Unlocking Hydrogen's Potential

The headlines speak for themselves: The hope and hype of hydrogen (The New York Times); The hydrogen from which Berlin's future is made (Bild). Just one week ago, the President of the European Commission, Ursula von der Leyen, started the first auction of the European hydrogen bank in order to support the increase of clean hydrogen in the EU's energy mix.

Hydrogen is derived from the most abundant element in the universe, capable of being stored as a liquid or a gas and can be converted into electricity through a fuel cell and or burning it in gas turbines. On paper, it is the perfect energy carrier, yet hydrogen has had a historically bumpy ride.

First and foremost, most hydrogen used today is extracted from fossil fuels in a process that requires a lot of energy and emits vast amounts of carbon dioxide — something referred to as gray hydrogen. Last year, Germany produced 44 terawatt hours of hydrogen, of which not even one percent was produced as ‘green’ hydrogen i.e. using climate-neutral green electricity. Furthermore, most countries lack the general infrastructure of pipeline networks needed to transport hydrogen between regions. At current, there are approximately 5,000 km of hydrogen pipelines operational worldwide in comparison to 2,15 million km of oil and gas pipelines. Converting gas into hydrogen pipelines and building out the infrastructure will take many years and billions of dollars.

What has resulted is a chicken-and-egg problem. If clean hydrogen remains more expensive than gray hydrogen, customer demand for clean hydrogen will remain low. With low customer demand, there is no perceived need to invest in new infrastructure, which in turn means no demand. In conclusion, hydrogen has become the most talked-about, but the least acted on energy carrier in the industry.

Despite the roadblocks, clean hydrogen is indispensable for decarbonization and a vital piece of the puzzle to achieve net zero emissions by 2050. The missing part to fulfill renewable power’s promise of turning hydrogen green is the electrolyzer. The like of which can be seen in the photo below.

To utilize hydrogen as a clean energy source, it needs to be separated from the elements it is naturally bound together with (such as oxygen, nitrogen, carbon, etc). Electrolyzers do precisely that. They split water into hydrogen and oxygen by using electricity. As a result, factories and power plants can use clean hydrogen and further energy carries such as e-fuels or e-ammonia without generating more greenhouse gases.

If we want to be serious about the hydrogen economy, we need to ramp-up electrolyzer manufacturing capacity and build up supply chains at lower cost. I am very proud therefore, that a couple weeks ago we at Siemens Energy together with Air Liquide set in motion a 2,000 square meter electrolyzer gigawatt-scale factory in the heart of Berlin. With the first gigawatt of annual production capacity already up and running and to be expanded to at least three gigawatts by 2025, the factory is one of the largest electrolyzer factories in the world. I am especially proud of what has come together here, as it proves that great things are possible when determined entrepreneurial action and political support come together. With the financial support of the German Federal Ministry of Research and Development, we are ensuring that electrolyzers for green hydrogen generation are finally being produced in larger quantities and with the “Made in Europe” label.

Projects like these are essential if hydrogen is to live up to its promise as a perfect energy carrier and create a solid basis for the required ramp-up of electrolysis production capacities. This is only just the beginning. For a hydrogen economy to succeed on a European, or even a global level, we need tangible and fast action. The targets are already ambitious, the technology is available, but we are still not seeing a clear business case that moves the necessary amount of hydrogen projects forward.

I want to highlight four points from a policy perspective that are critical to create a robust, global market for clean hydrogen:

1. Provide incentives:

Incentives are needed in key offtake sectors to use hydrogen to store renewable energy and decarbonize industry. These include e.g. quotas and carbon contracts for differences in industry, in the decarbonization of electricity systems and for mobility.

2. Improve financing systems and financial support:

The energy transition needs financing, funding, and state guarantees to decrease risks and make hydrogen projects bankable world-wide. This is the only way to scale technologies, support domestic production, and expand the project pipeline.

3. Build infrastructure:

Pipelines, ships, and terminals to transport hydrogen and its derivatives must be built quickly to connect supply and demand centers.

4. Establish clean H2 certification schemes:

Globally recognized certification schemes are essential to making clean hydrogen a globally tradable commodity.

Starting the clean hydrogen industry today is essential to achieve zero emissions by mid-century. By means of strong partnerships, we can see what is possible in scaling up the building blocks of a clean hydrogen economy fast. A huge thank you to the joint team of Siemens Energy and Air Liquide that have come together to make the Gigawatt Electrolyzer Factroy possible based on the strong political support. Let it be an example of how collaboration and innovation can drive us towards a cleaner, more sustainable future.

Francois Jackow, Anne-Laure de Chammard #hydrogen #energytransition #decarbonization #COP28