Despite ambitious targets, less than a tenth of planned green hydrogen projects were implemented in 2023.
High production costs, lack of offtake agreements, and insufficient policy support are hindering green hydrogen's progress.
The study found that significant subsidies would be needed to realize current green hydrogen projects.
Over the past decade, countries and private enterprises around the world have made ambitious goals and pledges to expand the production and use of green hydrogen in their operations. These targets come as a part of broader clean energy transition efforts, as green hydrogen could be a critical component of any feasible pathway to meeting global climate goals. Since hydrogen can be combusted at high heats like fossil fuels, it can help to decarbonize hard-to-abate industries like steel making and shipping.
When hydrogen is burned, instead of emitting carbon dioxide and other greenhouse gasses, it leaves behind nothing but water vapor. This makes it an enormously useful fuel source for a wide range of industrial applications, with potentially massive implications for global greenhouse gas emissions. “Replacing the fossil fuels now used in furnaces that reach 1,500 degrees Celsius (2,732 degrees Fahrenheit) with hydrogen gas could make a big dent in the 20% of global carbon dioxide emissions that now come from industry,” Bloomberg Green wrote in a 2021 report titled “Why Hydrogen Is the Hottest Thing in Green Energy.”
But so far, despite the industry’s lofty promises, the global green hydrogen hype has not materialized into tangible results.
A new study reveals that in 2023, less than a tenth of planned green hydrogen was actually carried out. “Tracking 190 projects over 3 years, we identify a wide 2023 implementation gap with only 7% of global capacity announcements finished on schedule,” reads the abstract of the paper, “The green hydrogen ambition and implementation gap”, published this month in the scientific journal Nature Energy.
The study finds that on the whole, the world is getting closer to actually committing to a pathway to capping global warming to 1.5 °C over pre-industrial average temperatures, but while the ‘ambition gap’ is shrinking, implementation has to follow suit. And so far, that’s not happening.
The paper authors identify three primary reasons for the green hydrogen implementation gap. First is that green hydrogen is expensive to produce, and costs are on the rise. Second is a lack of offtake agreements, possibly due to industry anxieties about “the risk of becoming locked into an expensive and potentially scarce energy carrier.” Third, robust policy measures are needed to de-risk investment in green hydrogen.
A major finding of the study was that green hydrogen ambitions have failed in large part because they are not sufficiently funded or subsidized. “We estimate that, without carbon pricing, realizing all these projects would require global subsidies of US$1.3 trillion (US$0.8–2.6 trillion range), far exceeding announced subsidies,” the paper states. “Given past and future implementation gaps, policymakers must prepare for prolonged green hydrogen scarcity.”
Green hydrogen, by definition, must be produced using emissions-free energy like wind or solar power. Gray hydrogen, which is cheaper and much more abundant in industrial applications, is created using fossil fuels. Some also distinguish hydrogen produced with natural gas, calling it blue hydrogen, as a supposedly less emissions-intensive stepping stone between gray and green hydrogen.
Not only is green hydrogen by far the most expensive form of hydrogen, it also might not even be that great for decarbonization in the big picture. According to some experts, diverting renewable energy to create green hydrogen may not be the best or most efficient use of these resources. In fact, diverting too much green energy toward hydrogen production could actually slow down the decarbonization movement as a whole. A 2022 report by the International Renewable Energy Agency (IRENA) warned against the “indiscriminate use of hydrogen.” Policy-makers should instead weigh their priorities carefully and consider that extensive use of green hydrogen “may not be in line with the requirements of a decarbonised world.”
By Haley Zaremba for Oilprice.com
Equilibrion to lead UK study on nuclear-enabled hydrogen
Technical and strategic nuclear consultancy Equilibrion announced it is to lead a study to explore how deployment of nuclear-enabled hydrogen production could support the repurposing of the UK's existing extensive gas network for low-carbon hydrogen.
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The company has been appointed by Northern Gas Networks (NGN) - the gas distributor for the north of England - and Wales & West Utilities (WWU) - a supplier of gas emergency and pipeline services across the south west of England and Wales - to lead the SHyNE study, which is supported by the Energy Innovation Centre.
Nuclear-enabled hydrogen is recognised by the UK's Low-Carbon Hydrogen Standard and uses the heat and electricity from nuclear reactors to generate hydrogen. Previous studies show that nuclear-enabled hydrogen can reduce costs for consumers, as well as providing resilience in production.
The SHyNE project will develop a deployment roadmap for capacity introduction to meet user demand, looking at estimated production rates, a geographical analysis that considers potential nuclear new-build sites in the context of existing infrastructure, customer demand centres and a techno-economic analysis.
SHyNE will build on advancements in nuclear technology - particularly with small modular reactors and advanced modular reactors - by assessing how improved siting flexibility and financing methods for reactors can accelerate nuclear deployment to support an energy transition and reduce costs for consumers.
The project will also assess how a nuclear power plant, twinned with electrolytic hydrogen production, can provide flexible electricity output to help balance the grid.
"Adopting nuclear-enabled hydrogen complements the UK Government's plans, with Labour expressing its intent to deliver nuclear electricity production and being set to publish its new nuclear siting policy offering more opportunities for nuclear sites across the UK from 2025 onwards," Equilibrion said.
"Nuclear-enabled hydrogen represents a powerful, yet largely untapped, opportunity to drive the UK's journey to net-zero at a significant scale and, for the first time, both the nuclear and hydrogen sectors can fully appreciate how working together can be a game-changer to the availability of low-cost electrolytic hydrogen and expand opportunities for organisations in both sectors," said Equilibrion Chief Technologist Allan Simpson. "We are committed to enhancing the opportunities for collaboration between the hydrogen and nuclear sectors for mutual benefit and are delighted to be appointed by Northern Gas Networks and Wales & West Utilities to advance the role of nuclear energy in delivering scalable, low-carbon hydrogen through the existing gas infrastructure."
Matthew Hindle, head of net-zero and sustainability at WWU, added: "We're excited to work with Equilibrion and NGN to better understand how nuclear-enabled hydrogen can support gas customers through the energy transition, by providing reliable, scalable low-carbon hydrogen for supply into the UK gas networks. SHyNE can support the reuse and adaptation of existing infrastructure to reduce costs, while accelerating the energy transition and enhancing energy security."
"Hydrogen can be a key enabler of accelerated decarbonisation for industry, transport and heat, and as an energy network it's critical we understand all the angles for hydrogen production and what's required to ready our infrastructure," said NGN Innovation Manager Lewis Kirkwood. "Network Innovation Allowance projects such as this are essential to unlocking the potential for hydrogen investment, to support the UK's decarbonisation strategy and diversify its energy portfolio, reduce reliance on fossil fuels and shore up energy security."
The UK government's Energy White Paper, published in 2020, identified hydrogen as a potential source of decarbonised heat in buildings and, whilst there has been significant progress in recent years to accelerate the shift to green gases, including existing use of biomethane, the transition of a natural gas distribution network to one transporting green gases is recognised as a complex challenge.
In July 2023, WWU announced it was partnering with National Gas and NGN to develop the gas control room of the future, assessing the impact of distributing a wider range of gases, including hydrogen, through the existing network infrastructure to help meet the UK's future of energy plans to decarbonise heat in buildings.
Norwegian-Korean cooperation
Meanwhile, Norway's Nel Hydrogen has announced the signing of a memorandum of understanding with Korea Hydro & Nuclear Power (KHNP) to collaborate on clean hydrogen production technology.
"This partnership combines Nel's expertise in alkaline electrolysis with KHNP's experience in nuclear power," Nel said in a LinkedIn post. "KHNP is South Korea's largest power generation company, specialising in nuclear and hydroelectric energy to support the country's electricity needs and carbon neutrality goals."
The partners, Nel said, "intend to expand into global clean hydrogen markets".
Nel noted KHNP has been researching nuclear-produced clean hydrogen since 2022. It is currently undertaking a demonstration project and has been conducting the world's largest nuclear clean hydrogen production demonstration project as a national R&D project since April last year.
In October 2024, US firm FuelCell Energy signed a memorandum of understanding with KHNP on jointly investigating hydrogen energy projects in South Korea using FuelCell's solid oxide electrolysis hydrogen technology.
Most hydrogen today is made by steam reforming of natural gas or coal gasification, both with carbon dioxide emissions. Future demand will be mainly for zero-carbon hydrogen. Plans for increased hydrogen production are essentially based on electrolysis using electricity from intermittent renewable sources. Off-peak capacity from conventional nuclear reactors or other power plants can also be used. In future, a major possibility for zero-carbon hydrogen production is decomposition of water by direct use of heat from nuclear energy, using a thermochemical process enabled by high-temperature reactors.
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