In recent months we have witnessed how governments are looking for a more sustainable way out of the crisis, taking advantage of large recovery funds to reduce emissions and energy dependence. Among these projects, the great dream of green hydrogen stands out—an energy vector produced with renewable energies that they hope will become competitive sooner than many predicted.
This is what emerges from the latest report published by the Wood Mackenzie consulting firm, which indicates how projects in markets such as the United States and Europe are preparing a large deployment of this technology with an estimate of exceeding 100 GW installed in the coming years.
The expansion will reduce the cost of the materials with which the hydrogen is produced, and thus the price per kilo of it will be reduced.
For the Norwegian company NEL, in 2025, it will be possible to produce green hydrogen for $1.50 per kilo. A figure that would reduce the current cost of just over 60% is estimated at 4 dollars per kg.
According to Ben Gallagher, an analyst at Wood Mackenzie and author of the report, ‘The European Commission’s hydrogen strategy didn’t exist a year ago. The German strategy did not exist a year ago, nor did the Netherlands, Spain, or Portugal. China did not have a net-zero goal by 2060. With President Joe Biden and Vice President Kamala Harris pledging aggressive action to decarbonize the world’s largest economy, the change in US leadership will also help.”
One of the main problems with this is that most of the projects are very recent. They have enough detail to allow them to aspire to access public funds. Still, very few have specific buyers that are ready to sign and put the money beyond those looking to directly exchange gray hydrogen for green, or projects promoting hydrogen expansion across sectors such as transportation, where there is still no minimum number of proposals or potential buyers willing to invest.
According to the report, hydrogen still has faraway applications such as air conditioning, transport, or aviation, so they estimate that 80% of the green hydrogen that has been deployed this decade will be used solely to replace hydrogen from fossil fuels.
The big question is whether the sectors that can be potential customers of hydrogen, and that until now had never used it, will do so in the medium or long term. Something that will determine the future of a technology that, as in renewables or batteries, will use public money to start, but that will have to reach maturity at some point to become a true alternative.