Gas prices in Europe and Asia are at record highs, so even pricey hydrogen is starting to appear more appealing. However, if hydrogen is to become a viable alternative to fossil gas, manufacturing costs must fall dramatically and output must expand.
On March 21, German Vice-Chancellor Robert Habeck paid a visit to the United Arab Emirates (UAE), kicking off new cooperation between two burgeoning hydrogen firms.
But, more crucially, he stressed the role that this “future fuel” may play in preventing climate change and allowing countries to break free from their existing geopolitical ties.
Hydrogen has three major advantages over traditional fossil fuels: it is ubiquitous, non-toxic, emits no carbon dioxide, and can be obtained from a variety of sources.
It may take the place of natural gas in energy, industry, and chemical manufacturing, as well as oil in long-distance transportation. Hydrogen is growing more appealing as Russia’s war in Ukraine grinds on and natural gas prices in Europe and Asia hit new highs.
Because widespread hydrogen utilization is still in its early stages, estimations of its potential vary greatly.
Hydrogen might cover up to 22% of world energy demand and 25% of overall oil consumption by 2050, according to projections from the International Energy Agency, the International Renewable Energy Agency, the Hydrogen Council, and Bank of America.
Currently, practically all accessible hydrogen is “gray,” meaning it is generated without carbon capture and storage from oil, gas, or coal. It is practically never traded globally; instead, it is manufactured and consumed in the industrial enterprise’s own activities.
It’s also difficult to transport over long distances due to its low density, the fact that it only condenses to a liquid at extremely low temperatures, and the fact that it’s made up of very small molecules that might quickly escape confinement devices.
It’s also a costly procedure. The cost of green hydrogen per million British thermal units ranges from $20 to $50. Blue hydrogen is less expensive, costing between $ 11 and $ 15 on average. Since 2005, natural gas prices in Japan and Europe have averaged between $7 and $11, whereas gas produced in the United States costs roughly $4.
International gas prices, on the other hand, have risen as a result of the rebound in demand following the epidemic, a lack of new production investment, and lower Russian supply to Europe. As a result, even the most costly hydrogen is becoming more appealing.
If hydrogen is to realize its full potential, production must expand dramatically – up to eight times by the middle of the century, according to some estimates – requiring a $ 15 trillion investment.
New hydrogen must also be low in carbon, i.e. blue and green, and must be able to prove it. Similar to the worldwide liquefied natural gas sector, which has emerged since the 1960s, a full trade chain of value will have to be constructed during these years of industrial construction.
Furthermore, manufacturing costs must be decreased greatly, which may be accomplished by significantly increasing the output of electrolyzers – devices that break down water into hydrogen and oxygen – increasing their productivity, and enhancing carbon storage to absorb blue hydrogen.
Precious metals like palladium and platinum, which must be mined in vast amounts or substituted with alternatives, are used as raw materials in certain cells.
Long-distance transportation from producing sites to prospective customers is also required. Pipelines, both for natural gas and at closer distances, might be among them. However, as with the delivery of liquefied hydrogen, although in combination forms, such as liquid organic hydrogen carriers, ammonia, or methanol, the majority of international trade will be carried out by ships.
States may also employ hydrogen to create a local value chain and an economic environment by producing certified low-carbon products for export, such as steel.
Before invading Ukraine, Russia, the world’s greatest natural gas producer, began planning a hydrogen strategy. Those intentions have now vanished, allowing other players to enter the fray.
Europe, particularly offshore wind farms, intends to create a significant amount of its own hydrogen. However, European countries, as well as Japan, South Korea, and a number of other countries, will unavoidably have to import hydrogen. Germany chooses green hydrogen for ideological grounds, but Japan, the United Kingdom, and others are open to blue.
Nations with inexpensive gas resources, such as the Gulf countries and maybe the United States, as well as those with an abundance of cheap renewable energy (wind, solar, or hydropower), coastal access, and business-friendly policies, will be the primary exporters of hydrogen. Saudi Arabia, the United Arab Emirates, Oman, North Africa, Australia, and Chile have risen to the top of the green hydrogen production rankings.
Perhaps the most advanced significant new effort is Saudi Arabia’s massive hydrogen project in Neom, a proposed new metropolis in the kingdom’s northern region.
This explains Germany’s keen interest in collaborating on hydrogen production and transportation with the UAE and other Gulf countries.
Habek will not be the only high-ranking politician to seek hydrogen in the Middle East. Hydrogen is swiftly emerging as a big potential for the area to add a new sustainable economy to its hydrocarbon wealth as the zero-carbon and energy security imperatives become progressively more urgent.
Syria’s future supply chain
Energie Steiermark is laying the groundwork for increased energy independence with a pilot project in Gabersdorf. The first facility for the generation of “green” hydrogen will be erected in Austria in the next months under the name “Renewable Gasfield.”
From the outset, the system is cost-effective
The initiative has been in the works since 2019, and it was officially launched on Friday. Every year, more than 300 tons of hydrogen will be generated at the facility. “Having energy security in the state is critical,” said state councilor Johann Seitinger during the groundbreaking ceremony.
The new system, according to Energie Steiermark, can be run cheaply right away. The project’s first big customer, Wolfram Bergbau und Hütten AG, has already been won over. The corporation will take over 70 tons of hydrogen generated in Gabersdorf as a first step.
Industry and buses require energy
The project will be built on three pillars in the medium future. In addition to providing big industrial clients, the project will provide hydrogen for 50 public transportation vehicles in Graz in the future. Biogas will be processed at a methanation facility and injected into the gas network starting in 2023.
A little more than ten million euros will be invested in the plant’s expansion, which should begin delivering hydrogen by the end of the year.
“Green hydrogen, biomass, and biogas, as well as solar electricity, will become increasingly important.” Hans Seitinger is a member of the Provincial Council.
The project was also made feasible thanks to a large amount of financing. The environment and energy fund, for example, provided 1.7 million euros.
