Green hydrogen and the future of energy

Green hydrogen

The UK's hopes of meeting greenhouse gas emission targets received a boost in late November when energy giant BP announced plans for a large-scale 'green hydrogen' production plant in northeast England. The facility, together with news of a key development in a major new clean hydrogen project in Egypt, underlines the confidence being placed in this new environmentally friendly form of power. Yet as promising as it is, it will be some time before the energy source achieves its full potential.

'Green hydrogen' - a zero-carbon fuel produced through renewable energy-powered electrolysis of water – has generated a great deal of interest among companies and governments because of its numerous potential uses, particularly for decarbonizing the iron and steel industry as well as heavy transport, shipping, and aviation that are difficult to electrify.

Ambitious clean hydrogen output targets were set at the UN COP26 climate talks in Glasgow, however, production costs are about four times higher than forgery hydrogen', created from natural gas through a process called steam methane reforming that releases carbon into the atmosphere, currently the most widely used form of the gas. A cleaner variant, 'blue hydrogen' is produced in the same way, but with carbon emissions mostly captured and stored.

Oil and gas companies are investing heavily in hydrogen generation as they are counting on the energy source helping heavy industry and transport transition away from hydrocarbon fuels, in order to meet carbon emission goals. BP believes its new Teesside plant together with a planned 'blue hydrogen' facility at the same site could together achieve 30 percent of the UK's 2030 hydrogen production target.

The British development came as a prospective Egyptian 'green hydrogen' plant, looking to tap the country's solar and wind energy and proximity to hydrogen markets, selected a company to build the facility's electrolyzer, the device that performs hydrogen-generating electrolysis. Once operational, the electrolyzer will be the largest in the world.

Renewed international commitment to achieving climate change targets has spurred hydrogen energy development, with the number of new projects between February and July increasing by 57%to a total of359. They represent hundreds of billions of dollars of investment over this decade – at the end of which 70% of hydrogen production capacity will be driven by renewable energy sources, according to the Hydrogen Council, an alliance of companies committed to hydrogen power development.

One of the most compelling benefits of clean hydrogen its potential for solving a big renewable energy conundrum. The generation of wind and solar energy is intermittent and while storage technologies are being developed, surplus electricity produced when consumer and industrial demand is low could also be diverted to power the manufacture of green hydrogen, which can be stored at scale. However, the costliness of the power to gas process to date accounts for the fact that green hydrogen' makes up less than 1 percent of annual global hydrogen production.

But just as with wind and solar power, costs are likely to come down over time as public and private investment improve and finesse clean hydrogen manufacturing technology, in particular the electrolyzers so critical to production. And, just as importantly, there should be greater availability of competitively priced renewable energy-produced electricity – as more wind and solar plants come on stream – to fuel the gas-generating electrolysis process.

How soon this happens, though, will depend on the pace at which governments and energy giants commit to and finance 'green hydrogen'. Encouragingly, a growing number of countries are rolling out policies to promote the power source, with the European Commission notably identifying it as playing a central role in decarbonizing Europe's industries. But some question the willingness of the gas industry operators to fully embrace clean hydrogen, arguing that they are more interested in advancing forms of hydrogen created from natural gas as a means of handling their existing business model a lifeline.

In a recent report, the research and campaign group Corporate Europe Observatory claimed that concerted lobbying from the gas industry has meant that European hydrogen output will be fuelled by fossil fuels rather renewable energy for the next few decades at least. Yet there are signs that Brussels is keen to forge ahead with the cleaner variant, as high gas prices and carbon emission costs mean it can be produced more competitively. "Green hydrogen today can even be cheaper than grey hydrogen," said European Commission President Ursula von der Leyen in late November.

For the Commission and other authorities invested in seeing clean hydrogen become more economically viable, there has been a further encouraging development: indications that the high costs of distribution over long distances, owing to the low density of the gas, could come down significantly by converting it into ammonia, which is much easier to liquefy, store and ship. Once it reaches its destination, it is reconverted into hydrogen, with new research suggesting that some of challenges involved in the process can be overcome. The use of ammonia as a carrier opens the way for the cost-effective generation of green hydrogen in the Middle East with its abundant renewable energy resources.

While the 'green hydrogen' sector is still in its infancy, its potential is considerable, as many countries are recognizing. Research and development, driven by international confidence in its utility, will likely push down production and transportation costs, strengthening its credentials as a viable green energy source.