A market for hydrogen will start to develop after 2025 in Europe as production ramps up and large offtake agreements are signed, according to panellists at a Reuters energy transition event.

The European Commission wants the EU to install at least 6GW of electrolyser capacity by 2024, making some funding available under its Horizon 2020 programme.

This will kick start hydrogen production in the EU, according to Marcelino Oreja, CEO of Spanish energy company Enagas.

“We are starting to see real projects coming in that will be producing by 2023,” he says. “And companies asking for big quantities of hydrogen before 2025, 2026.”

6GW - Electrolyser capacity Eu targets by 2024

Oreja adds that long-term off take agreements were key to being able to get further large projects financed. Private sector finance is also vital in addition to public financing, not just for larger projects but to encourage the growth of innovative smaller firms.

“We are going to see many different ways to produce hydrogen in the future,” he says. “Venture capital funding will be important.”

Bringing down the costs of green hydrogen will accelerate the uptake of that technology, but until them the market must develop through grey and blue hydrogen, according to Daryll Wilson, executive director of the Hydrogen Council.

“Today, global hydrogen as a business is $200bn annually,” he says, noting that there had been a dramatic increase in project announcements over the past year. “But the industry will triple in short order and the rate of announcements is accelerating.”

Wilson adds that hydrogen valleys served as a good example of how to connect supply and demand, and that hydrogen as an energy vector would eventually connect previously decoupled sectors.

“Our energy system is currently de-integrated,” he says. “What we have in hydrogen is an opportunity to bring all our energy systems back together in an integrated way.”

Once the systems were integrated the market would serve as the best indicator for where hydrogen should flow, he adds.

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Author: Tom Young