If we want to support the wind industry in Europe, we have to very soon come up with a strategy that prevents our partners suffering like the European solar manufacturing sector did in the early 2010s, when China began dominating the global PV market.
Onshore wind saw a major downturn last year and we risk our industrial production losing ground and shifting to other geographies. One of the reasons is that the European power grid is currently far too small to transport the produced renewable energy, with congestion and curtailment growing faster than the extension of the network.
This is where hydrogen steps in as an energy carrier that can help store large volumes of wind energy for long periods of time.
We can turn renewable energy into gaseous electricity, as hydrogen is often referred to, via electrolysis — splitting water into oxygen and hydrogen, with the energy remaining inside the hydrogen molecule.
As only 20% of European energy is currently transported via electrons, with 80% carried by molecules, this is an important pathway to accelerate the deep decarbonisation of our economy. Hence, it is electrolysers that will allow us to do what is needed to support the wind and solar industries.
At the same time, gas grids cannot be regarded as stranded assets anymore as they will serve as main infrastructure for “wind gas” and “sun gas”. But where are we Europeans with regards to electrolysers? Leading! We are number one in the world, so far.
Analyst BloombergNEF recently wrote that the Chinese have already become leaders in low-cost manufacturing of the most mature alkaline electrolysis technology, but they sell mostly to domestic markets. Here is why we need a European “Clean Hydrogen Coalition” very soon: we need to defend our leading global role in hydrogen technologies. This is cheaper in the end than catching up, like we have to do in the field of batteries.
It seems that the markets have understood. From the beginning of this year, the share prices of companies in hydrogen technologies — especially electrolysers and fuel cells — have gone up dramatically. This is a good sign, but it is definitely not enough. The price cuts of this disruptive technology will follow only if we embark on a joint acceleration programme of industrial manufacturing. Here we need policymakers to pave the way with a clear commitment and the right legal framework. The use of electricity for hydrogen production is still burdened by policy-driven factors.
To be honest, the recent recasting of the European Commission’s (EC) Renewable Energy Directive is not helping, as it is built on an all-electric scenario, which would delay decarbonisation due to the physical limitations of the power grids. This can only be overcome if the commission’s upcoming EU gas package, currently labelled “Smart Integration Package”, introduces the case for green molecules in addition to green electrons.
The electricity and hydrogen sectors need to work together and help each other. Only by using the balancing capacity of power-to-hydrogen technology via electrolysis can a deep decarbonisation succeed in Europe.
A real EU-wide hydrogen strategy is needed, along with supporting legislation and an industrial initiative — a “Clean Hydrogen Coalition” along the lines of the EC’s European Battery Alliance, which promises to create a competitive and sustainable battery manufacturing industry in Europe.
The groundwork has already been laid with previous EC innovation initiatives like the Fuel Cell Hydrogen Joint Undertaking, with additional activities such as the IPCEI (Important Projects of Common European Interest) on hydrogen showing encouraging first results.
With the EU moving forward on a Green Deal to decarbonise the bloc by 2050, the time is right to push ahead with a Clean Hydrogen Coalition that would help Europe meet its Paris Agreement goals.
Jorgo Chatzimarkakis is secretary general of trade association Hydrogen Europe.
A version of this article first appeared in EU affairs newspaper New Europe.