What Does the Future Hold for Green Hydrogen Deployment?
Green hydrogen has emerged as a promising solution to the challenge of decarbonizing various industrial sectors. While hydrogen can be produced from natural gas (grey hydrogen), it is not a sustainable solution. However, hydrogen produced through electrolysis, using renewable energy sources like solar and wind power (green hydrogen), offers a more sustainable option.
In a recent interview with pv magazine, George Touloupas—PV Solar, Energy Storage and Green Hydrogen expert at Clean Energy Associates—shared his insights on the current state of green hydrogen technology and its future prospects. Here are some of the key takeaways from his discussion:
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How long will it take for green hydrogen to become competitive with grey hydrogen or become commercially viable?
According to Touloupas, the market for hydrogen is almost a hundred million tons, which is almost all dirty, grey or brown. The low hanging fruit is converting all this dirty hydrogen into green. However, doing that on a global scale is very challenging for many reasons, including the limited existing capacity of electrolyzer manufacturers, and local schemes and incentives globally. The US has a large incentive, the Inflation Reduction Act (IRA), that creates a very strong dynamic. Europe will need to catch up with some sort of incentive to compete with the US, and it seems it’s moving towards this direction.
How much should the cost of solar electricity drop in order to make green hydrogen more competitive?
Touloupas explained that the levelized cost of hydrogen (LCOH), which is a rather complex calculation, has three main factors. One of them is the levelized cost of electricity (LCOE). When green hydrogen is produced, clean electricity is required, which is chiefly solar and wind - and these sources are variable. The second factor is the utilization rate (which depends on the capacity factor), and the third is equipment CapEx. Touloupas believes that a good range of LCOE to achieve low LCOH would be two to three cents per kWh.
Which are the most suitable locations for green hydrogen?
The most suitable locations for green hydrogen are those where renewable energy can be available with a good capacity factor and at low cost. Offshore wind, for example, has a very high capacity factor and is a good candidate for green hydrogen.
What kind of green hydrogen prices can we expect for the next five years?
The general consensus is that we need something in the range of two to three dollars per kilogram to make green hydrogen commercially viable.
Should the industry focus more on further reducing solar power costs, or rather reducing costs of electrolyzers?
Touloupas believes that solar power is already very inexpensive, and the industry should focus on reducing the costs of electrolyzers while increasing their efficiency. However, scaling up the production of electrolyzers is a challenge, especially for technologies like PEM, which is more expensive due to the need for rare, expensive metals.
In conclusion, green hydrogen is a promising solution for decarbonizing various industries, but there are still challenges that need to be addressed to make it commercially viable. While there is no clear timeline for when green hydrogen will become competitive with grey hydrogen, it is expected to happen in the next few years if everything falls in place. The industry should focus on reducing the costs of electrolyzers while increasing their efficiency, and the most suitable locations for green hydrogen are where renewable clean energy is available with a high capacity factor and at low cost.
