Low carbon hydrogen is “not cost competitive in most applications and locations” and the situation is unlikely to change unless there is “significant support to bridge the price gap,” according to the World Energy Council.
The analysis, published Tuesday, in collaboration with PwC and the U.S. Electric Power Research Institute, raised the question of where the funding for such support would come from, but also pointed to the industry’s growing awareness and positive impact to have.
In an announcement accompanying a briefing, the London-based energy organization said “environmental and political factors” are “sending encouraging signals to the market and generating growing interest”. Many pilot projects are being developed, built or commissioned around the world, she added.
Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a wide range of possible uses and can be used in sectors such as industry and transport.
It can be made in a number of ways. One method involves the use of electrolysis, where an electrical current breaks water into oxygen and hydrogen. When the electricity used comes from a renewable source such as wind or sun, some call it green or renewable hydrogen.
Currently, the vast majority of hydrogen production is fossil fuel based and green hydrogen is expensive to produce. However, efforts are being made to reduce the cost.
The US Department of Energy recently launched its Energy Earthshots initiative, saying the first of these will focus on bringing the cost of “clean” hydrogen down to $ 1 per kilogram (2.2 lbs) in a decade. According to the DOE, hydrogen from renewable energies costs around US $ 5 per kilogram today.
For its part, the World Energy Council said some countries “are actively developing bilateral partnerships to help build global hydrogen supply chains and ensure clean hydrogen supplies.”
“With the policies and technologies in place to enable hydrogen to scale, some projections suggest it could be cost-competitive with other solutions as early as 2030,” she added.
The sector appears to be at a crossroads with a number of issues to be resolved as it seeks to expand. The WEC report claimed the hydrogen economy was facing a “chicken and egg problem” in terms of supply and demand. Both, she argued, lacked “safe amounts of each other to build the value chain”.
There was also discussion of the benefits of using colors – including brown, blue, gray and pink, to name a few – to differentiate between different production processes.
“Color was used to simplify the discussion about the carbon footprint of hydrogen production,” the WEC report said, “but it has become more complex as there are no generally accepted colors for certain technologies and some disagreement about which Color suits which supplier. ”
The debate over color required clarity “as it could risk prematurely ruling out some technological avenues that could be more cost and carbon efficient,” it said.
Partnerships and projects
As discussions continue about the future of hydrogen, a number of companies are starting to get involved in the industry.
It was announced just this week that SSE Renewables and wind turbine giant Siemens Gamesa Renewable Energy have signed a letter of intent focusing on exploring opportunities related to the production and supply of so-called green hydrogen.
In a statement Monday, SSE Renewables said the partnership will involve itself and Siemens Gamesa to “place hydrogen production facilities in two selected onshore wind farms … from which the partners will begin producing and delivering green hydrogen through electrolysis” .
One of the wind farms will be in Scotland and the other in Ireland. Jim Smith, managing director of SSE Renewables, said hydrogen is “fast becoming an important and exciting part of the strategy to decarbonize power generation, heavy industry and transportation, among others.”