Renewable electricity from wind and solar can play a major role producing green hydrogen, and steps are already being taken to use offshore wind
Hydrogen Envoy for the Ministry of Economic Affairs & Climate Policy, the Netherlands, Noé van Hulst says there is growing international consensus that clean hydrogen will play a key role in the world’s transition to a sustainable energy future, including ‘green hydrogen’ from renewable sources such as wind energy. He also anticipates a growing role for offshore wind in producing green hydrogen.
“Researchers have found that clean hydrogen still costs too much to enable it to be widely deployed. Prices may not come down sufficiently until the 2030s, according to some estimates. But despite the uncertainty surrounding the future of clean hydrogen, there are promising signs that it could become more affordable sooner than expected,” says Mr van Hulst.
Where the hydrogen comes from is important. At the moment, it is mainly produced from natural gas which generates significant carbon emissions. That type is known as ‘grey’ hydrogen. A cleaner version is ‘blue’ hydrogen, for which the carbon emissions are captured and stored, or reused. The cleanest of all is ‘green’ hydrogen, which is generated by renewable energy sources.
“Green hydrogen’s price depends on renewables and different factors come into play here,” said Mr van Hulst. “The first driver is the cost of electrolysis, the process through which hydrogen is produced from water using renewable energy. Total global electrolysis capacity is limited and costly at the moment, but most industry experts expect that a significant increase in electrolysis capacity will reduce costs by roughly 70% in the next 10 years. The most critical factor for the cost of green hydrogen, however, is the price of the green electricity used in the electrolysis process.”
As Mr van Hulst noted, the cost of generating solar and wind energy has come down spectacularly in the past decade, and this should prompt caution about what will happen to the cost of green hydrogen in the future. Like wind and solar costs, the cost of green hydrogen may come down a lot faster than expected.
Green electricity prices have come down significantly. Experts expect them to decrease even more in the near future. “There is a real prospect of mass producing green electricity for domestic use – and also green hydrogen,” said Mr van Hulst.
Apart from a reduction in the cost of electrolysis, mass production of green hydrogen will also require large volumes of cheap green electricity, but as he noted, a projected scale-up in offshore wind production in northwest Europe is expected to kick in over the next 10 to 15 years. By the early 2030s, mass deployment of green hydrogen may have begun there.
As he also noted, some big industrial players, like Engie, have set an explicit cost target for green hydrogen. These ambitions are long term, but they do not preclude significant use of green hydrogen in the next few years. It is already happening in Europe, where Danish wind power company Ørsted recently announced that its bid in an offshore wind auction in the Netherlands includes producing green hydrogen for industrial use.
“That shows that new business models are being invented as we speak, raising the possibility of positive surprises ahead,” said Mr van Hulst. So too does a proposal from Shell, Siemens and TenneT to organise combined auctions of offshore windfarms for electrolysis, which would imply connecting the value chain in one single tender.
“The clean hydrogen future has already begun,” Mr van Hulst concluded.