Green hydrogen is a key component of EU nations’ plans to become carbon neutral by 2050.
Despite bold intentions, implementing a hydrogen economy could be extremely expensive and time-consuming, endangering the continent’s economic expansion and potentially impeding decarbonization efforts.
The expansion of its sources (solar and wind) to replace natural gas and coal is encouraged by EU renewable energy policies.
According to research firm Rystad Energy, with the help of incentives like the US Inflation Reduction Act and support programs in Europe, the production of green hydrogen will increase to 24 million tonnes by 2030, creating 212 GW of the electrolyzer.
The keystone of green hydrogen
With the EU intending to invest tens of billions in hydrogen subsidies and broad legislative support, green hydrogen has emerged as a pillar of industrial policy and decarbonization initiatives.
The current strategy, however, necessitates a substantial capital investment because it takes a lot of energy to produce green hydrogen, which keeps it pricey and scarce.
The EU promotes all hydrogen applications without considering their possibilities, despite the fact that many hydrogen applications do not exist on a big scale, neither commercially nor in terms of climate change.
Group for Gas and Nuclear Energy
Natural gas and nuclear energy lobbyists are working on strategies to maintain their industries for many years to come.
I found a new approach that is congruent with the momentum of carbon neutrality, by lobbying for big “green” hydrogen programs, as opposed to directly supporting natural gas and nuclear power.
Although concerns regarding hydrogen sustainability have mostly centered on its color, green hydrogen is typically created through electrolysis using renewable electricity. The problems linked with hydrogen are, however, more distant.
Large-scale green hydrogen production requires significant investments and runs the risk of diverting significant amounts of renewable electricity away from carbon-reduction technologies that can be implemented more quickly and cheaply, potentially resulting in the continued use of gas and nuclear power.
Preparation
By 2030, the EU wants to generate 20 million tonnes of green hydrogen from a system that uses only renewable energy sources, including domestic production and imports.
Although decarbonization options are prepared, it is doubtful that the hydrogen sector will be able to deliver the necessary growth. Direct electrification can help reduce the carbon footprint of energy systems, together with improvements in building, industrial, and transportation energy efficiency.
Massive financial investments are needed to boost electrolysis capacity, which could have a negative impact on national and EU resources.
As part of a package to help the deployment of renewables and energy efficiency, Bloomberg New Energy Finance has assessed the investments necessary to reach EU targets by 2030 at €24 billion to €42 billion ($25.34 billion to $44.35 billion).
It is predicted that raising the proportion of hydrogen in the gas network to 20% will result in price increases for end users of up to a third.
The price differential between hydrogen and natural gas prevents citizens in Union member nations and its citizens from accepting further price increases linked to the production of energy from green hydrogen.
Struggle for Renewable Energy
By promoting methods focused on direct electrification and energy efficiency, it will be necessary to significantly expand renewable energy projects from solar and wind power in order to produce substantial amounts of green hydrogen.
The EU’s predictions for renewable energy sources demonstrate that they will not be adequate by 2030 to completely decarbonize the energy industry and produce the requisite levels of green hydrogen.
Given the fierce competition for resources needed to generate solar panels and wind turbines, more renewable sources of hydrogen production also tend to result in higher prices.
Making ensuring that the creation of green hydrogen does not make it harder for renewables to decarbonize the energy system more broadly is a very difficult task.
According to many experts, green hydrogen can only benefit the environment if it exclusively uses additional renewable electricity. As a result, EU policymakers are considering loosening regulations on green hydrogen so that it can be produced in large quantities over the course of the next ten years.
Next steps
International observers contend that Europe shouldn’t stake its route to decarbonization on a technology that hasn’t demonstrated its capacity for large-scale sustainable production because the scale of future hydrogen production is crucial.
In order to obtain the much-needed financial resources from investments to supply renewable energy sources, energy efficiency, and energy security, hydrogen assistance for industrial competitiveness could translate considerably.
Worldwide reports have indicated that by 2050, with 270 million tons of production, green hydrogen created through water electrolysis could account for nearly 48% of all renewable energy production.
A massive 12000,43 TWh of electricity will be needed for this level of production.
