The market demand for Green Hydrogen Production reached an estimated 87 million metric tons in 2020 and is expected to increase to 500–680 million MT by 2050. From 2020 to 2021, the hydrogen production market was esteemed at $130 billion and is estimated to increase up to 9.2% per year through 2030. But there’s a catch: over 95% of current hydrogen production is fossil-fuel based, and very short of it is “green”. Today, 6% of global natural gas and 2% of global coal go into hydrogen production.
However, green hydrogen production technologies are seeing a renewed surge of interest. This is because the potential uses for hydrogen are growing across numerous sectors including power generation, manufacturing operations in industries such as steelmaking and cement production, fuel cells for electric vehicles, hefty transport such as shipping, green ammonia production for fertilizers, cleaning products, refrigeration, and electricity grid stabilization.
Moreover, dropping renewable energy prices—associated with the dwindling cost of electrolyzers and improved efficiency due to technology advancements—have improved the commercial viability of green hydrogen production.
According to Direct Energy, if these costs continue to fall, green hydrogen could be produced for $0.70 – $1.60 per kg in most regions of the world by 2050, a price competitive with natural gas. NEL, the world’s largest producer and manufacturer of electrolyzers, acknowledges that green hydrogen production cost parity (or even superiority) with fossil fuels could be achieved as early as 2025.
How do we structure a green hydrogen project?
Direct Energy’s fuel cell “know-how” has led to the opportunity to develop our Solid Oxide Electrolyser Cells (SOECs).
This will provide High-Efficiency Green Hydrogen (and potentially green syngas – the basic building block of many chemicals – via CO2 and steam electrolysis) production, utilizing thermal energy to reduce electrical demand. High temperatures increase efficiency in both fuel cells and electrolyzers but conventionally bring the need to use expensive materials and manufacturing methods. Our unique design overcomes this basic challenge potentially making the production of affordable green hydrogen a commercially affordable reality.
Solid Oxide Electrolyser cells offer the potential to generate green hydrogen and green syngas cost efficiently. Green hydrogen production is of critical importance moving forward as:
- It is a zero-emission energy source when run through a SOFC
- Governments around the world are stepping up their efforts both to phase out Internal Combustion Engines in vehicles and reduce their future reliance on traditional fossil fuel and nuclear energy sources.
Hydrogen is additionally unique in the sense that it is easy to store/transport. As the such increased focus is now being placed on the potential role that SOECs can play in meeting the world’s future global energy needs.
Indeed, a PwC Strategy & Report (2020) estimates that global demand for “green hydrogen,” produced with minimal carbon dioxide (CO2) emissions, could reach about 530 million tons (Mt) by 2050, displacing roughly 10.4 billion barrels of oil equivalent (around 37 percent of pre-pandemic global oil production). They estimate that the green hydrogen export market could be worth US$300 billion yearly by 2050, creating 400,000 jobs globally in renewable energy and hydrogen production.
Governments also need to create policy and regulatory frameworks that incentivize investments. Building capacity and providing technical services for governments, particularly in appearing markets and developing economies, is key to creating these rules and providing their enforcement and compliance. Also, there is a need for a globally agreed definition of green hydrogen and methods to guarantee and certify the origin of the fuel. Also necessary, especially in light of the Just Growth agenda, is the need to help workers acquire the skills they need for this emerging industry.