Hydrogen could comprise up to 15% of the global energy mix over the next three decades, but it is expected to serve more of a complementary role in meeting climate goals, panelists said in an April 26 webinar.
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Register Now"Of course, it's not a silver bullet -- it's one part of what we need to decarbonize," said David Bryson, Uniper's chief operating officer.
Questions around hydrogen's efficiency, cost of production, and scale are still at the forefront of the debate around hydrogen but should not be limiting factors preventing the market from getting off the ground, Bryson said at the Financial Times' Hydrogen Summit.
"There are inefficiencies, but those are removed over time and improved," Bryson said. "They should not allow us to stop from moving forward."
Hydrogen's skeptics mirror those who similarly were doubtful about the ability to scale up and bring down the cost of renewables, Bryson said. Massive funding and learning were needed over the last decade to kickstart initiatives and move the market forward, he said.
In Germany by 2030, roughly 76-80 TWh of hydrogen would need to be imported to fill the total demand of 90-100 TWh. Supply could come from the Middle East and Asia, as well as Portugal and the Nordic Basin to close the gap, he said.
Off-takers are already inquiring about hydrogen supply in both the Atlantic and Pacific basins, Bryson added.
EU investment
As market participants debate whether to dive into hydrogen, many are waiting for frameworks to fall into place.
The hype around hydrogen is particularly strong in the EU, where the European Commission and several member states have announced hydrogen strategies.
"Because electrification will be the most efficient energy source, hydrogen will be used where electrification is too costly or difficult," said Kadri Simson, Commissioner for Energy at the EC.
The EC is working on a taxonomy of standards that would define hydrogen by production pathway. No final word has been given on the role of natural gas as part of the EC's future funding of hydrogen projects.
The EC favors hydrogen produced from renewables, referred to as green hydrogen, over fossil-based hydrogen with carbon capture and sequestration, or blue hydrogen. But blue hydrogen would be necessary to decarbonize hard-to-abate sectors, such as cement and steel, Simson said.
Countries such as the Netherlands and Norway are exploring different aspects of carbon capture, such as producing synthetic fuels and removing emissions from the atmosphere to create negative emissions, she said.
"Talking about EU priorities, the clear focus is renewable hydrogen, but at the moment, we recognize there will be a role for blue hydrogen until renewables scale up," Simson said.
Green vs. blue
The industry continues to debate whether blue hydrogen should serve as a bridge, as cost differences remain stark between electrolytic and methane-based hydrogen.
While blue hydrogen costs are nearly at par with hydrogen produced without CCS, green hydrogen costs are expected to come down over the next decade, said Agustin Delgado, chief innovation and sustainability officer for Iberdrola.
Costs are expected to go down on the production side to as low as Eur2/kg by 2030, which would put green hydrogen nearly on par with conventionally produced hydrogen from fossil fuels, even without carbon capture, he said.
"We have the opportunity to drive the cost down to gray hydrogen, but we need support," Delgado said.
Although some oppose the use of fossil-based fuels to produce hydrogen, low carbon hydrogen is being seen for its potential to lower carbon emissions in the near term as green hydrogen costs come down.
S&P Global Platts assessed the cost of Netherlands methane-based hydrogen with carbon capture including capital and carbon costs at Eur1.8744/kg April 23. By comparison, Netherlands hydrogen produced at a theoretical PEM electrolysis plant would cost Eur4.4573/kg to produce, according to Platts data.