Green Hydrogen Production Transparency Initiative and how can it help
California officials see green hydrogen as a viable alternative to fossil fuels for diesel vehicles. The company SGH2 recently announced plans to build a large green hydrogen production facility in southern California. The company plans to make green hydrogen by converting waste into a gas by using a process called waste gasification, which involves exposing waste to high temperatures to break it down into molecular compounds that bind with hydrogen. This process has several advantages over electrolysis, but it is currently more expensive than the former.
Transparency in green hydrogen production
To make green hydrogen production more transparent, the gas technology institute, the National Energy Technology Laboratory, and S&P Global Platts are launching an initiative. These organizations advocate for precise carbon intensity measurements at all hydrogen production facilities. Accurate data is crucial for aggressive decarbonization. Without this, there is no way to know the true costs of hydrogen production. In order to improve transparency, the gas technology institute and Platts are promoting the creation of a global green hydrogen standard.
As hydrogen is emerging as a promising alternative fuel, the development of more accurate and transparent tools for measuring carbon intensity is essential. In order to do so, these tools must be standardized and objective. Stanford's Oil Production Greenhouse Gas Emissions Estimator Model has become the gold standard in measuring carbon intensity in the oil industry. This initiative will convene stakeholders from diverse sectors to develop an objective and transparent measurement method for measuring carbon intensity in green hydrogen production.
Green hydrogen is a cleaner alternative to fossil fuels. It produces no greenhouse gas emissions and can be used anytime and anywhere. Its environmental benefits make it essential to address the climate crisis. It is produced by electrolyzing water. Water is electrolyzed to separate hydrogen from oxygen. Once the hydrogen and oxygen are separated, the remaining water is produced as intermediate products. The hydrogen from these intermediates can then be linked up with the H2 production facility.
As the hydrogen market grows, governments must channel investments into it. But governments have to recognize that not all industries are ready to go entirely green. Chemical industries and aviation industries are difficult to decarbonize. As of now, hydrogen produced from fossil fuels can cost $1-$1.8 per kilogram, while green hydrogen production can cost $3-$6 per kg. That's significantly higher than fossil fuel alternatives. The European Union is also developing a green hydrogen strategy to reduce net carbon emissions to zero by 2050.
While the cost of green hydrogen production may keep it out of competition with fossil fuels, renewable energy technologies have seen electricity costs drop dramatically over the past two years. Meanwhile, the world plans to recover its economy after the deadly coronavirus outbreak. Trillions of dollars are ready to invest in renewable energy technologies and build back better approaches. But before we can fully embrace green hydrogen, it needs transparency. The benefits are enormous.
GIS-based smart maps help energy companies gain visibility into the process of green hydrogen production and help them make confident decisions based on evidence. In addition, these technologies enable companies to increase their operational efficiencies and apply more efficient processes at scale. The key to reliable growth is to use decision support systems that provide holistic operating pictures. They also reveal patterns and outliers and model potential outcomes. So, how can the energy industry improve transparency in green hydrogen production?
Cost of green hydrogen
The headline cost of green hydrogen production is Rs 2 per kWh or unit and varies by geography and the potential for renewable energy in the region. In California, for example, solar PV costs are significantly lower than in most other states, and the broader renewable energy cost is also less. But this does not mean that green hydrogen production will be free of costs. It's also important to note that the cost of green hydrogen is dependent on various factors, including the costs of network connection and electricity taxes.
The costs of green hydrogen production must be considered in terms of the initial investment, as well as the cost of electricity. An electrolyzer costs around $840 per kilowatt of capacity today, and the process consumes a fair amount of electricity. The more efficient the process is, the lower the operating cost. An electrolyzer's efficiency depends on how much electricity it needs to produce hydrogen. Higher efficiency means less electricity is needed to generate hydrogen.
To assess the cost of green hydrogen production, various methodologies were applied. These methodologies typically begin with a series of assumptions that detract from the original first principles approach. Nonetheless, it is clear that government support is necessary to enable this technology to scale. And despite this, a lack of government support may also hamper the market. The Carbon Management Research Initiative, which is part of the Center on Global Energy Policy, analyzed green hydrogen production costs. The study also analyzed emissions intensity and infrastructure requirements. Finally, it identified near-term market opportunities and policies that would encourage the industry's growth.
The cost of green hydrogen production is largely determined by the volume of power needed, the electrolyzer costs, and the opex for running the system. The pricing methodology of electrolyzer companies should provide utilities with a good sense of the overall cost of green hydrogen production. Some pricing methodologies ignore these factors, allowing the utility to decide whether to invest in the technology. But this should not discourage development. The cost of green hydrogen production should be affordable and feasible.
In 2030, the cost of green hydrogen production will be equal to or lower than the cost of fossil fuels. The government is targeting five million tonnes of capacity in India by 2030. The government has also announced a national policy to cut the cost of grey hydrogen production to Rs150 per kg. This policy is likely to cut costs and enable the development of new and advanced green hydrogen projects. A cost of Rs150 per kg is expected in India by 2030, which is significantly less than what it is currently.
The cost of green hydrogen production is largely determined by the electricity used to produce it. An efficient electrolyzer will result in the lowest cost of hydrogen. Hypatia has a world-class engineering, manufacturing, and commercial team. With backing from leading global investors, Hysata is on the fast track to a multi-gigawatt scale. And with a scalable, cost-efficient green hydrogen production model, the benefits of using the technology are unquestionable.
Sustainability of green hydrogen production
As governments commit to becoming emission-neutral over the next decades, it is essential to focus on energy efficiency and sustainability of processes, including green hydrogen production. The European Commission has committed to making Europe carbon-neutral by 2050, and green hydrogen looks like an ideal ally to reach this goal. The Commission also considers hydrogen a key fuel and is committed to developing the technology to make it widely available. One of the projects it is supporting is Torvex Energy's approach to green hydrogen production at sea from offshore wind farms.
The environmental benefits of green hydrogen production can be assessed through the use of process models, including the utilization of renewable sources. In addition to hydrogen, the technology also yields other products such as chemicals and syngas. Hydrogen can be produced from these intermediate by-products, and then linked up with other facilities to create renewable energy. As a result, this form of energy is both environmentally friendly and affordable. The company is working toward developing a sustainable, renewable hydrogen production process and is currently exploring various options.
Green hydrogen is also a renewable fuel, as it can be converted to synthetic gas and electricity. The gas can be used for domestic and commercial purposes. Green hydrogen can be blended with natural gas at up to 20 percent and can travel through the same gas pipes. The proportion of green hydrogen may be increased, but it would require modifications to existing gas networks. Green hydrogen production is more costly than fossil fuels since it requires more energy to produce than traditional fuels.
However, some new studies indicate that blue hydrogen, which is created from fossil fuels, is not as harmful to the environment as was previously believed. The high CO2 capture rates and low methane emissions in natural gas supply are comparable to green hydrogen in terms of climate change impacts. These results suggest that it may be feasible to produce green hydrogen on a large scale within the next five to 10 years. But as with all new technologies, it is still early days.
The use of green hydrogen would allow the world to replace the reliance on fossil fuels and thus prevent 830 million tonnes of CO2 per year. Meanwhile, grey hydrogen (produced from fossil fuels) represents 95% of hydrogen production worldwide. Although green hydrogen production costs are still high, as the decarbonization of the earth progresses, it will become more economically viable. This will be the case as renewable energy becomes cheaper.
Green hydrogen production will take many years to reach the scale necessary for full integration into our energy mix. However, hydrogen has long been a vital feedstock for various industries, including transportation, aviation, and long-haul freight. Furthermore, it can transport renewable energy over long distances and help achieve net-zero-emissions status. The hydrogen economy can help spur a clean energy transition and help integrate multiple sectors. If successful, green hydrogen may even become the fuel of choice for transportation, aviation, and heavy industry.