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The energy crisis in Europe promotes green hydrogen. Is this ultimately a realistic option?

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It has become abundantly clear how the Russian invasion of Ukraine led to a rise in natural gas prices, millions of Europeans struggled with excessive energy bills and how other governments were pressured to help and support alternative sources of power. .

After nine months of war have passed, a glimmer of hope appears before the crisis when it comes to the future of the continent.

Rise in gas prices has made green hydrogen – specifically made with renewable energy – suddenly seem much more economical than before, boosting investment and interest in an area that could help the bloc itself reduce carbon emissions.

Analysts and industry players say this is welcome news, but we shouldn’t be very happy, because this change means that all types of energy are expensive today, and Europe still needs to make a competitive green hydrogen economy. ,

“We still have to do our homework to increase production and then improve technology to improve production,” said Euroneuse Next, head of New Energy Business at Siemens Energy.

“So the challenge for us is the same. We have to work on reducing costs”.

Gray hydrogen versus green hydrogen

Hydrogen, a highly flammable gas that can store and distribute energy, is the simplest and most abundant element on Earth, but it is not usually present in its free form and must be obtained from compounds that include water, coal, natural gas or biomass.

Hydrogen has long been used as a rocket fuel, in oil purification, to produce ammonia for fertilizers, and to make steel and chemicals.

But its production usually relies on natural gas or coal, in processes that emit large amounts of carbon dioxide. This type of fossil hydrogen is usually referred to as “grey” hydrogen.

Industry experts estimate that about 95 percent of hydrogen production currently uses fossil fuels and produces as much CO2 as the combined emissions of the UK and Indonesia.

“Green” hydrogen, on the other hand, water is produced using renewable energy sources, such as air and solar energy, in its two components: water and oxygen.

Experts say this type of “clean” hydrogen could replace fossil fuels in areas struggling to reduce carbon emissions because they can’t easily switch to electricity — heavy industries, such as steelmaking, or think heavy transportation.

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If the world is serious about reaching carbon neutrality by 2050, the G7’s hydrogen use could be four to seven times what it was in 2020 by mid-century. A new report From the International Renewable Energy Agency (IRENA).

European Commission adopted Hydrogen Strategy of the European Union In July 2020 and the Now estimate The share of hydrogen in the European Union’s energy mix could rise to 13-20 percent by 2050.

Another type of hydrogen is “blue” hydrogen, which is still fossil fuel based but uses carbon capture and storage technology to remove these emissions from the air.

This method can make fossil fuel infrastructure relatively simple with carbon removal technique.

On Tuesday, for example, total energies and air liquid announced They were teaming up to convert Total’s former oil refinery in central France’s Grandpete into a “biorifine” producing a “biorifine” from Akshaya and low-carbon hydrogen, primarily for jet fuel.

Some industry experts have argued that green hydrogen could be a stopgap solution in the coming decades to reduce carbon emissions from blue hydrogen before it kicks in.

But the war in Ukraine may have followed this date in quick succession to some extent.

‘Very cheap’ to ignore

Since Russia launched its assault on the country in February, natural gas prices in international markets have risen by more than 70 percent, leading to an increase in the cost of both gray and blue hydrogen.

While these prices are now down slightly, according to Kofi Mbuk, one think tank is a senior clintech analyst in a carbon tracker.

Within months, Ukraine War also invested 73 billion dollars (71 billion euros) in new investments in Green Hydrogen, he wrote in it. A recent report about the subject.

The European Union has launched a €3 billion Green Hydrogen Bank to support the region, while the United States has introduced a massive $3/kg tax credit for green hydrogen production through its Inflation Act (IRA).

Mbook told Euronuse Next that the US move has proven to be a remarkable boon, dropping the cost of new green hydrogen products below $2/kg where it has become “very cheap” to ignore.

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Siemens Energy’s Inochesy said his unit has been monitoring more cases since the war in Ukraine, but more in the US than in Europe.

He told Euronuse Next: “What moves fast is America. With Ira, we see significant pressure from US companies to gain capacity and I think it’s great for us.”

Bringing hydrogen to ‘out of niche’

The energy crisis in Europe has undoubtedly brought green hydrogen into the news.

“Hydrogen can be a game changer for Europe. It is important to diversify our energy sources and help reduce our dependence on Russian gas,” said Ursula von Der Leyen, President of the European Commission. Said in Sept At the unveiling of the European Union’s new Green Hydrogen Bank.

“We need to scale up this niche market.”

If clean hydrogen is still a niche market today, it’s because a number of key factors still prevent it from becoming an attractive and sustainable alternative energy solution.

An important renewable energy source is; To really increase green hydrogen, a huge and reliable supply of cheap renewable energy is needed, such as wind, solar or tidal energy.

“We need to shorten the approval procedures for sustainable projects. We need to build infrastructure for both hydrogen and power distribution,” emphasizes Inosenji.

“We need to expand innovation, we need to expand infrastructure. And that’s the only way to see hydrogen rising at the same time.

Siemens Energy is taking steps towards renewable energy and has just received the green light to take full ownership of wind turbine manufacturer Siemens Gamesa.

Two companies are currently working on a commercial offshore wind turbine that produces hydrogen through electrolysis.

The project will be a success in renewable hydrogen production – if the developers find a way to save the water that goes into the electrolyser to produce hydrogen, and if they find solutions that reduce the need for offshore maintenance. .

Inosenzi said the plan is to trial technology on the coast and then transfer it to offtate, with the first such wind-to-hydrogen turbine reaching a time limit, a small German island in the North Sea, the last in 2025 or 2026 .

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Hydrogen import and project subsidies

Another reality is that it is not possible to produce enough green hydrogen on our own to achieve pure-zero emissions for Europe.

It will have to import parts of the available land and the weather conditions required to produce renewable energy – such as Australia or parts of Africa and Latin America, and general energy producers of the Middle East, including solar, are also high. The capacity is power generation.

Europe will need to invest in infrastructure to import and ship this hydrogen.

The good news is that the existing pipelines and terminals for natural gas can be partly renovated for hydrogen, noa van plough, International Energy Agency (IEA) for Hydrogen Advisor and Gasunie Gasuni advisor. Euronuse told Next Last year.

Last, but not least, the construction of the electrolyzer – the technology required to extract hydrogen from the water – will have to be increased to reduce costs.

On that note, Siemens Energy is betting on a new joint venture being formed with air-liquid to produce an industrial-scale proton exchange membrane (PEM) electrolyser.

Production is ready to start in the second half of 2023 and reach an annual production capacity of three gigawatts by 2025.

As the global race for hydrogen heats up, Inochery said there is a risk, as we’ve seen with photovoltaic panels in China, most of the electrolyzers used in green hydrogen projects are made outside of Europe.

“We are not yet at the cost level where we need to be. And that is why government support is important and necessary,” he said.

Karbonn Tracker’s MBUK agreed. He said: “We need a direct flat-rate subsidy scheme – any strong subsidy on green hydrogen that brings the price down to $2/kg or less than $2/kg,” he said.

“Then the whole area is fully competitive. And what will happen that he will quickly unlock private funding”.

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