Paper plots path to cost competitive green hydrogen


With the right policy frameworks and market mechanisms, the next 15 years could see green hydrogen reach price parity with fossil-based hydrogen (203), onshore wind (2030) and offshore wind (2035), according to a paper.

On 9 June, Siemens Gamesa published Unlocking the Green Hydrogen Revolution, setting out what needs to happen for the cost of green hydrogen production to be driven down to competitive levels in the next decade. While renewables – mainly wind – have been key to moving towards a greener world so far, a carbon free economy will only be realised if hard-to-electrify sectors can transition to net zero. Green hydrogen can prove the solution here but must be produced cost effectively and at an industrial scale “soon”.

To face the triple challenge of scaling up production, a collaborative, joined-up approach between the private sector, government and public authorities, and investors is needed. This would include coordinating efforts to increase installed electrolyser capacity; developing solutions to effectively store, distribute and transport hydrogen; and implementing policy frameworks that support and encourage ongoing private sector innovation in green hydrogen, while securing future market demand.

Mapping out a path to delivering low cost hydrogen within the next decade, the report set four key requirements, beginning with a drastic increase in the capacity of renewables. If the world is to generate the expected demand for hydrogen by 2050 – 500mn tonnes, according to the Hydrogen Council – it needs as much as 6,000GW of new installed renewable capacity by that date, up from 2,800GW today. A cost-effective, demand-side market for green hydrogen is also necessary to drive down equipment and infrastructure costs, as well as those of day-to-day operations.

A supply chain is required, with initiatives currently fragmented and costly. For this to be successfully developed, renewable energy companies, electrolyser manufacturers, network providers and water treatment specialists must work together. The right infrastructure, in terms of logistics, storage and distribution, must also be built, with investment needed in hydrogen pipeline networks to fully unlock green hydrogen’s potential.

Andreas Naun, CEO of Siemens Gamesa, said: “When it comes to green hydrogen, we need to act now. It took three decades for wind and solar to reach grid parity with fossil fuels, and we cannot afford to wait that long for green hydrogen to reach price parity with fossil-based hydrogen. Wind will play a powerful role in accelerating the production of green hydrogen, which is vital to decarbonising our economy. Therefore, to unlock the potential of green hydrogen, we need to drive down costs quickly.”