Hydrogen Green 2021: All you need to know

Green hydrogen requires significant investment to become a major source of energy worldwide, and to reduce costs and partially replace fossil fuels. Despite its advantages, its current production is costly, and its success will depend on sustained energy policies, a change in the carbon price, and a developed renewable energy industry.

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If green hydrogen is to become a major source of energy in the global energy mix, it will require considerable investment. The aim is to reduce costs. In order to replace some fossil fuels with renewable hydrogen. Focus on green hydrogen: the ins and outs of the hypothetical energy of the future.

Green hydrogen: the promise of carbon-free energy

Strictly speaking, hydrogen is not an “energy”, but an energy carrier enabling energy transfers. It is therefore a type of energy storage that acts as an interface between the energy source and its final consumption. In this way, it reduces the problem of the intermittency of renewable energies (RE). It allows surplus electricity to be stored and re-injected into the grid if necessary.

What’s more, its “re-transformation” into electricity via fuel cells means it can be used as fuel for electric motors available at service stations. To do this, it has a high calorific power: 1kg of hydrogen is enough to cover a distance of around 100km. For the same weight, its calorific value is three times greater than that of gasoline.

It can also be used to produce heat or cold for industry. Also for heating and cooling buildings. Hydrogen and its isotopes are also used as fuel for nuclear fusion.

Green hydrogen
Ariane 6’s cryogenic tank stores liquefied hydrogen at -253°C © ArianeGroup.

75% of the mass of the Universe

The advantage of hydrogen (H) is that it is extremely widespread. It’s even the most common atom, making up 92% of matter and 75% of the mass of the Universe. It’s also the simplest atom: 1 proton and 0.1 or 2 neutrons, depending on the isotope. It is also the lightest atom.

On the other hand, on Earth, hydrogen is practically non-existent in its pure state. It is therefore always combined with other elements. It often combines with oxygen (O) to form water (H2O).

Some notable drawbacks

On the other hand, hydrogen also has a number of disadvantages inherent in its properties.

What’s more, its low density of around 90mg/m3 makes it difficult to store in large quantities on a mobile basis. Its small size relative to other atoms also calls for exceptionally tight storage conditions. Also, its flammability is still an obstacle today.

Finally, the cost of producing green hydrogen is still very high. Too expensive to imagine total replacement of fossil fuels within 10 to 30 years.

Reduce green hydrogen production costs

According to a 2019IEA report, green hydrogen produced by water electrolysis is three times more expensive than methane steam reforming or thermolysis techniques, for example. As a result, over 98% of the hydrogen produced is fossil fuel-based. It is then said to be “grey”.

Green hydrogen
Inspection glass in the electrolysis plant at voestalpine’s steelworks in Linz, Austria. The plant produces up to 1,200 m³ of green hydrogen per hour. (Source: Siemens Energy)

A kilo of hydrogen at $1 in 2050?

On the other hand, according to a study by BloombergNEF, the water electrolysis process could eventually become more competitive. By 2050, hydrogen from water electrolysis could cost between $1.6 and $0.70/kg. But to reach a sales price of $1 to $2/kg in 2050, investment needs to increase considerably.

Currently, storage in high-pressure cylinders remains the cheapest storage technique ($0.19/kg). Ahead of underground storage in salt caverns ($0.23/kg). The first technique is not suitable for storing large quantities, while the second is not mobile.

As far as transport is concerned, pipelines are currently the cheapest form of transport, ahead of ships. But using the gas network raises a number of geopolitical issues. Like the tensions surrounding the Nord Stream 2 project.

Implement strong policies geared to the energy transition

Generally speaking, green hydrogen production can only be achieved at the cost of sustained energy policies. According to BloombergNEF, this will amount to €150 billion a year until at least 2030.

At the same time, the price of carbon must also evolve if we are to decarbonize the industries that are hard to decarbonize. According to BloombergNEF, the tonne of CO2 equivalent will have to reach $50 for the steel industry. Or $116 for gas-fired electricity.

In the same vein, if policies follow suit, hydrogen for heavy road mobility could be cheaper than diesel by 2031. This would democratize the use of electric vehicles.

Green hydrogen
In the foreground, the liquid hydrogen storage center for Ariane 6 in French Guiana. (Source: ESA)

Massive development of renewable energies

Finally, to develop hydrogen, we also need a well-developed renewable energy industry. In some countries, however, the geographical configuration does not lend itself to the deployment of solar panels, wind turbines or dams. This is the case, for example, in Germany, China, Korea and Japan.

Conversely, in Brazil or the United States, hydrogen could be decarbonized and very competitive: less than $1/kg.

24% of the energy mix by 2050?

Eventually, if all the conditions are right, BloombergNEF estimates that 700 million tonnes of renewable hydrogen could be produced by 2050. This represents 24% of the energy produced in a scenario where global warming is limited to 1.5 degrees. But for this to happen, investment in renewable hydrogen needs to reach over $11,000 billion by 2050.

Sales of green hydrogen could also reach $700 billion a year by 2050. But in this scenario, 31,320 TWh of electricity from renewable sources will be needed. That’s more than all the renewable energy currently produced worldwide.

The condition for the future: incentive or even binding mechanisms

Ultimately, hydrogen will only truly become the energy of the future if considerable political and economic incentives are developed. Some of these, notably those concerning carbon dioxide emissions, will even have to be legally binding. Together, these mechanisms will provide a concrete response to the challenges of the energy transition.

Today, many countries and organizations have put in place roadmaps to achieve carbon neutrality by 2050 or 2060. At the heart of these, renewable hydrogen tends to occupy a predominant place.

All the more so as it motivates the large-scale development of renewable energies. Or at least green, low-carbon energies like nuclear power. But also carbon capture and storage technologies.

Electric Hydrogen announces the acquisition of Ambient Fuels and an alliance with Generate Capital to offer up to $400 mn in hydrogen project financing worldwide starting in 2026.
Hynfra PSA strengthens its presence in West Africa with a $1.5bn green ammonia project, backed by the Mauritanian government, with commercial operations expected to start by 2030.
Over 500 hydrogen projects are now under construction or operational worldwide, with total committed investments reaching USD110 billion, representing an increase of USD35 billion in one year.
From 2029, Verso Energy will supply hydrogen produced in Moselle to steel group SHS, supported by a cross-border pipeline and an industrial investment exceeding €100mn.
The success of SGN’s test on a gas pipeline converted to hydrogen confirms Terra Firma Energy’s technological choices, with sites already equipped to accommodate this type of energy investment.
Lhyfe has started supplying Essent with renewable green hydrogen under a multi-year contract, marking a major commercial debut in the Netherlands for the French producer.
The Dutch government grants major funding to RWE to develop an offshore wind-powered electrolysis facility, marking a key step in the OranjeWind project.
ScottishPower pauses its renewable hydrogen projects in the United Kingdom, despite receiving public subsidies, citing a lack of commercial viability under the HAR1 programme.
thyssenkrupp nucera has completed the purchase of key assets from Green Hydrogen Systems, strengthening its position in pressurised alkaline electrolysis for industrial hydrogen production.
GH2 Solar Ltd partners with AHES Ltd to build an electrolyzer plant in Gwalior, targeting 500 MW capacity by 2030 with $19mn government support.
A cooperation agreement, a bilateral carbon-credit mechanism and converging standards lay the ground for India→Japan hydrogen and ammonia flows, with volume targets, price-support schemes and first export projects scaling up.
Hydrogen offtake agreements are multiplying, with Germany and Japan leading, mobilizing producers and industrial buyers in a still nascent but already highly competitive market.
Vema Hydrogen mobilise des experts internationaux pour accélérer la mise sur le marché de son hydrogène minéral, alors que l’entreprise prévoit de forer ses premiers puits pilotes en Amérique du Nord d’ici la fin de l’année.
First Public Hydrogen Authority opens a request for proposals to transport gaseous and liquid hydrogen across California, with a deadline set for September 12.
US-based manufacturer Ohmium unveils a new generation of modular electrolysers integrating all production systems within a reduced footprint, aiming to lower installation and operating costs for green hydrogen.
ABO Energy and Hydropulse join forces to develop decentralised green hydrogen production units in Europe, with Spain and Finland as priority markets.
Next Hydrogen secures two separate loans, including one from its executives, to consolidate liquidity and continue operations while evaluating long-term financial solutions.
Metacon receives EUR 14.9 million from Motor Oil Hellas for the approved delivery of ten electrolysis units, marking the first stage of a strategic industrial project in Greece.
The European Union’s regulatory framework mandates green hydrogen integration in refineries, generating projected demand of 0.5 million tonnes by 2030.
Air Products transported over 50 tanker trucks to the Kennedy Space Center to fill the world’s largest liquid hydrogen tank, supporting NASA’s Artemis missions.

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