The emergence of a green hydrogen economy is a unique and rare opportunity for Europe, but its deployment needs to be sped up and scaled up massively, politicians and executives at a high-level conference on hydrogen organised by the German government have said.
“Hydrogen has the potential to be a game changer … in Europe,” European Energy Commissioner Kadri Simson said at the virtual event. “But we need to scale up supply and demand in parallel.”
The EU in its recently launched hydrogen strategy aims at ramping up clean hydrogen production to 6GW by 2024, and then further to 40GW by 2030. Around 10 million tons of conventional hydrogen – mostly produced from fossil sources – are currently being consumed across the EU per year, Simson added.
The European Commission plans to boost hydrogen production in Europe mostly from renewable energy sources (‘green hydrogen’), but also sees a role for hydrogen made from natural gas linked to carbon capture and storage (‘blue hydrogen’) on a temporary basis.
For hydrogen imports from non-EU countries, Brussels is in talks with Morocco and Ukraine.
Hydrogen in recovery plans
On a global level, currently there is only 200MW of electrolyser capacity for the production of green hydrogen in operation, Fatih Birol, the executive director of the International Energy Agency (IEA) cautioned.
“To reach net zero in 2050, it should be 2,600GW. There is a lot to do!” he stressed.
“For me hydrogen is a unique technology. It is a technology that everybody loves,” he said, but added that this doesn’t guarantee results.
While there is a race among governments, in particular from Europe and East Asia, to become “the major driver of hydrogen,” massive investments into the new energy carrier as well as regulatory changes are needed, Birol emphasised.
International cooperation should aim at harmonising innovation programmes, and government need to include hydrogen in their recovery packages, he stressed.
‘Speed and scale needed’
“Clean hydrogen can really become the oil of the future climate neutral economy,” said Ann Mettler, director for Europe at Gates Ventures, the private office of US billionaire Bill Gates. Mettler also spoke on behalf of Breakthrough Energy, a network led by Gates to scale up technologies to reach net-zero ambitions.
Mettler pointed to scenarios by the IEA, Bloomberg New Energy Finance and others whereby hydrogen could turn into a global industry comparable to that of the oil & gas sector today in value and in terms of jobs today.
“It is really not often that opportunities of this magnitude come along, it has been said in the previous speeches … This is an opportunity that simply cannot be squandered. But we will need speed and we will need scale.”
Mettler warned that government funding typically slows after an initial research and development phase, after which support often becomes insufficient to help new technologies really take off.
“Europe tends to be strong in discovery and invention, but less strong in deployment, scale and innovation,” she said.
Half of the emission reduction the world needs will have to come from technologies that are not yet commercialised, Mettler stressed, pointing to a need to quickly accelerate and speed up the innovation cycle to push down the price of green hydrogen quickly from some $4.30 per kilogram to $1.80/Kg to make it competitive with fossil-based hydrogen.
In a “race to the top, for fewer and no emissions,” not only Europe sees potential, but also China and several others, she cautioned.
While speakers at the Berlin-anchored conference agreed on the need to speed up and scale up the production of green hydrogen, they did not agree on where the massive amounts of the green energy carrier should come from.
Germany and the EU are and will remain energy importers, German economics and energy minister Peter Altmaier said, and need international cooperation also in the hydrogen sector, for example with emerging economies looking for new business models, or with countries that so far had the extraction and export of their energies as economic model.
Germany is already in talks with Morocco and Australia over possible hydrogen partnerships, and eyes other African countries as potential future sources of green hydrogen.
For future imports, a methodology for the classification of green hydrogen is needed, however, Altmaier stressed.
Christian Bruch, chief executive at recently spun off Siemens Energy, agreed that Europe “needs pilot projects to develop an import strategy” as most hydrogen will come from outside the EU.
For that, the EU needs to quickly find a way to provide the corresponding infrastructure, for example by using existing natural gas grids for the transport of hydrogen.
“But most importantly: ‘let’s get started and not debate about everything!” he advised.
European abundance in wind and solar
Henrik Poulsen, CEO at offshore wind champion Orsted, disagreed.
“There is absolutely no reason why the availability of renewable energy should become a bottleneck for an ambitious build-out of green hydrogen,” he said at the conference.
“Europe has an abundance of natural wind and solar resources at its disposal. Europe is a global leader in wind energy.
“These fundamentals give us a very strong starting point for delivering the massive amount of renewable energy that will be needed to decarbonise our electricity supply and support a broad-based green electrification of society, but also on top of that building out a new green hydrogen industry.”
Orsted calls for subsidies
Poulsen pointed to several recent initiatives by his company in the hydrogen pilot phase, such as a planned partnership with chemicals group Yara in the Netherlands to use power from Orsted’s 752MW Borssele 1&2 wind farm in the Dutch North Sea to replace conventional hydrogen base on gas with green hydrogen from offshore wind.
But demand for renewable hydrogen needs to be stimulated, and markets have to be kick-started, Poulsen reckoned.
“Many large companies are ready to accelerate the transition to green hydrogen and electro fuels. But there is a need for polices that support demand in the early stages of the market development.”
Orsted - which already receives support for the electricity produced at Borssele 1&2 - has said it will seek public funding to co-develop a 100MW electrolyser in the Netherlands that would produce green hydrogen for use at Yara’s Sluiskil facility in the Dutch province of Zeeland.