There are four key steps to bringing down the costs of green hydrogen to be competitive with grey, according to Caroline Hillegeer, chief commercial officer of the hydrogen division of French utility Engie, told the First Element hydrogen conference.

“The gap in competitiveness could be limited in 2030 thanks largely to reductions in the production costs of electricity,” she says. “This cost reduction has largely already been engaged. What is really essential is four further areas of effort.”

The first of these areas is the mobilisation of offtakers to sign contracts and ensure green hydrogen production facilities do not become stranded assets.

The second is to scale up technology as quickly as possible to bring down costs and gain economies of scale.

“We need to de-risk these projects for investors” Hillegeer, Engie

The third is to engage policymakers to provide long-term regulatory frameworks and ensure all stages of a competition are derisked.

“That means risk optimisation of each building block to make sure the whole value chain—technology, system integration, manufacturing—is fully optimised,” says Hillegeer. “It is about transferring risk to the party who is best placed to manage it.”

The fourth is to develop transportation and infrastructure links to encourage the growth of a market for green hydrogen.

Multi-sector approach essential

Pursuing a multi-sector approach in any hydrogen strategy is vital in linking up supply and demand and helping to further de-risk investment, according to Michelle Detwiler, executive director of US advocacy group the Renewable Hydrogen Alliance.

“We are focused on transportation, power and industrial,” she says. “Being able to capture surplus renewable power and transfer it to other markets is key in our region.”

Although the US hydrogen shot initiative is ambitious, the policy environment is still more favourable in the EU for the development of the hydrogen sector, the panellists agreed.

The EU has R&D funding, project-support funding, and a high carbon price, all of which are factors missing in other regions.

“In Europe, on the hydrogen side, there is everything available which is needed,” says Cornelius Matthes, CEO of Dii Desert Energy. “The CO₂ price will be one of the biggest catalysts to accelerate the energy transition and eventually the adoption of green hydrogen.”

 

 

---

Author: Tom Young