Hydrogen turns into the next medium star after the sun and wind. In its most recent claim of fame, two spin-offs from German technology conglomerate Siemens join to advance green hydrogen technology by building wind-to-hydrogen systems to help decarbonize the global economy. Green hydrogen is touted as the solution to many climate change problems: it 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 very attractive option because its production comes from hydrolysis of water using electricity generated by renewable systems, meaning it has a much lower carbon footprint than hydrogen sourced from gas or coal.
Therefore, Siemens Gamesa and Siemens Energy have joined the growing group of green hydrogen supporters, 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-to-hydrogen system involving a turbine with an electrolysis system integrated into it, the company said in a press release this week. They are targeting a full-scale demonstration of their pilots by 2025 or 2026.
“Our wind turbines play a big role in the decarbonization of the global energy system, and the potential for wind to become hydrogen means we can also do this for industries that are hard to stop. It makes me very proud that our people are part of shaping a greener future, ”said Siemens Gamesa chief executive Andreas Nauen in a release. Related: Saudi Arabia Begins New Bull Run In Middle East Oil
“With this development, the potential for areas with abundant offshore winds will be accessible to the hydrogen economy. This is a prime example of enabling us to store and transport wind energy, thereby reducing the economic carbon footprint, ”said Siemens Energy chief Christian Bruch.
But for all its promises, green hydrogen production is not a problem-free technology. This is a very expensive technology that some experts warn it may not be economically viable for years and possibly decades to come. However, some expect a large reduction in costs for the technology.
Wood Mackenzie analysts, for example, wrote last year at a report that they estimate the costs of producing green hydrogen to fall by as much as 64 percent by 2040 and in some places, even faster.
“On average, the costs of producing green hydrogen will be the same as fossil fuel-based hydrogen by 2040. In some countries, such as Germany, which is arriving in 2030. Given the increases we have seen so far, the 2020s will likely be decades of hydrogen, “the report’s author, senior research analyst Ben Gallagher wrote, added,” Rising fossil fuel prices will increase environmental competitiveness, further reinforcing the rationale for this technology in the years to come. ”
However, reducing these costs will require a fairly solid effort: currently, the cost of producing green hydrogen is between three and six times more than gas-derived hydrogen. On the other hand, the price of gas-derived hydrogen may increase as the demand for gas increases, leveling the playing field somewhat. This, however, suggests that green hydrogen will depend on the price of the gas for its competitiveness rather than on technological advances that will make the process itself cheaper.
It is clear that the energy transition will come at a cost. The question is, how high will it cost, and how much the world can afford. Solutions such as Siemens Gamesa and Siemens Energy are working on sound like how to make the process cheaper and bring green hydrogen closer to a mainstream reality. However, keep in mind that this solution will be region specific, not universal. For now, mainstream green hydrogen remains more promising than reality.
By Irina Slav for Oilprice.com
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