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Green hydrogen - Statistics & facts

In a bid to reduce the world’s carbon footprint, the energy industry is turning towards a previously under-utilized energy carrier – hydrogen. Particularly the kind derived through renewable-fueled electrolysis and commonly referred to as green hydrogen has drawn major interests. Although it is the most abundant chemical element in the universe, hydrogen does not occur freely in nature and has to be produced using other energy sources. As of 2020, the most common source for global hydrogen production was methane via steam-reforming, with renewable electrolysis only accounting for 0.3 percent. However, the industry sees great potential in exploiting renewables, particularly non-dispatchable excess wind and solar power, to manufacture green hydrogen. In the first four months of 2021 alone, the worldwide green hydrogen project pipeline nearly doubled, with Europe and Australia the most popular locations.

How green hydrogen may help decarbonize multiple industries

From heating our homes to fueling our cars and storing excess energy, proponents have touted hydrogen as a key player in decarbonizing the economy. In the transportation sector, hydrogen fuel cells power engines by creating electricity, emitting only water vapor. In the heavy industry sectors such as cement and steel production, some companies have started exploring the use of green hydrogen instead of coking coal. Meanwhile, in the energy sector, renewable electricity may be converted into hydrogen and stored for later use. It is also transportable in the form of ammonia or once liquefied. Landed costs of hydrogen are forecast to vary depending on the shipping route and form in which they are transported, with liquefied hydrogen potentially a cheaper alternative to ammonia.

Why critics are cautious

Some of the major drawbacks addressed by critics circle around the costs and uncertainty over the performance of a hydrogen economy. For example, when looking at alternative transportation fuel efficiency, hydrogen fuel cells were found to only reach an overall efficiency of 30 percent compared with 77 percent for directly chargeable battery electric vehicles. There have also been some studies on the feasibility of hydrogen-heated homes suggesting natural gas would remain the cheaper choice as renewable electricity prices would have to decrease by more than 50 percent. Green hydrogen production costs currently range between three and 7.5 U.S. dollars per kilogram, with fossil fuel-derived hydrogen still far cheaper. Additionally, green hydrogen production has yet to be attempted on a utility-scale. As of April 2021, the largest operational producing site was the Air Liquide-owned electrolyzer in Quebec, Canada, with a capacity of 20 megawatts. This is significantly smaller than the 67 gigawatts HyDeal Ambition project announced in February 2021 by a consortium of European developers, which aims to deliver green hydrogen to consumers at 1.5 euros per kilogram before 2030.

What to look out for in the future

The early years of wind and solar energy use may be a lesson for how the green hydrogen market develops in the future. As with wind and solar, much hinges on government support and incentives for alternative energy exploration to make renewable-sourced hydrogen a cost-competitive substitute. In 2020, the majority of worldwide hydrogen investments centered around fuel cell technology. Stringent goals for reaching carbon neutrality also stimulate greater participation among industry leaders. This is evidenced by the number of European oil and gas giants eager to foray into the renewable energy and hydrogen market, compared with a continued lack of enthusiasm noted by their U.S. competitors.

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Status quo

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Green hydrogen - Statistics & facts

In a bid to reduce the world’s carbon footprint, the energy industry is turning towards a previously under-utilized energy carrier – hydrogen. Particularly the kind derived through renewable-fueled electrolysis and commonly referred to as green hydrogen has drawn major interests. Although it is the most abundant chemical element in the universe, hydrogen does not occur freely in nature and has to be produced using other energy sources. As of 2020, the most common source for global hydrogen production was methane via steam-reforming, with renewable electrolysis only accounting for 0.3 percent. However, the industry sees great potential in exploiting renewables, particularly non-dispatchable excess wind and solar power, to manufacture green hydrogen. In the first four months of 2021 alone, the worldwide green hydrogen project pipeline nearly doubled, with Europe and Australia the most popular locations.

How green hydrogen may help decarbonize multiple industries

From heating our homes to fueling our cars and storing excess energy, proponents have touted hydrogen as a key player in decarbonizing the economy. In the transportation sector, hydrogen fuel cells power engines by creating electricity, emitting only water vapor. In the heavy industry sectors such as cement and steel production, some companies have started exploring the use of green hydrogen instead of coking coal. Meanwhile, in the energy sector, renewable electricity may be converted into hydrogen and stored for later use. It is also transportable in the form of ammonia or once liquefied. Landed costs of hydrogen are forecast to vary depending on the shipping route and form in which they are transported, with liquefied hydrogen potentially a cheaper alternative to ammonia.

Why critics are cautious

Some of the major drawbacks addressed by critics circle around the costs and uncertainty over the performance of a hydrogen economy. For example, when looking at alternative transportation fuel efficiency, hydrogen fuel cells were found to only reach an overall efficiency of 30 percent compared with 77 percent for directly chargeable battery electric vehicles. There have also been some studies on the feasibility of hydrogen-heated homes suggesting natural gas would remain the cheaper choice as renewable electricity prices would have to decrease by more than 50 percent. Green hydrogen production costs currently range between three and 7.5 U.S. dollars per kilogram, with fossil fuel-derived hydrogen still far cheaper. Additionally, green hydrogen production has yet to be attempted on a utility-scale. As of April 2021, the largest operational producing site was the Air Liquide-owned electrolyzer in Quebec, Canada, with a capacity of 20 megawatts. This is significantly smaller than the 67 gigawatts HyDeal Ambition project announced in February 2021 by a consortium of European developers, which aims to deliver green hydrogen to consumers at 1.5 euros per kilogram before 2030.

What to look out for in the future

The early years of wind and solar energy use may be a lesson for how the green hydrogen market develops in the future. As with wind and solar, much hinges on government support and incentives for alternative energy exploration to make renewable-sourced hydrogen a cost-competitive substitute. In 2020, the majority of worldwide hydrogen investments centered around fuel cell technology. Stringent goals for reaching carbon neutrality also stimulate greater participation among industry leaders. This is evidenced by the number of European oil and gas giants eager to foray into the renewable energy and hydrogen market, compared with a continued lack of enthusiasm noted by their U.S. competitors.

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