More recently, green hydrogen has become the talk of the town, especially in climate change circles. The production of this green hydrogen is done through the process of electrolysis. This involves the splitting of water molecules into oxygen and hydrogen. This is done through the use of electricity obtained from renewable sources such as wind or solar power. The resultant hydrogen gas will then be compressed and stored for use as a type of clean energy source.
The changing tide on green hydrogen
Green hydrogen developers are cancelling projects and trimming investments around the world, raising the prospect of longer than targeted reliance on fossil fuels. Hard-to-electrify industries that were seen as ideal candidates for green hydrogen, such as steelmaking and long-distance transportation, have found that transition to the low-carbon fuel looks prohibitively expensive.
The gap between ambition and reality in Europe shows the extent of the reset happening within the industry, said Jun Sasamura, hydrogen manager at research company Westwood Global Energy. Westwood Global Energy forms the home base for some of the most respected solutions within the intelligence and energy market research field. The information provided can be utilized by all related parties to answer some of their more strategic technical questions.
The climate at the short end of the straw
Only about a fifth of planned hydrogen projects across the European Union are likely to come online by the end of the decade, he said. That equates to roughly 12 GW of production capacity against an EU target of 40 GW, Westwood Global Energy data shows. Companies say that high costs and a lack of demand for green hydrogen have rendered many plans unprofitable.
“Green hydrogen was an inflated expectation that has turned into a valley of disillusionment,”
said Miguel Stilwell d’Andrade, chief executive of Portuguese power company EDP EDP.LS.
The company has several projects in advanced stages but cannot move forward because of a lack of buyers, said Ana Quelhas, EDP’s hydrogen chief and co-chair of the European Renewable Hydrogen Coalition. This Coalition forms the voice of a very high-level, interdisciplinary network of investors, start-ups, innovative companies, entrepreneurs as well as industrial off-takers. They all share a common goal to make Europe the global leader in renewable hydrogen solutions.
The severe cost of trying to reach your goals
Many governments have long supported development of green hydrogen – produced through electrolysis that splits water into hydrogen and oxygen using electricity from renewables – to help to decarbonize energy, transport and industry. Countries including Australia, Britain, Germany and Japan announced ambitious investment strategies they hoped would bring down costs and eventually create a profitable green hydrogen sector that would no longer need support.
It is at least three times more expensive than natural gas as a fuel for power generation, for example, and twice as expensive as grey hydrogen. The latter is produced from natural gas and coal and is already used in industries such as oil refining and production of ammonia and methanol. German die forging company Dirostahl, which makes components for wind turbines, ships and oil and gas drill pipes, is dependent on furnaces fired by natural gas and is looking for a replacement.
However, green hydrogen is still too expensive. Offers for the fuel do not come below 150 euros per megawatt hour (MWh) while natural gas can be bought for 30-35 euros/MWh, said Chief Executive Roman Diederichs. Some European countries have scaled back their ambitions. Italy has recently shifted more than 600 million euros in post-pandemic funds from hydrogen to biomethane. France lowered its 2030 hydrogen electrolysis capacity target by more than 30% in April and Portugal has cut its electrolysis capacity ambitions by 45%.
Nothing comes easy, not even green hydrogen. Certain challenges are currently delaying a more widespread adaption. Quite a common one is the high production costs. More investment is required to expand on the limited infrastructure. Safety is also a critical aspect. Incorrect handling of hydrogen gas can have very serious consequences.
GCN.com/REUTERS.