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Green Hydrogen Is Gaining Traction Across The Globe


Editor OilPrice.com
Thu, August 18, 2022 

Green hydrogen operations are expanding even further as governments pump millions into the development of the sector. While the rise of green hydrogen production across Europe has been well documented, some European countries are investing even more heavily in the industry, as other projects are popping up in more unexpected regions, such as Latin America and Africa. With several governments and major energy companies backing green hydrogen development, it is likely to become a major renewable energy source worldwide.

Green hydrogen has been hailed as a major new clean energy source with the potential to replace natural gas, as well as being used in hydrogen vehicles – in competition with electric car batteries. Although the cost of green hydrogen production is much higher than alternative renewable energies, experts expect greater investment in research and development, as well as the expansion of hydrogen plants, will make the technology much cheaper and more efficient over time, much in the same way as seen in the solar and wind power sectors.

Green hydrogen is produced using renewable electricity to power an electrolyzer and than splits water into hydrogen and oxygen. The gas is then burned to produce power and emits only water vapor and warm air, making it carbon-free. This contrasts with grey hydrogen production, which is powered by natural gas.

Europe and the Middle East have already significantly expanded their green hydrogen market positions following major investments in the industry. The two regions are battling for the top spot as global demand for the renewable energy source increases. In Europe, we’re seeing even more investment in the sector than initially expected, with Spain announcing a €50 million green hydrogen plant in Puertollano and the U.K. promoting a £150 million plant at the port of Felixstowe.

This month, ScottishPower announced plans to construct a major green hydrogen facility in Felixstowe, in the south of England, to power trains, trucks and ships. The plant is expected to produce 100 MW of energy, to power approximately 1,300 hydrogen trucks starting in 2026. The project comes as petrol and diesel prices in the U.K. are soaring, leading to an increase in demand for alternatives. The company expects to receive financial support from the U.K.’s Net Zero Hydrogen Fund for the project, which could cost anywhere between $122 million and $183 million.

But now projects are cropping up in more unexpected places. Countries across both Africa and Latin America have announced investments in green hydrogen this year, as emerging powers work to achieve their position in the global hydrogen market. With the global hydrogen market expected to achieve $1 trillion a year by 2050, everyone wants a piece of the action.

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One unexpected place that is developing its green hydrogen capabilities is Brazil. This week, The National Institute of Clean Energies (INEL) in Brazil announced it was establishing a new green hydrogen secretariat(SHV). Head of the SHV Luiz Piauhylino Filho hopes to support Brazil’s low-cost, clean energy sector through the development of the country’s green hydrogen operations.

Earlier this year, the Brazilian chemical company Unigel commenced construction of the country’s first green hydrogen plant in Bahia, in north-eastern Brazil, at a cost of $120 million. It is expected to be the world's largest integrated green hydrogen and ammonia plant upon completion. Unigel hopes to achieve an output of 10,000 tonnes a year of green hydrogen and 60,000 tonnes a year of green ammonia with operations starting in 2023.

Another South American giant looking to break into the renewable hydrogen market is Chile. The country is already well-known for its green energy production, making it well-suited to green hydrogen production. The government has already announced a goal of 5 GW of installed electrolysis capacity by 2025 and aims to produce the most cost-efficient green hydrogen by the end of the decade. As demand for green hydrogen begins to increase in Europe and Asia, it is encouraging several Latin American countries to start developing their hydrogen capabilities to get ahead of the competition in the region as the industry grows.

As well as Latin America, interest in the green hydrogen industry is also rising across the African region. Last year, the Namibian government announced an aim to export three million tonnes a year of green hydrogen to Europe with investment coming from its post-pandemic economic recovery scheme. Namibia is hoping to produce some of the world’s cheapest green hydrogen at $1.55 to $2.07 per kilogramme.

However, Namibia’s green hydrogen industry is still in its nascent stage, with limited electricity access for much of the country’s population. But the significant potential to develop Namibia’s wind and solar resources, coupled with large areas of uninhabited, state-owned land, make the country highly attractive for the development of a major renewable energy sector, which will likely include green hydrogen.

As green energy operations continue to expand across regions with existing production capabilities, we are seeing more new developments appear in unexpected parts of the world. Several Latin American and African countries have shown their interest in the development of their green hydrogen industries as demand for the renewable energy source continues to expand across Europe and Asia.

By Felicity Bradstock for Oilprice.com