Many believe it is.
Look at some of these recent development projects.
Spanish power company Iberdrola and Sweden’s H2 Green Steel announced a partnership to develop a green hydrogen production facility with an electrolysis capacity of 1 gigawatt. According to CNBC, the 2.3 billion euro ($2.6 billion) project is being financed by a mixture of equity, green project financing and public funding.
French renewable energy developer Total Eren announced research plans for the development of a large-scale green hydrogen project called “H2 Magallanes,” totaling up to 10 GW of installed wind capacity.
And according to the December 3, 2021 article, “The Hydrogen Stream: 8 GW green hydrogen project announced in Chile,” by Sergio Matalucci, in PV Magazine, representatives from more than 19 countries participated in the launch of H2LAC, a new platform to promote the development of green hydrogen in Latin America and the Caribbean. “The initiative, endorsed by GIZ in collaboration with the World Bank, ECLAC, and the European Union’s Euroclima+ Program, could help position all the countries involved as a cluster to export green molecules to the large consumption centers, such as the United States, Europe, or Asia,” writes Matalucci.
Despite the investments and increased research, some have their doubts.
The Economist, July 2, 2020 edition, reports that “After many false starts, hydrogen power might now bear fruit,” that green hydrogen “…will fill in the gaps, rather than (dominate) the economy.”
The Siemens Corporation disagrees. According to their website, “The global energy transition will be based on the hydrogen economy,” citing a demand of up to 500 million tons in the next 30 years.
What is Green Hydrogen?
In short, it is a clean burning fuel that eliminates emissions by using renewable energy to electrolyse water — that is separating the hydrogen atom from its twin oxygen bond. The process of electrolysis requires water, a big electrolyzer, and plenty of electricity. If this electricity comes from renewable sources, then the hydrogen is considered green; and the only carbon emissions are those from the generation infrastructure.
To date, electrolysis has been costly. Siemens Energy hopes to change that. Every four to five years, the output of electrolysers increases tenfold. Siemens Energy’s latest PEM (Proton Exchange Membrane) electrolysis product line is optimized for applications up to the higher three-digit megawatt range, so that systems of this size can produce several tons of green hydrogen per hour.
In November 2021, Siemens Energy delivered its most recent electrolyzer to Wunsiedel. According to the company, it will produce up to 1,350 metric tons of green hydrogen annually from renewable electricity and water for industrial and mobility applications in the region. This corresponds to a CO2 savings of up to 13,500 tons. Commissioning is scheduled for summer 2022.
What Can it be Used For?
Potentially, green hydrogen has many uses. First, it can be added to natural gas and burnt in thermal power or district heating plants.
It can also be used to replace the industrial hydrogen produced from natural gas. For example, based on data from the International Energy Agency, 38.2 million metric tons (MT) of hydrogen were used for oil refining in 2018 and another 31.5 MT went toward ammonia production.
Then there is the possibility of electricity production via fuel cells and for the powering of fuel-cell vehicles.
However, there are significant challenges to overcome.
For example, according to earth.org’s article, “What is Green Hydrogen?”, storing and transporting green hydrogen is difficult; the highly flammable gas occupies a lot of space and can make steel pipes brittle. Because of this, specialized pipelines must be built, which is costly, pressurizing the gas or cooling it to a liquid. These last two processes are energy-intensive and undermine green hydrogen’s round-trip efficiency.
Green hydrogen may be useful for steel production, potentially bringing the industry to a net zero emission rate. However, according to a new report from BloombergNEF (BNEF), this would require an investment of US$278 billion to bring this to fruition by 2050. “Governments will need to provide support to help the industry transition, and carbon prices or subsidies of up to $145 per ton of carbon dioxide will be needed to incentivize the initial phases of change in the next decade,” BNEF said.
Esben Hegnsholt, managing director and partner at Boston Consulting Group (BCG), stated at COP26 that the support for hydrogen alternatives is still in the infant stages.
“If hydrogen is to achieve its full potential, it must become less expensive and more efficient to produce, distribute and use,” he said. “Companies need to focus their hydrogen investments on use cases where cheaper technologies are not suited and where low-carbon hydrogen can be deployed at scale. For their part, governments need to develop a regulatory regime that encourages the deployment of low-carbon hydrogen at scale and in the right areas, and they need to ensure the build-up of the right infrastructure such as transport pipelines and hydrogen ‘gas stations.’”
In the November 17, 2021 GreenBiz article, “Could this be the turning point for green hydrogen?” the author, Heather Clancy, writes, “…the capital expenditures are not for the faint of heart. Currently, it costs about $5 per kilogram to produce hydrogen from renewable energy, a metric that inspired the U.S. Department of Energy to launch the Hydrogen Shot challenge in June. The goal: Reduce that cost by 80 percent to $1 per kilogram within one decade.”
Which is why, at least at the moment, venture capital for green hydrogen is light when compared with other climate tech categories.
However, when it comes to climate change, no solution can be ruled out. Green hydrogen may find its niche as the technology advances.
