Green hydrogen to become $10 trillion market

Marsh says that “solar and wind projects don’t provide a lot of jobs on an ongoing basis.” But the manufacture of green hydrogen provides employment. a great deal more than if you construct battery manufacturing.

Hydrogen has been a “water on the road” mirage for decades: a pure, alluring, inexhaustible fuel that is ever in the distance but never at hand. Critics like Elon Musk believe it will always be that way. Since the 1990s, major manufacturers have invested tens of millions of dollars in hydrogen fuel cell programs; nevertheless, just 15,000 of these vehicles are currently in use in California, their primary market, compared to roughly 900,000 batteries and plug-in hybrids. But Marsh, who oversaw Plug Power for 14 years, is not moving in that direction.

Additionally, Plug expects sales to rise from US$ 900 million (R$ 4.8 billion at current exchange rates) this year to US$ 5 billion (R$ 26.7 billion) in 2026 and US$ 20 billion (R$ 106.8 billion) by the end of the decade as it expands its sales of hydrogen and the technology to manufacture it. As the company switches from being a consumer of hydrogen from other companies to a producer and seller, with net profitability in the years to come, Marsh also forecasts that operating profit will be positive by the end of 2023. According to Plug, the global market for green hydrogen will reach $10 trillion (R$53.4 trillion) in the next several years.

Most of the time, steam is used to extract hydrogen from natural gas, which releases carbon dioxide in the process. Out of the more than 100 million tons of hydrogen produced worldwide each year for industrial uses like steelmaking, oil refining, and agriculture, the US Department of Energy estimates that the nation produces about 10 million metric tons annually, almost all of it being “grey” hydrogen: made of gas and carbon pollution emissions.

However, a new technology that uses electrolyzers, which use electricity from renewable sources to split water into hydrogen and oxygen, to make the fuel is upending the clean energy industry. Marsh wants Latham, New York-based Plug to not only be a significant fuel producer but also a manufacturer of specialized tank trucks for delivering it to consumers and a supplier of electrolyzers that enable others to do so. you alone.

By the end of 2025, Plug’s green hydrogen plants should be able to produce 500 tons of fuel per day. In a transaction that could be valued up to $2.1 billion, Amazon plans to purchase more than 10,000 tons annually. 11 billion). Additionally, Plug Power will give Walmart the fuel necessary for 9,500 fuel cell forklifts for its warehouses. Additionally, the business is getting ready to offer electrolyzers to clients like New Fortress Energy, the energy project of Milwaukee Bucks owner Wes Edens, a multi-billionaire investor, for a large-scale hydrogen facility in Beaumont, Texas.

Marsh has so far raised $5 billion (R$27 billion), including an investment round with the South Korean firm SK Group worth $1.9 billion (R$10.2 billion). With projects being planned with partners in Belgium, France, Spain, Portugal, South Korea, and Australia, Plug has used the funds to develop 13 hydrogen refineries across the US and Europe, with building already underway in Georgia, New York, Tennessee, Texas, Louisiana, and California.

However, a significant obstacle for hydrogen is that it is inherently inefficient, requiring more energy to produce, compress, or liquefy while maintaining supercool temperatures than simply using the same electricity to power it. This is true whether hydrogen is produced from water and renewable energy or methane. the battery.

Large-scale solar and wind farms have already produced more electricity than the infrastructure can manage at peak times, according to proponents, particularly in the US Midwest and Southwest. And as the price of solar panels and wind turbines decreases, many more are being installed. The issue of hydrogen’s inefficiency appears to be solved by the excess of green energy.

Paul Martin, a chemical engineering consultant with an office in Toronto and a part of the Hydrogen Science Coalition, disagrees. Low capital cost is a requirement for a low-efficiency method to be successful, he said. Green hydrogen has a low efficiency and a high capital cost, which is an issue. The generated energy is quite expensive as a result.

Marsh claims that there is support for green hydrogen even in US states like West Virginia, Texas, and Louisiana. Marsh, who spent a lot of time in Washington last year arguing his point, claims that the hydrogen refineries Plug Power is constructing “look like oil and gas plants.” They transfer liquid fuel via trucks and trains, which require drivers and other support employees and use pipelines akin to those found in natural gas plants, which necessitate constant building and maintenance work. He claims that 20% of his company’s employees are from the oil and gas sector.

In the nascent green hydrogen market, Plug is up against a lot of competition from companies like Nikola, which is ramping up to manufacture green hydrogen to fuel its electric trucks, and Cummins, an engine behemoth that is also developing its own electrolyzer company. In an effort to lower the cost of this technology, General Motors, which has been researching hydrogen fuel cell technology since the 1990s, is joining up with Norway’s Nel, a major manufacturer of electrolyzers, to become a player in the green hydrogen market.

The historic Inflation Reduction Act, or IRA, is what is improving the situation for Marsh and Plug. The package gained notice when President Joe Biden signed it into law in August because of its hefty incentives for the development of American batteries, electric vehicles, and wind and solar energy to cut down on carbon pollution. The measure also contained a first-of-its-kind tax credit for green hydrogen. It offers manufacturers of this fuel a tax credit of up to US$3 (R$16) per kilogram. Because (Plug Power) began the process before the IRA was made public, Osborne claimed that the IRA “is the sauce on top.”

Marsh is not initially focusing on the transportation sector, in contrast to earlier attempts by the car industry to sell hydrogen-powered vehicles. Instead, he is searching for things that, in his words, “aren’t as spectacular,” yet are significant contributors to carbon pollution. Instead of being used for autos, almost all of this hydrogen will be used for stationary energy generation, forklift fuel, agriculture, and “green” steel. According to Marsh, the total carbon emissions from steelmaking and other industrial uses make up “approximately 26% of the global carbon emissions, compared to 26% for mobility.” In addition, Plug is collaborating with Renault on fuel cell delivery vans because he believes trucks are an excellent option for hydrogen, particularly as this decade comes to a conclusion.

Martin and Robert Howarth, both Cornell University professors of ecology and environmental biology, agree that green hydrogen has a place to play but that its best application is as a cleaner alternative to the polluting industrial hydrogen that is made from methane and used to make ammonia for agriculture.

“We make synthetic nitrogen fertilizers, which are responsible for keeping about 80% of Earth’s population alive today. It’s essential,” Howarth argues. “That would be a good usage if we can do it in a cleaner fashion, and green hydrogen is much better than gray or brown hydrogen for that purpose.”

Marsh is certain that the US, with its extensive and expanding renewable energy infrastructure and incentives supported by the IRA, is set to become the world’s green hydrogen superpower.
People all throughout the world find it worrisome that the US has such a clear competitive advantage, according to Marsh, citing recent remarks from a European hydrogen industry association. “Hydrogen Europe claims that it will be tough for the rest of the world to compete with the US because it has taken such a lead in producing green hydrogen and green ammonia.”

Green hydrogen is beginning to look like a viable alternative in light of the pressing need to transition industry, power generation, and transportation as soon as possible away from fossil fuels as the risk of catastrophic climate change increases. attractive. Martin, though, is not persuaded that Plug Power and its rivals are seeking the best answer to the issues with hydrogen efficiency. The devil, according to Martin, “is in the details, and in this case, he’s waving and prodding your sensitive areas every time you pass by with a pitchfork labeled “thermodynamic.”