Hydrogen has been the fuel of the future for decades, always promising to deliver huge benefits in about five years’ time.
Now it looks like the future has arrived as seven of the biggest green hydrogen project developers come together to launch the Green Hydrogen Catapult Initiative in a bid to increase the production of green hydrogen 50-fold in the next six years.
Green hydrogen is produced using renewable energy and electrolysis to split water and is distinct from grey hydrogen, which is produced from methane and releases greenhouse gases into the atmosphere, and blue hydrogen, which captures those emissions and stores them underground to prevent them causing climate change.
The new initiative aims to cut the cost of green hydrogen to less than $2/kg, which would help to cut emissions from the world’s most carbon-intensive industries including steelmaking, shipping, chemicals production and power generation. The founding partners are Saudi clean energy group ACWA Power, Australian project developer CWP Renewables, Chinese wind turbine manufacturer Envision, European energy giants Iberdrola and Ørsted, Italian gas group Snam, and Yara, a Norwegian fertilizer producer.
Recent analysis suggests$2/kg is a potential tipping point that will make green hydrogen and its derivative fuels competitive multiple sectors, including steel and fertilizer production, power generation, and long-range shipping. Green ammonia, which is made from green hydrogen, is being tested as a possible replacement for fossil fuels in thermal power generation, which would greatly decrease the emissions intensity of existing energy infrastructure.
The companies hope to see 25GW of green hydrogen production by 2026, which would have a major impact on the emissions of heavy industry and transportation sectors.
“From an industry perspective, we see no technical barriers to achieving this, so it’s time to get on with the virtuous cycle of cost reduction through scale up,” said says Paddy Padmanathan, CEO of ACWA Power. “Having led the race to deliver photovoltaic energy at well-below US$2 cents per kilowatt-hour, in certain geographies, we believe the collective ingenuity and entrepreneurship of the private sector can deliver green hydrogen at less than US$2 per kilogram within four years.”MORE FOR YOUIs Carbon Capture Another Fossil Fuel Industry Con?Sustainable Fashion Wants Brands To Redefine Business GrowthTrouble With Predicting Future Of Transportation Is That Today Gets In The Way
Scaling up green hydrogen will be essential to helping global economies to achieve net zero emissions by 2050 and limit global temperature rises to 1.5C.
Green hydrogen could supply up to 25% of the world’s energy needs by 2050 and become a US$10 trillion addressable market by 2050, according to Goldman Sachs. A number of countries have recently published national hydrogen strategies, including Australia, Chile, Germany, the EU, Japan, New Zealand, Portugal, Spain and South Korea.
To meet the target of the Catapult will require investment of roughly US$110 billion and create more than 120,000 jobs, so it will also play an important part in helping economies to recover from the impacts of COVID-19.
Forbes Innovation
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The group is looking for more members – “committed businesses with aligned vision and gigawatt-scale projects under development, as well as mission-aligned investors, customers, and city and regional governments” to participate as the initiative takes shape and builds global momentum in advance of the next UN Climate Summit, scheduled to be held in Glasgow in November 2021.
Investment in green hydrogen production is set to exceed $1billion a year by 2023 as the costs of both renewable power and electrolyser technology fall and governments introduce supportive policies, according to IHS Markit, which said before the announcement of the Green Hydrogen Catapult that there was already a pipeline of 23GW of electrolysis projects, up from current capacity of just 82MW.
“Investment in electrolysis is booming around the world. The pipeline through 2030 is for over 23 GW of capacity to be developed—more than 280 times current capacity,” said Catherine Robinson, executive director, Hydrogen and Renewable Gas at IHS Markit.
Green hydrogen production costs have fallen by 40% since 2015 and are expected to fall by a further 40% through 2025.