At the end of February, French Economy Minister Bruno Lemaire revealed that 15 applications from French enterprises had been chosen and reported to the European Commission as part of the IPCEI (Important Project of Common European Interest) in hydrogen matter.
By the summer, the Commission will have examined about 100 initiatives with other European nations in order to determine which ones would get public funding. Philippe Boucly, president of France Hydrogène (the French sector’s federation), sees this as a “dynamic of European acceleration” and is pleased that “the 15 French projects selected […] will allow for the redeployment of industrial capacities with three types of priority projects: developing a competitive electrolysis sector, accelerating hydrogen mobility, and decarbonizing our industry”
Has hydrogen reached its pinnacle? Attempts to bring forth this energy vector had already been made in the 1970s, 1990s, and 2000s, but each time with no substantial change in size. The current decarbonization issue appears to be the start of a new cycle. Nicolas Hulot, then Minister for Ecological and Solidarity Transition, has announced a 100 million euro Hydrogen proposal as early as 2018. Premonitory? The European Union publishes its Hydrogen Strategy in 2020, while Germany and France compete with financial announcements: the first provides 7 billion euros for carbon-free hydrogen development and 2 billion euros for international industrial partnerships; the second also dedicates a €7.2 billion envelope to the hydrogen sector, which will be supplemented by €1.9 billion in 2021 as part of France 2030. The appeal of hydrogen is equally as powerful in many countries, as the French Energy Council recently demonstrated.
Make a market that will last a long time
Projects to decarbonize hydrogen are quickly blooming as money flows, and conversations are burning to identify THE answer to the energy revolution. However, for the time being, hydrogen is still heavily reliant on fossil fuels, emitting roughly 900 million tonnes of CO2 every year. According to the Agency Energy International, fewer than 10% of the 90 Mt of hydrogen generated worldwide is exposed to CO2 capture, and less than 0.5 Mt is produced through water electrolysis (2020 data).
However, investor backing is kicking off a new dynamic: will it be enough to truly usher in a viable “green” hydrogen economy? The European Commission is working on this by gradually incorporating hydrogen into its regulations, particularly those governing gas, in order to encourage the use of existing network infrastructures, certify low-carbon hydrogen, and create market conditions while temporarily accepting public support. It also increases the number of points of support for the development of a business ecosystem, such as the Alliance for Clean Hydrogen.
Even though it may be based in part on the current market for fossil-fuel-derived gas and hydrogen, creating an ad hoc market for “green” hydrogen is a difficulty in and of itself. However, in order to avoid becoming a niche industry, and even larger barrier must be overcome: achieving the expected hydrogen production levels for the energy transition. There will be new uses, in addition to the existing demands that worry the industry (mobility, power to gas, Organic chemistry). The primary task will thus be to mass-produce and deploy electrolyzers during the next 20 years, as well as to provide them with carbon-free power at a reasonable cost. On a national scale, the work of RTE, Ademe, and négaWatt demonstrate the enormity of the task: beginning from nearly zero, we should be able to create “green” hydrogen Between between 60 and 135 TWh by 2050, depending on the scenario. This would be the equivalent of building 10 to 20 MW of electrolyzers in each canton, to give you an idea of scale. Today, projects like Jupiter 1000 in Fos-sur-Mer, which have been announced or are in the works, are on the order of one megawatt.
Hydrogen, which has been extolled for three years, will undoubtedly be a key component of the energy revolution, but it will not be the sole solution. With strong government assistance, the industry must take on a big industrial challenge and develop an economic model that will secure its long-term viability.
