Green hydrogen 'must balance need for speed with learning process'

Coordinating policies and investment to support the creation of the entire green hydrogen value chain will take a vast effort but bring huge rewards, according to wind industry experts

Building an entire supply chain while sorting out regulation and policy will be a challenge (pic credit: ITM)

Green hydrogen can accelerate renewable-energy deployment and will be needed to decarbonise hard-to-abate sectors, according to panellists discussing renewable hydrogen at the recent WindEnergy Hamburg digital event.

It will require a massive effort from policymakers and industry to accelerate the supply chain’s various components at the same time and to settle regulatory challenges — all while knowledge of the technology is developing. But industry should be excited about its potential to offer new revenue streams, the panel said.

The sector has been boosted by ambitious targets set in 2020 — including the EU aiming to increase the bloc’s electrolyser capacity from about 1GW today to 40GW by 2030 through a new hydrogen strategy — as well as individual projects being announced.

Ruud Kempener, European Commission policy officer, said: “We need much more [renewable energy] if we want to hit our 55% [greenhouse gas emissions reduction] target.

“I think hydrogen can accelerate and incentivise those categories of markets that have not come before.” 

This is because hydrogen can be used to power applications that might otherwise prove difficult to electrify, such as transport, heavy industry and heating.

Early support 

Renewable hydrogen will need lots of support – political, regulatory and financial — especially early on, panellists agreed. 

While costs for electrolysers and electricity are coming down, renewable hydrogen — like other renewable-energy sources in the past — will need policies in place to make it more economically viable, suggested Marcus Newborough, development director at UK-based electrolyser manufacturer ITM Power.

“With subsidy in the early years, there will be no need for it in the later years,” he said. “We just need the right support in the next few years, and in the 2030s and beyond there will be great benefit to be had.”

Meanwhile, Denis Thomas, EU regulatory affairs and business development manager for renewable hydrogen at fuel-cell specialist Hydrogenics, believes climate targets cannot be achieved without green hydrogen.

He suggested that EU member states could invest in infrastructure to help transport hydrogen over long distances and legislate for a market mechanism to reflect its higher value. 

“Renewable hydrogen should have higher value than grey hydrogen — made from natural gas — because it will bring us to decarbonisation,” Thomas added.

Holistic approach

Better known for its oil and gas activities, Shell plans to use output from its subsidy-free

Hollandse Kust Noord wind farm in Dutch waters to produce green hydrogen.

Its commercial manager for hydrogen projects, Katharina Gru¨nberg, pointed out that all of these aspects need to be coordinated so that the entire value chain can be developed simultaneously.

“We need to make sure support schemes cover everything from the demand side through to the infrastructure side and electrolyser manufacturing, and make sure it all comes up at the same time,” she said.

“To have everything together (in project development), and to have that holistic approach — that is what support schemes need to be addressing.”

All of these changes will need to take place against a backdrop of an ever-increasing understanding of green hydrogen, as a growing number of research and pilot projects are carried out.

One of the topics still being debated is the optimal location for electrolysers: should they be close to the wind farm where it is more straightforward to market output as purely “green” hydrogen, or closer to load centres, thereby minimising the need for difficult long-distance transportation?

This ongoing learning process makes it difficult to enact policies that are sustainable in the long term, panellists agreed.

Torben Brabo, board member of Gas Infrastructure Europe, noted: “Going ten years back, when we legislated for the gas market, we had a lot of knowledge and understanding, but now we are developing the future power system with new facts [about renewable hydrogen] in our inboxes every day.

“There is a risk that we will go down one lane very quickly, and we will see in a few years that we should have gone down the other lane.”

Meanwhile, the European Commission’s Kempener summed up the challenge for policy makers and civil servants: “This is going to be a very dynamic market. How can we make sure that we put instruments in place now that we do not need to reorganise in a year, or two or three years’ time?

“How can we make people confident that they will be there, so they have a horizon to invest? Still, industry and government will need to act and invest soon, given the need to build nascent supply chains and given projects’ long lead times. 

Panellists agreed that renewable hydrogen will accelerate deployment of wind and solar and will be needed for decarbonisation — but there are also financial incentives.

“Renewable hydrogen is a much bigger piece of cake than renewables,” said ITM’s Newborough. “That should motivate all of us to find solutions that have long-term potential to store energy.”