The rules will make incorporating hydrogen into the existing gas infrastructure much easier. In Europe, the green hydrogen industry will be officially launched in 2023. Provide developers with the chance to launch profitable initiatives and sign final investment agreements. Green hydrogen accounts for just approximately 1% of worldwide hydrogen generation.
According to the Institute for Energy Economics and American Financial Analysis website, analysts believe that the year 2023 will see the real start of hydrogen projects in Europe, particularly green ones, but important decisions will be made in 2022, the crucial year for establishing a prosperous phase of hydrogen production in the old continent.
The European Commission’s hydrogen and carbon-neutral gas package, issued on December 15, will usher in a golden era of hydrogen and give clarity on the market environment for enterprises active in Europe’s developing hydrogen economy.
According to a report issued last month by S&P Global, regulations will make it simpler to incorporate hydrogen into existing gas infrastructure and remove regulatory barriers, giving nations like Germany, France, and Spain greater clarity on executing their national hydrogen production objectives.
According to Delta EE, UK-based energy research, consultancy, and services organization, Europe will see more than 1.5 gigawatts of green hydrogen installed by the end of 2023 as a result of government stimulus initiatives announced this year.
According to Inlite, a global energy transition website, the European Union’s objective of 6 GW of renewable hydrogen generation by the end of 2024 is achievable and likely to be met.
This was shown in a research by Dr. Robert Bloom titled “2022 is the Year of Bridging the Gap Between Green Hydrogen Ambition and Reality in Europe.”
Germany, the United Kingdom, and the Netherlands, according to Bloom, will be the first nations to establish new green hydrogen support programs, allowing developers to build profitable projects and sign final investment decisions.
Incentives and assistance
Dr. Robert Bloom, director of the service at Delta EE, stated that understanding what incentives and other types of assistance would be available to provide hydrogen developers in Europe assurance to continue forward is critical.
The bulk of projects that have reached the planned stage or are currently under construction for 2022 may be categorized as “confirmed” according to the Delta EE database.
Only one-quarter of the year is “confirmed” in 2023, while three-quarters of projects remain unknown, highlighting the importance of decisions taken in 2022.
There is evidence of a CFD method in the UK and Germany, according to Dr. Robert Bloom, which would allow some risks to be removed from particular projects and project regulators to feel more secure in scaling green hydrogen.
It’s worth emphasizing that, in the context of the energy revolution, green hydrogen is gaining a lot of traction; it’s attracting unprecedented interest from innovators. It’s worth noting that green hydrogen accounts for just around 1% of worldwide hydrogen generation or roughly 300 megawatts of electrolyzer capacity.
Bloomberg New Energy Finance, on the other hand, publishes nearly daily announcements of new green hydrogen projects, totaling over 120 gigawatts of announced capacity through 2030 and beyond.
Projects involving hydrogen in Europe
Dr. Robert Blum, Delta EE’s head of service, said the Dutch government established a €35 billion climate and transition fund in January.
According to his interview with the British quarterly Recharge website, this saves 15 billion euros for the decarbonization industry of new energy carriers, although Dr. Robert Bloom did not explain how this money would be spent.
While the European Commission has no intentions to reveal precise financial plans, it has declared that 40 gigawatts of renewable energy would be installed by 2030 and that 50% of hydrogen used in industry will be renewable by the same year.
Delta EE, an energy research, consultancy, and services firm, predicts that this year’s green hydrogen projects in Europe will see development in the “tens of megawatts” level, totaling 481 megawatts (compared to 118 megawatts at the end of last year).
In addition, in 2023, development projects in the “hundreds of megawatts” range will be added, bringing the total installed capacity to 1.65 gigawatts, an increase of more than 1 gigawatt in only one year.
Based on stated projects, this amount will climb to 4.25 GW in 2024, but Dr. Robert Bloom forecasts that 2.2 GW of undisclosed projects will be operational by then, much exceeding the EU’s 6 GW ambition.
Given the possibility of verified national green hydrogen subsidy announcements this year, Dr. Robert Bloom believes a target of 6 GW by 2024 is likely.
Production and demand for hydrogen
Dr. Robert Bloom, Delta EE’s Director of Service, stated, “The Delta EE project now tracks slightly over 6 GW of electrolyzer capacity projected to be operational in Europe by 2024,” according to Inlite.
This capacity is more than the 1.6 GW recorded just six months ago, and it will increase to 10.9 GW in the following five years, reaching 10.9 GW by 2026.
In terms of stated capacity, Germany, Spain, Denmark, the Netherlands, and, shortly, the United Kingdom and Sweden, are the top six nations.
Dr. Robert predicts that the new project capacity will approach 50 megawatts in 2023, up from 6.5 megawatts in 2022, and that attention will move from experience to commercial expertise in the coming years.
Hydrogen (green vs. blue)
According to Dr. Robert, Delta EE’s director of service, preliminary results from the company’s project database show that blue hydrogen projects are significantly less than green hydrogen projects.
He stated that while there are less than 100 green hydrogen plants throughout the world, they are larger, with a capacity of more than 100 megawatts.
He pointed out that blue hydrogen had issues such as reliance on fossil fuels, sensitivity to natural gas price changes, expensive capital expenditures, and defaulting assets.
