Green hydrogen, the star of the energy sector, faces two major problems”

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Green hydrogen, the ‘star’ of the energy sector, faces two major challenges. Author/Source: Sinochem New Network Date: 2020-09-14 Clicks: 3 Green hydrogen is becoming the ‘star’ in the field of energy! The most abundant chemical element in the universe can be used to produce and store energy, and it can be generated entirely from renewable sources, eliminating concerns regarding supply shortages. 　　The progress of green hydrogen faces two major challenges: a lack of funding, and insufficient **support. 　　Lack of funding and insufficient policy support: The production of green hydrogen from renewable sources is advancing rapidly, with 50 new projects announced since last year. However, a new report released recently by the Institute for Energy Economics and Financial Analysis (IEEFA) warns that severe shortages of funding, along with inadequate **support, will slow down the development of startups, thereby preventing the meeting of the global demand for green hydrogen. 　　The IEEFA estimates that over the past year, about 50 viable renewable hydrogen projects were announced worldwide, with these projects capable of producing only 3 million tons of green hydrogen per year. Yet, demand for green hydrogen is expected to reach 8.7 million tons per year by 2030, indicating an incredibly severe supply shortage. 　　The IEEFA states that a total of $75 billion is required for these projects. However, 34 out of the 50 projects are in the early stages, and successful deployment requires **strong support. Currently, only two projects are in operation (one in Japan and one in Brunei), with an annual hydrogen production capacity of less than 1,000 tons. 　　The report states, “Due to the ongoing poor economic conditions and a lack of financing, some of these projects may face serious risks of not being carried out.” It adds that for these projects to succeed, there is a need for a significant expansion in the manufacturing of electrolyzers, fuel cells, and related equipment such as hydrogen compressors, boilers, transmission systems, storage tanks, fuel filling equipment, and liquefaction plants. At the same time, the cost of transporting hydrogen by sea also needs to decrease. 　　High transportation costs. Large green hydrogen projects are being planned in Australia and the Middle East; these export-oriented plants require economies of scale. 　　The IEEFA believes that, thanks to its advantages in liquefied natural gas infrastructure, Australia’s hydrogen projects will opt for the liquefied hydrogen route. 　　According to Australia’s hydrogen roadmap, under the best circumstances, the production cost of a medium-scale hydrogen liquefaction plant can be reduced from $5 per kilogram to $1.8 per kilogram. 　　The report states: “This is a significant reduction, but it is still 51% higher than the industry average hydrogen production cost.” ” 　　Insufficient production: According to data from S&P Global Platts Analytics, assuming typical performance of proton exchange membrane (PEM) water electrolyzers, 1 terawatt-hour of electricity can produce approximately 20,000 tons of hydrogen. 　　The company said in a report in May 2020: “Lower costs of renewable energy present an opportunity for the production of low-cost hydrogen.” ” 　　However, the IEEFA report states that only the EU’s hydrogen plan focuses on the production of renewable (green) hydrogen. 　　China’s hydrogen energy is primarily based on conventional hydrogen extracted from fossil and coal-based raw materials. 　　South Korea’s hydrogen roadmap assumes that by 2030, most of the hydrogen supply will come from blue hydrogen (produced from carbon-containing fossil fuels), as liquefied green hydrogen is not cost-competitive. 　　Meanwhile, Japan’s hydrogen roadmap sets a moderate target of 300,000 tons per year by 2030, including blue and conventional hydrogen. 　　Electrolyzer bottlenecks The report also warns of potential bottlenecks in the supply of proton exchange membrane water electrolyzers, as large manufacturers are primarily focusing on alkaline electrolyzers. 　　The report states that \"proton exchange membrane electrolyzers are more suitable for small and medium-sized hydrogen production plants than alkaline electrolyzers, as they are smaller in size and can handle the variable power supply from renewable energy sources more effectively.\" ” 　　The report recommends that “countries **must establish policies to encourage private sector investment, along with emergency funding, as the industry must ‘learn by doing’**. ” 　　The World Energy Council’s report classifies hydrogen into three categories based on its source of production: “gray,” “blue,” and “green.” Gray hydrogen: Hydrogen derived from fossil fuels, produced through steam methane reforming (SMR) or gasification technologies. Blue hydrogen: Hydrogen produced via steam methane reforming technology or gasification combined with carbon capture and storage (CCS). Green hydrogen: Hydrogen produced by electrolyzing water using renewable energy.