Europe risks losing out on a green hydrogen industrial boom due to a lack of financial support for the sector, according to Ignacio Galán, the chief executive of Iberdrola, the world’s third-largest power utility company, who has today become the new chairman of industry body Renewable Hydrogen Coalition (RHC).
“Today, the cost of green hydrogen is still four times higher than the cost of hydrogen produced with fossil fuels,” he told the RHC’s Renewable Hydrogen Summit on Wednesday morning. “So we will not reach 40,000MW of green hydrogen by 2030 — which is the European target — if we don’t have the stability today of the support mechanisms necessary to reduce the cost differential of green hydrogen.
“We need to know [the regulatory framework] now, not in 2025, now.”
Galan said that, aside from this lack of support, Europe has everything it needs to create a new industry that can provide thousands of jobs and create export opportunities — renewable energy resources, industrial capabilities and companies that are ready to invest.
“But,” he says, “we need to be fast”.
“Countries like the United States are already moving fast… they are very ambitious, they would like to reach a price of $1/kg by 2030, and they would like to [offer financial] support to achieve this target.”
“Europe has to move faster. For this, I insist, we need regulatory stability.”
The Spanish utility boss added: “We have the possibility of creating a first-mover advantage and [to] lead the green hydrogen industry. If we don’t take this opportunity, others will do it and we will repeat the same mistakes we did with solar PV.
“We need an electrolyser industry made in Europe.”
German solar manufacturers such as Q Cells, Conergy and SolarWorld led the global industry before collapsing in the mid-2010s, after government-backed companies in China began undercutting them due to cheaper labour costs and economies of scale from massive solar module factories.
Galán said that the level of financial support that green hydrogen needs is “much lower” than the subsidies given out in recent years to help bring solar and wind power to cost parity with fossil-fuel-fired electricity, and that money is available from the new €806bn ($934bn) NextGenerationEU fund — set up to help the European economy rebound from the Covid pandemic.
“But we still have no clarity on the availability and mechanisms to get these funds. We cannot arrive late.”