Hydrogen is an important energy carrier that will play a vital role in decarbonisation in the future. Despite being the most abundant element in the universe, there is very little free hydrogen present in our atmosphere.
If we intend to utilise hydrogen as a major energy source in the future, we will need to produce it in large quantities. Hydrogen produced on Earth is typically classified as either blue hydrogen, green hydrogen or grey hydrogen. Let’s take a look at each of these and discuss their significance relating to decarbonisation in the future.
What are the different types of hydrogen?
The vast majority of hydrogenis made from fossil fuels such as natural gas via Steam Methan Reforming, where by high pressure steam reacts with natural gas, resulting in “grey” hydrogen. This production method generates significant carbon emissions. With net zero emissions the target for many countries, there has been an active steer towards cleaner production methods.
When the CO2 released during the process of grey hydrogen is captured and stored through CCS or when hydrogen is produced through sustainable energy through electrolysis for example, these are blue hydrogen and green hydrogen.
Green hydrogen – Green hydrogen can be produced from sustainable energy e with zero emissions. The electricity generated is used to drive the electrolysis process that splits water into hydrogen.This form of hydrogen generates no emissions during its production. The only carbon footprint associated with green hydrogen are the emissions generated when setting up the renewable energy source.
Blue hydrogen – Blue hydrogen is similar to grey hydrogen in that it is produced from natural gas. However, this form of hydrogen production uses carbon capture to reduce the carbon dioxide being released into the atmosphere.
What type of hydrogen will we be using in the future?
In an ideal decarbonised future, countries will be utilising only green hydrogen due to its clean production method. However, there are many challenges that are preventing this from occurring in the near future.
The biggest problem with green hydrogen at present is its high production cost. Although there are commercials-scale technologies, creating hydrogen through electrolysis can become more efficient. In addition to this, the electrolysers used in the electrolysis process are quite expensive, however certain companies, such as ITM Power, are committed to advancing the technology to bring about economies of scale, reducing the price of green hydrogen and making it cost-competitive with blue hydrogen by the end of the decade.
Many are hoping that the costs associated with green hydrogen come down in the future, similar to how the cost of renewable energy sources such as solar and wind fell over the decades.
Using blue hydrogen comes with many challenges as well. The current price of producing blue hydrogen is primarily affected by natural gas prices. However, the biggest challenge associated with this production method is the cost of capturing and reusing (or storing) the carbon emissions produced.
Blue hydrogen currently costs more to produce than grey hydrogen. This cost difference should decrease in the future as the carbon taxes increases. It is also believed that the cost of producing blue hydrogen will come down as production is scaled up.
Which type of hydrogen will take over?
Many experts believe we can utilize blue hydrogen until green hydrogen becomes more feasible. The current cost of producing green hydrogen in 2020 is $6.00/kg. This cost is expected to fall to $2.50/kg by 2030.
On the other hand, the current cost of producing blue hydrogen in 2020 is $2.10/kg. This cost is expected to fall to $1.80/kg in 2030.
If a decarbonised future really is the goal, then we will need to shift towards using green hydrogen exclusively and reduce our reliance on natural-gas supply.
Green hydrogen initiatives
Despite the current challenges associated with green hydrogen, many countries are investing in this technology. The European Commission (EC) unveiled an initiative to promote the production of green hydrogen in the European Union over the next 5 – 10 years. This includes billions of pounds to be spent on increasing solar and wind energy capacity to drive green hydrogen production.
The EC also aims to install 4 GW of electrolyzer capacity in the EU by 2024. This is more than four times the current electrolyzer capacity in the continent. With investments such as these, widespread production and use of green hydrogen is set to become a reality in the future.
Blue hydrogen initiatives
Blue hydrogen is also gaining traction in Europe. The Norwegian state-owned energy company Equinor recently announced that it would be building a blue hydrogen production facility in the UK. This project aims to create hydrogen from natural gas and also use carbon capture. There are also plans to utilise and/or store the carbon captured during production.
Projects such as this can only be undertaken with the right combination of government policy, public investment, and private investment. The UK government recently pledged £ 800 hundred million towards carbon capture storage development. This creates many hydrogen investment opportunities that could pay off in the future.
Green hydrogen and blue hydrogen will play major roles in decarbonization in the future. There are many groups who are currently investing in blue hydrogen and green hydrogen in Europe. These blue hydrogen and green hydrogen initiatives can help the EU reach its goal of becoming climate-neutral by 2050. Blue hydrogen produced from natural gas will use carbon capture to reduce its emissions and overtake grey hydrogen production – it has a recognised role in the overall strategy to transition to net zero, whereas green hydrogen is beginning to make significant progress in being a major contributor to the net zero target and become an integral part of sustainable energy.
Pangea Strategic Intelligence ’s on-demand energy consulting platform facilitates engagements with market-embedded Experts so Clients make better business decisions, faster.