Hydrogen Production Is Set to Increase 5000% in Just 5 Years

by Alex Kimani (OilPrice.com) After decades of stagnation and multiple false dawns, the hydrogen economy appears primed for a major takeoff. A growing number of countries and industries are proactively investing in hydrogen technologies, with hydrogen being touted as the ‘fuel of the future.’ Meanwhile, industry experts are predicting that hydrogen could become a globally traded energy source, just like oil and gas, while the Bank of America says the industry is at a tipping point and set to explode into a $11 trillion marketplace. For a sector that has been vilified for so long, those bullish projections can appear like a bad case of blue-sky thinking. Yet, they are beginning to take shape right as we watch.

A few months back, the European Union set out its new hydrogen strategy as part of its goal to achieve carbon neutrality for all its industries by 2050 that will see the regional bloc develop a minimum of 40 gigawatts of electrolyzers within its borders and a similar amount of green hydrogen capacity in neighboring countries that can export to the EU by the same date.

The world’s green hydrogen leaders have joined hands with an ambitious goal to drive a 50-fold scale-up in green hydrogen production over the next six years.

The Green Hydrogen Catapult Initiative is a brainchild of founding partners Saudi clean energy group ACWA Power, Australian project developer CWP Renewables, European energy giants Iberdrola and Ørsted, Chinese wind turbine manufacturer Envision, Italian gas group Snam, and Yara, a Norwegian fertilizer producer.

The companies hope to drive 25GW of green hydrogen production by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg thus making the fuel source competitive with fossil fuels in power generation. Green hydrogen is produced using renewables as an energy source in the electrolysis of water.

In fact, a recent analysis by the Hydrogen Council suggests that $2/kg as the tipping point required to make green hydrogen and its derivative fuels competitive in power generation, steel and fertilizer production, and long-range shipping. Green ammonia, which is made from green hydrogen, and being tested in the marine industry and also as a possible replacement for fossil fuels in thermal power generation. Compared to its grey brethren, green ammonia produces zero carbon when burned, boasts an energy density 80% higher than hydrogen, and is much safer than hydrogen.

The icing on the cake: the consortium of green hydrogen producers says we can expect to see $2/kg hydrogen in just four years’ time. READ MORE