NEW YORK, June 24 (Reuters) – Reducing the cost of producing clean hydrogen, thanks to large investments and government subsidies, will be the key to wider fuel adoption in the years to come, have panelists told Reuters Events: Global Energy Transition.
So-called green hydrogen, made using renewable energy to power electrolysers to convert water, is backed by many governments for vehicles and power plants, but is currently too expensive for widespread use.
Today, the price of green hydrogen is about four times that of gray hydrogen, obtained by extracting hydrogen from fossil fuels such as coal or natural gas while releasing carbon monoxide and carbon. carbon dioxide, said Marcelino Oreja, Managing Director of Enagas SA (ENAG. MC).
This month, the Biden administration set a goal of reducing the cost of producing clean hydrogen by 80 percent to $ 1 per kilogram over a decade. Read more
“We need real projects to bring the prices down… I think we’re going to see big projects producing large amounts of hydrogen in 2025 and beyond,” Oreja said.
Enagas and the Spanish oil and gas company Repsol (REP.MC) are developing technology to produce renewable hydrogen using solar energy.
Project results are expected by 2024 or 2025 and it will be commercial after that, Oreja said.
The current industrial hydrogen business is valued at around $ 200 billion and there are more than double that number of new projects that have been announced recently, said Hydrogen Council executive director Daryl Wilson.
“We’re seeing huge momentum… the industry is going to more than triple in the near term as the rate of new projects picks up,” Wilson said.
Industries where electrification is not easily possible, including long-haul transportation – such as the maritime and aviation industries – are likely to be the first to adopt hydrogen, the panelists said.
Air Products and Chemicals Inc (APD.N) builds $ 7.5 billion green hydrogen ammonia production facility in Saudi Arabia with partners ACWA Power (APBS.OM) from Oman and the megalopolis of the future NEOM of the kingdom.
Seifi Ghasemi, Chairman and CEO of Air Products, said northern Saudi Arabia was perfect for the project as it enjoys lots of sun during the day, wind at night and access to ports. which can ship ammonia, intended for use as a fuel in heavy transport. and heavy industry to world markets.
“I know there are a lot of projects announced, but it takes a lot of time and effort to put it all together,” Ghasemi said.
Hydrogen will play a central role in the energy transition as it can bring together electrical, liquid and gas systems, the panelists said.
“Like the human body, where there is a deep integration of a molecular system and an electrical system… we need them to work together in harmony and hydrogen gives us that opportunity,” Wilson said.
Reporting by Devika Krishna Kumar in New York and Timothy Gardner in Washington DC Editing by Marguerita Choy
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