TCO), but also CAPEX has an impact, especially in case
of low utilization factors (direct interface with RE)”

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Energy is the main contribution to the TCO,
while CAPEX weights for less than 1/5 of the
overall production cost;
Stack cost represents about 30 - 35% of the overall CAPEX (EPC),
anodes and cathodes counts for < 6 - 8%
TCO ~ 2,42 €/kg
450 €/kW CAPEX, 3% WACC, 8600 h/y, 8y electrodes life;
40 €/MWh,1,80V @ 10 KA/m2
Pressure 25 bar (+ compression to 30 bar)
CAPEX;
15% OPEX &
Maintenance;
6%
POWER;
79%
Cathode and
Anode
Bipolar plates
Diaphragm
Structural
components
Accessories
Frames and
pressure
rings
Assembly
Stack; 35%
Alkaline (pressurized) System Stack cost breakdown
DN typical scope of supply
CAPEX impact on TCO – stack and electrodes weight
Electrodes and electrode package, despite a modest impact on CAPEX, are the key factors for the
power consumption reduction and therefore for decreasing the TCO
This % value rise in case of
intermittent usage of the plant
TCO = Total cost of ownership

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Price trend: Market trend:
Today Future
Market
volume
(MW)
Large volumes dragged by
CARBON TAX application
(industrial use) or a ramp
up of hydrogen mobility
(heavy vehicles) or a
reduction of the POWER
PRICE
1st Knee point:
DEMO projects
2nd Knee point:
external factors
200
400
600
800
Today Future
AWE
System
Price
(€/kW)
Improved AWE System Price: 600 ÷ 700 €/kW
(> 20 MW installations)
Source: Confidential
Future Price: 300 ÷ 350 €/kW
(>100 MW size plant)
Source: Confidential
Today AWE System Price: 800 ÷ 1200 €/kW
(> small installations)
AWE CAPEX & market trends

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DN AWE Electrodes
At the earth of a new generation AWE Technology, reducing power consumption and investment costs,
enabling hydrogen sustainability
Anode and cathode
advanced electrodes
coated with proprietary
catalytic coatings
◼ Higher current
density, thus
reducing CAPEX
intensity and Stack
Footprint
◼ Reduce Power
Consumption
through Lowering
Cell Voltage
◼ Ensure Lifetime
stability
◼ Use for Atmospheric
& Pressurized
Alkaline Water
Electrolysis
Coating solutions

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AWE 2.0 allows lower
hydrogen cost(*), in any
possible ENERGY COST
scenario
Role of De Nora Products
Enable higher hydrogen-specific production rate (proportional to Current Density) at outstanding
specific energy consumption (proportional to cell voltage), allowing more compact installations (lower
CAPEX) and a lower Hydrogen TCO (Hydrogen Total Cost of Ownership)
(*) = Total Cost of Ownership

21. © 2022 De Nora
Main project under execution
“>2 GW Secured green H2 projects”

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De Nora on leading projects for H2 development
Based on publicly available info
Camacari Industrial Complex
(First industrial-scale green Hydrogen Site in Brazil)
I Phase Project Size: 60 MW

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Wrap Up
◼ Green Hydrogen will be a key enabling factor of the future world energy transition
thanks to its ability to be not only an energy vector but also fuel and raw material for
chemical processes.
◼ It will be key for CO2 footprint reduction of the so-called “hard to abate” sectors.
◼ The hydrogen cost reduction will allow the future to “unlock” its deployment in
different industrial segments.
◼ Its production is possible in large quantities. AWE – Alkaline water electrolysis – is
favored for this kind of “Giga” scale installation.
◼ Large installations will drug large-scale manufacturing and therefore a considerable
CAPEX reduction (economy of scale).
◼ Large-scale green hydrogen installations require low CAPEX, good electrolyzer
performances, and high operating Current Densities (that translate into low OPEX and
low CAPEX again). These are the main driver De Nora is following in the development
of its products for AWE (2.0).