Hydrogen is becoming the next media star after solar and wind power. In their latest claim to fame, two spinoffs from the German technology conglomerate Siemens are Joining forces to promote green hydrogen technology, building wind systems for hydrogen to help decarbonize the global economy. Green hydrogen is presented as a solution to many problems of climate change: the element can be an energy carrier, it can be used to store energy and it can be used in fuel cells to power vehicles. Green hydrogen is a particularly attractive option because its production comes from hydrolysis of water using electricity produced by renewable systems, which means that it has a much smaller carbon footprint than hydrogen from gas or coal.
Siemens Gamesa and Siemens Energy have therefore joined a growing group of proponents of green hydrogen, many of whom see it as the ultimate solution to the planet’s pollution problem.
The two plan to invest $ 120 million over five years to develop a fully integrated offshore wind system for hydrogen that involves a turbine with an integrated electrolysis system, the companies said in a press release this week. They intend a large-scale demonstration of their pilot by 2025 or 2026.
“Our wind turbines play a huge role in decarbonizing the global energy system, and the wind’s potential in hydrogen means that we can do that in industries that are hard to beat as well. I am very proud that our people are part of building a greener future, ”said Siemens Gamesa Chief Executive Andreas Nauen in the statement. Related: Saudi Arabia starts new Middle East oil bull race
“With these developments, the potential of regions with abundant offshore wind energy will become accessible to the hydrogen economy. It is an excellent example of how we can store and transport wind energy, thereby reducing the carbon footprint of the economy, ”said Siemens Energy chief Christian Bruch.
But despite all its promises, green hydrogen production is not a problem-free technology. It is a very expensive technology that has caused some experts to warn that it is unlikely to be economically viable for years or perhaps decades to come. And yet, some are predicting big cost drops for the technology.
Wood Mackenzie analysts, for example, wrote last year in a report who expected green hydrogen production costs to fall by up to 64% by 2040 and, in some places, even earlier.
“On average, green hydrogen production costs will be equal to fossil fuel-based hydrogen until 2040. In some countries, like Germany, this arrives in 2030. Given the scale we’ve seen so far, it is likely that the 2020s be it the hydrogen decade, “wrote the report’s author, senior research analyst Ben Gallagher, adding:” Rising fossil fuel prices will boost green competitiveness, further strengthening the case for this technology in the coming years. ”
However, this cost reduction will require a very solid effort: at the moment, the production of green hydrogen costs between three and six times more than hydrogen derived from gas. On the other hand, the prices of hydrogen derived from gas may rise with increasing demand for gas, leveling the playing field somewhat. This, however, suggests that green hydrogen would depend on gas prices for its competitiveness, and not on technological advances that would make the process itself cheaper.
Of course, the energy transition will have a cost. The question is: how high will that cost be and how much will the world be able to afford it. Solutions like the one Siemens Gamesa and Siemens Energy are working on seem to be the way to make the process cheaper and bring green hydrogen closer to traditional reality. However, it is worth bearing in mind that these solutions would be region-specific, not universal. For now, conventional green hydrogen remains more of a promise than a reality.
By Irina Slav for Oilprice.com
More top readings from Oilprice.com: