Fuelling net zero: Green hydrogen needs to get in the fast lane

by Tracy Scott, Development Director, Green Hydrogen

Discovered in 1800, green hydrogen, produced by electrolysis, stands poised to revolutionise the world’s energy and industrial systems by 2050.

As we strive towards Net Zero by 2050, hydrogen emerges as a pivotal player, complementing that of renewable electricity. It will be a solution in decarbonising several of the ‘hard to abate’ challenges in our energy and industrial systems. Driven by robust standards, the roll-out of new hydrogen production capacity must adhere to stringent low-carbon standards while ensuring affordability for end-users. Green hydrogen can deliver on both carbon and cost. Accelerating its implementation now is key to reaping the rewards of reduced emissions and stimulating economic growth at scale.

Net zero as a catalyst for change

Cheap renewable electricity has given us the means to deliver decarbonisation of our energy systems. Furthermore, the success in driving renewables down the cost curve also gave us the belief to do more.

In 2019, the UK became the first major economy to set a target of net zero greenhouse gas emissions into law, and since then much of the world is following. As of March 2022, thirty-three countries and the European Union have set such a target, either in law or in a policy document.

Electricity alone will not get us to net zero. We need other technologies to decarbonise industry, heavy transport, and aspects of heating, while enabling the further deployment of wind and solar. Hydrogen, already a major industrial commodity and currently largely produced from fossil fuels, can play a large role.

Standardising net zero is a must

In a world counting externalities, not all hydrogen molecules are equal. A variety of hydrogen production paths are possible, with a wide range of carbon footprints and a rainbow of labels to describe them. These include: steam methane reformation (SMR), a process producing hydrogen with a high carbon footprint labelled ‘grey hydrogen’; SMR with carbon capture and storage (CCS), a process which can produce hydrogen with a lower carbon footprint than SMR labelled ‘blue hydrogen’; electrolysis of water using renewable electricity, either generated onsite or sourced through a grid power purchase agreement (PPA) labelled ‘green hydrogen’; or electrolysis of water using nuclear energy labelled ‘pink hydrogen’. Both ‘green’ and ‘pink’ can also be labelled zero carbon.

As we progress towards net zero, we expect end users to increasingly demand zero carbon hydrogen, with green hydrogen playing the dominant role as it has the lowest electricity cost, which is the key driver of the levelised cost of hydrogen.

In supporting the roll-out of technology, governments need to know their investments are actually putting them on the path to net zero, and end users need to be sure their supply chains are what they claim to be, which is why a robust system of standards is needed. In addition to simple standards that may be used to determine eligibility for government support mechanisms, we expect that end users will require a sophisticated standards/certification system giving assurance of the lowest carbon footprint, and of the production path. It is imperative that standards are underpinned by detailed work to accurately assess the total emissions of different production paths as major uncertainties still exist in these calculations.

Seizing opportunity means acting fast

The EU has set an annual production target of 10 million tonnes of renewable hydrogen by 2030 (equivalent to 40GW of electrolyser capacity) with a further 10 million tonnes to be imported. The US National Clean Hydrogen strategy similarly aspires to 10 million tonnes of production capacity by 2030, whilst in the UK the ‘low carbon’ hydrogen production capacity target was doubled to 10GW by 2030, with at least half of this being electrolytic hydrogen.

Such long-term targets are important, but near-term work by governments to help early projects reach investment decisions and enter construction is even more so. Achieving scale will set green hydrogen production technology down the path of cost reduction already seen for other modular renewable technologies.  Building confidence in forecasts of further green hydrogen roll-out, and hence forecast demand for renewable electricity, will have the added benefit of creating a pull-through for new wind and solar projects; all helping reach net zero.

Countries that create the conditions for early roll-out of green hydrogen projects will reap far more reward than the benefits of decarbonisation. These projects will also be part of a green-led economic recovery, creating skilled jobs distributed nationally in project development, technology manufacturing, construction, and operations. Many of these jobs will be in industrial heartlands near to end users of hydrogen. In addition, green hydrogen innovation will create opportunities for global export as deployment becomes more widespread.

Several countries see this opportunity clearly. Two of the leading hydrogen advocates, Germany and the UK, recently announced an agreement to work together to accelerate the role of low carbon hydrogen in their energy mix. This builds upon Germany’s domestic €9bn hydrogen strategy, with €2bn included to support international projects. Sweden has an interesting focus on green steel, with several projects in trials or development which will use green hydrogen in the steel production process. In the UK, the government is supporting new low-carbon hydrogen production with capital from the £240 million Net Zero Hydrogen Fund and revenue support from the Hydrogen Production Business Model. It is also consulting on blending hydrogen into the national gas distribution network.

At RES, we believe in a world where everyone has access to affordable zero carbon energy. Through our joint venture with Octopus Energy Generation, we are actively working to bring green hydrogen to market through a large pipeline of projects. We recently secured our first green hydrogen project from the Department for Energy Security and Net Zero.

It ends where it began

The discovery of electrolysis, originating from the Industrial Revolution, emerged as a crucial component in combating climate change – which is an issue borne from the same era. That narrative has a remarkable symmetry. Yet, the task ahead requires collective efforts from developers, investors, government, technology suppliers and end users. Taking this concept from a story to reality demands collaborative action to take it from the storybook to real life.

The urgency is clear: net zero goals require a rapid scaling of green hydrogen.

This article was first produced for and published by Hydrogen Central.