Reuters Events: Cost cuts for green hydrogen key to wider adoption
24/06/2021 14:47
By Devika Krishna Kumar and Timothy Gardner
NEW YORK, June 24 (Reuters) - Reducing the cost of producing
clean hydrogen, through large investments and government
subsidies, will be key in the wider adoption of the fuel in
coming years, panelists said during the Reuters Events: Global
Energy Transition conference.
So-called green hydrogen, made by using renewable energy to
power electrolysers to convert water, is being backed by many
governments for vehicles and energy plants but it is currently
too expensive for widespread use.
Today, the price of green hydrogen is about four times that
of grey hydrogen, made by extracting hydrogen from fossil fuels
such as coal or natural gas while releasing carbon monoxide and
carbon dioxide, said Marcelino Oreja, chief executive officer at
Enagas SA ENAG.MC .
This month the Biden administration set a goal of reducing
the cost of producing clean hydrogen 80% to $1 per kilogram in a
decade. urn:newsml:reuters.com:*:nL2N2NP1LG
"We need real projects to happen to drop prices down ... I
think we're going to see big projects producing big quantities
of hydrogen in 2025 and beyond," Oreja said.
Enagas, along with Spanish oil and gas company Repsol
REP.MC are developing technology to produce renewable hydrogen
using solar energy.
Results from the project are expected by 2024 or 2025 and it
will be commercial after that, Oreja said.
The current industrial business for hydrogen is valued at
about $200 billion and there is more than double that amount of
new projects that have been announced recently, Hydrogen
Council's Executive Director Daryl Wilson said.
"We're seeing huge momentum ... the industry will more than
triple in short order as the rate of new projects accelerate,"
Wilson said.
Industries where electrification is not easily possible
including long haul transportation - such as marine and aviation
industries - are likely to be early adopters of hydrogen,
panelists said.
Air Products and Chemicals Inc APD.N is building a $7.5
billion green hydrogen-based ammonia production facility in
Saudi Arabia with partners ACWA Power APBS.OM from Oman and
the kingdom's megacity of the future NEOM.
Seifi Ghasemi, chairman and CEO of Air Products, said
northern Saudi Arabia was perfect for the project because it has
lots of sunshine during the day, wind during the night and
access to ports which can ship the ammonia, for use as fuel in
heavy transportation and heavy industry, to global markets.
"I know there's a lot of projects being announced, but it
takes a lot of time and effort to put all of this together,"
Ghasemi said.
Hydrogen will play a pivotal role in the energy transition
as it can bring together the electrical, liquids and gas
systems, panelists said.
"Like the human body, where there is a deep integration of a
molecular system and an electrical system ... we need them
working together in harmony and hydrogen gives us that
opportunity," Wilson said.
(Reporting by Devika Krishna Kumar in New York and Timothy
Gardner in Washington DC
Editing by Marguerita Choy)
((devika.kumar@thomsonreuters.com; +1 646 223 6059; Reuters
Messaging: devika.kumar.thomsonreuters.com@reuters.net))