London — The green hydrogen industry must strive to match the lobbying power of the blue hydrogen-extolling oil and gas industry, according to ITM Power CEO Graham Cooley.
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Speaking to S&P Global Platts from Sheffield, UK, where ITM is building the world's largest PEM electrolyser manufacturing plant, Cooley said green hydrogen (made by splitting water in an electrolyser using renewable power) was competing with blue hydrogen (the reforming of natural gas with carbon capture) in one key area: finance.
"The voice of blue hydrogen is far stronger today than the voice of green hydrogen," he said.
If blue hydrogen voices were the only ones heard by governments, "it will be blue hydrogen that goes down the cost reduction curve to the point where it will become a self-fulfilling prophecy," Cooley said.
That would be a retrograde step because, unlike green hydrogen, blue hydrogen could not claim to be net zero CO2, he said.
Carbon capture is not 100% effective and the oil and gas sector leaks greenhouse gas-intensive methane into the atmosphere.
"If we know blue hydrogen is not net zero, why use taxpayers' money to begin the cost down curve with the wrong technology?" Cooley said.
The blue hydrogen lobby has long since prepared answers to that question.
Proponents like Dutch gas network operator Gasunie say that only via blue hydrogen can scale be built in an emerging hydrogen economy.
"We anticipate that green hydrogen will play a substantial role in the energy transition while, in the short term, blue hydrogen can be used to help develop the hydrogen economy and make major strides towards reducing carbon emissions," Gasunie said.
Large-scale use of hydrogen required a reliable network, both for transport and storage, it said.
"We can take an enormous leap forward by using the gas infrastructure already in place," the company said.
"It is more than feasible to have the basis for the transport and storage of hydrogen to and from the major industrial areas in the Netherlands and onward to Hamburg and the Ruhr area ready as early as 2030."
Dispelling the cost myth
In many ways the two pathways to decarbonized hydrogen are complementary, Cooley acknowledged, with the rules required to convert gas grids and set standards applicable to both.
"But the myth [put about by the oil and gas sector] I want to dispel is that green hydrogen is too expensive, without looking at cost down curves, or respective volumes," Cooley said.
Given support, Cooley forecast that by 2025 green hydrogen costs will have fallen from around $12/kg (GBP10/kg in the UK) today to $3.2/kg.
That assumed a renewable power input cost of $50/MWh, a halving in electrolyser capital costs to $500/kW and a 50% load factor. (See below for McKinsey's table of cost projections done for the Hydrogen Council)
To get there, green hydrogen needed a feed-in tariff, supporting ITM's ambitious investment in a 1 GW/year electrolyser factory due to open at the end of the year.
Year one production would see capacity rise to 300 MW, before achieving 1 GW over the next three years.
"The UK does not have the world's largest battery factory, or heat pump factory, or turbine blade or solar panel factory. What it does have is the world's largest electrolyser factory," Cooley concluded.
COST OF RENEWABLE HYDROGEN WITH VARYING LCOE AND LOAD FACTORS, $/kg H2
LCOE - levelized cost of electricity