A new World Energy Council report has said that zero- and low-carbon hydrogen is not cost-competitive and has called for support to bridge the price gap.
Green hydrogen. Photo: Scharfsinn / Shutterstock
Green hydrogen. Photo: Scharfsinn / Shutterstock
Published earlier this week, the report called into question where this support would come from, though added that the increasing profile of hydrogen as a clean fuel should have a positive effect.
The London-based energy organisation said that "environmental and political drivers" were "sending encouraging signals to the market and prompting growing interest," adding that pilot projects were being developed all over the world.
It is anticipated that hydrogen - seen as a "versatile energy carrier" by the International Energy Agency - will play a major part in the energy transition because of its diverse range of applications.
Read more: Dow Benelux to build green hydrogen plant in the Netherlands
Hydrogen can be produced in several different ways. One method is through the use of electrolysis, whereby an electric current splits water into its component parts - hydrogen and oxygen. If that electricity comes from a renewable source, it is known as green hydrogen.
At present, most hydrogen is produced using fossil fuels because green hydrogen is expensive. There are, however, efforts in place to try and drive down the cost.
The US Energy Department recently launched the Energy Earthshots Initiative, part of the focus of which is on cutting the cost of green hydrogen down to $1 per kilogram in the next decade. At present, the cost of hydrogen produced by renewables is around $5 per kilogram.
The World Energy Council said that some nations were "actively developing bilateral partnerships to help form global hydrogen supply chains and secure clean hydrogen supply.
"With the appropriate policies and technologies to enable hydrogen scale-up, some projections suggest that it could be cost-competitive with other solutions as soon as 2030."
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The sector appears to be at something of a crossroads and is facing several issues as it seeks to expand. The WEC report said that the hydrogen economy was dealing with a "chicken and egg problem" in terms of supply and demand. The present situation is that both demand and supply lacked "secure volumes from the other to help establish the value chain."
The report also looked at the benefits of using other "colour" hydrogen - such as blue, brown, grey and pink - each of which pertains to the method of production.
"Colour has been used to simplify the conversation about the carbon footprint of hydrogen production,” the WEC’s report said, “but it has become more complex with no universally agreed colours for specific technologies and some disagreement as to which colour matches which supply."
The ever-increasing colour range required clarity, however, "as it could risk prematurely excluding some technological routes that could be more cost and carbon effective," the report said.
With discussions over hydrogen's future continuing, several companies are making strides in the nascent sector.
Read more: Siemens Gamesa to launch project to convert hydrogen from wind power
Earlier this week, it was announced that SSE Renewables and Siemens Gamesa had signed a deal to explore the opportunities related to the production and delivery of green hydrogen.
In a statement, SSE Renewables said the partnership aimed to "locate hydrogen production facilities at two selected onshore wind farms… from which the partners will begin production and delivery of green hydrogen through electrolysis."
One of the wind farms will be in Ireland, while the other will be in Scotland. Jim Smith, managing director of SSE Renewables, said hydrogen was "rapidly becoming an important and exciting component of the strategy to decarbonise power production, heavy industry and transport, among other sectors."
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