The green hydrogen revolution is swiping across the gulf states. In 2021, the UAE inaugurated the Gulf's first ever "green hydrogen" plant. KSA based ACWA Power, has nearly completed financing for a $5bn green-hydrogen project. Oman, whose oil reserves are smaller and more expensive to extract than those of its larger neighbours, the country is considering investing $30 billion in what could be the largest hydrogen factory in the world. In fact, it has launched a state-owned entity to offer green-hydrogen projects concessions in its special economic zones.
According to The Business Standard, UAE's state owned Masdar is funding a green hydrogen initiative in Egypt with $10 billion, building 4 gigawatts (GW) of green hydrogen and renewables projects in Azerbaijan, and investing in a green hydrogen start-up in northern England.
ACWA Power plans to invest billions of dollars in green hydrogen projects in Egypt, South Africa, and Thailand. The United Arab Emirates and Saudi Arabia have set a goal of controlling 25% or more of the clean hydrogen export market by 2030.
Green hydrogen (GH2) is being dubbed as the next big stepping stone in the journey towards a successful transition from fossil fuel to fuels that are not killing the planet. What makes green hydrogen special is the fact that not only it can be used to produce climate-neutral fuel and could power hard-to-decarbonise sectors like steel manufacturing, aviation and shipping.
Green hydrogen is a type of hydrogen that is produced through the electrolysis of water using renewable energy sources, such as solar or wind power. The process involves splitting water molecules into hydrogen and oxygen using electricity, with the oxygen being released into the atmosphere and the hydrogen being collected and stored for use as a fuel.
As long as the hydrogen is extracted using renewable energy and not fossil fuels, it produces no CO2 emissions and is considered green. Hydrogen fuel produces about 33.33 kWh of energy per kilogram, while gasoline and CNG only produce 12 kWh/kg and 14.7 kWh/kg, respectively. A kilogram of hydrogen can power a fuel cell vehicle for 100 to 131 kilometre, while a kilogram of gasoline will only get you 16 kilometre.
There are potential uses aplenty for green hydrogen. The usages include:
Transportation: Green hydrogen can be used as a fuel for vehicles, like cars, trains, and even aeroplanes. It can be used in fuel cell vehicles, which use a chemical reaction between hydrogen and oxygen to produce electricity, or it can be burned in internal combustion engines. The first fleet of hydrogen fuel cell trains have already started operating in Germany. Hyundai has announced that it will be manufacturing 5,00,000 hydrogen vehicles by 2030. In several European cities, waste collection vehicles are already powered by this technology.
Electricity generation: green hydrogen can be used to generate electricity through fuel cells or by burning it in a gas turbine.
Heating: Green hydrogen can be used to heat buildings and homes.
Industrial processes: Green hydrogen can be used in a variety of industrial processes, such as the production of chemicals, metals, and cement.
Agriculture: Green hydrogen can be used to power farm machinery and to produce fertilisers.
Storage: Green hydrogen can be used as a means of storing excess renewable energy.
Trade: Green hydrogen can be produced in countries with abundant renewable energy resources and then exported to countries that do not have such resources. In February 2022, the first shipment of liquefied hydrogen from Australia to Japan took place. This was a big step toward building an international market for hydrogen. Based on the projects that are being built with the goal of exporting in mind, it is estimated that 12 Mt of hydrogen could be exported every year by 2030.
Green hydrogen has a long way to go, however. The production of low-emission hydrogen was less than 1 Mt in 2021, practically all of it coming from plants using fossil fuels with carbon capture, utilisation and storage (CCUS)
Challenges
There are several challenges and limitations to the widespread adoption of green hydrogen as a fuel and energy source. The biggest challenge to the mass adoption of green hydrogen is cost. Currently, the production of green hydrogen is more expensive than the production of hydrogen from fossil fuels.
The high expense of producing GH2 limits its use in industry. For instance, many businesses are hesitant to switch to GH2 despite the fact that the steel and chemical sectors utilise a lot of hydrogen. The current market situation sees more expensive green products competing with more established, less expensive grey alternatives, especially in capital-intensive industries with slim profit margins.
For producers of grey hydrogen using steam methane reforming costs now sit at $3.30 per kilogram of hydrogen while green hydrogen was $3.80-$5.80/kg before the conflict in Ukraine. However, as the technology improves and economies of scale are achieved, the cost is expected to decrease.
Green hydrogen production costs should drop to below $2/kg by 2030 if current trends in investment remain steady.
There is also currently a lack of infrastructure in place to support the widespread use of green hydrogen as a fuel. This includes a lack of hydrogen fuel stations, hydrogen storage facilities, and hydrogen-compatible vehicles. This is also going to need considerable investment.
According to the Energy Transitions Commission (ETC) decarbonising energy and other industries globally using hydrogen will require investment of almost $15 trillion between now and 2050. In addition to the 90,000 terawatt hours (TWh) required for decarbonisation in general, the production of green hydrogen will require an additional 30,000 TWh of carbon-free power supply by 2050, according to the ETC. This will necessitate investments of approximately $15 trillion, peaking at around $800 billion per year in the late 2030s, not only for hydrogen production but also for the electricity supply to handle the large growth in hydrogen use.
Approximately 85 percent of the required investment would be allocated to power generating, while 15 percent would be allocated to electrolysers, hydrogen production facilities, and transport and storage infrastructure. One cost cutting measure that experts suggest might be worth a look is repurposing natural gas pipelines for the transmission of hydrogen. This can cut investment costs 50%-80%.
Given the limited capacity and high cost of compressed hydrogen containers, large-scale geological storage will be required for the produced hydrogen. The lowest cost option is storing hydrogen in salt caverns, although doing so would need around 4,000 caverns of the "average" size if 5% of the world's annual hydrogen consumption in 2050 needed to be stored. For now this is a question mark.
Besides, hydrogen is the fact that it is a highly flammable gas, and there are concerns about the safety of storing and transporting it. The process of producing green hydrogen through electrolysis is not 100% energy efficient, as some energy is lost in the process. The existing technology operates at 75% or less efficiency (52.5kWh/kg). On the bright side there are new technologies like Hysata's capillary-fed electrolyser (CFE) on the horizon that promise an efficiency of up to 95%. While green hydrogen itself does not produce carbon dioxide emissions when it is burned, the production of green hydrogen does generate some emissions, primarily from the production of electricity used in the electrolysis process.
Green Hydrogen also represents significant opportunities for the global south including countries like Bangladesh. Countries in the Global South are likely to benefit from the new ways to industrialise. In Chile, for instance, auctions have been held to help pay for the first 388 MW of GH2. Colombia's GH2 strategy includes steps to boost both the country's export goals and its ability to ship hydrogen to meet expected international demand. It also promotes Colombia as a potential logistics hub in the Caribbean.
The global energy crisis has led Bangladesh to focus more on green energy and green hydrogen is an important piece of that puzzle. Bangladesh Council of Scientific and Industrial Research (BCSIR) is already working on Bangladesh's first hydrogen fuel production plant. Using a technique known as biomass gasification and electrolysis of water, the facility will manufacture hydrogen by turning municipal garbage and water into highly flammable fuel. The BCSIR has already established one unit of the plant, and the process to establish another is in full motion. Once both units are operational, they will create around 5.8 kg of hydrogen fuel per day. The volume might reach 29 kg if the plants operate continuously. On 27 October 2022, State Minister for Power, Energy and Mineral Resources Nasrul Hamid announced that Bangladesh is going to follow 'hydrogen policy' to tackle the power problem.
