We have looked at applications of hydrogen, and specific projects. Here is an analysis of the entire European Union hydrogen market through 2030. The problem, as with many technologies, is reducing costs to be competitive with fossil fuels. But there are applications where that is not necessary. When renewable energy is overproduced in some area, it has been spilled or curtailed. At that point, the cost of the excess renewables is effectively 0 or even negative. Then it can be used to split water into hydrogen and oxygen without regard to the usual financial analysis. Hydrogen thus becomes a form of energy storage, with an extra value for balancing the grid.
Leaked: EU hydrogen strategy eyes €140 billion turnover by 2030
The European Commission has sent the European Green Deal on its way and a preliminary version of its anticipated hydrogen strategy has been leaked. The plan does not lack ambition, as the EU seeks to assert tech leadership in green hydrogen through coordinated efforts across the value chain.
The European Union’s energy system has taken center stage in much of the bloc’s recent political undertakings. After a European Green Deal was crafted in the first 100 days of the new European Commission, lawmakers parried an attempt to dismantle the agreement due to the Covid-19 outbreak with a €1.8 trillion recovery bill, much of which will be used to boost the clean-tech sector.
Subsequently, a number of high-ranking EU officials have noted that the full decarbonization of the economy would require the substantial use of hydrogen. Now, a draft version of the EU’s hydrogen strategy, “Towards a hydrogen economy in Europe: a strategic outlook”, has been leaked. The strategy is scheduled for publication on July 8, but already some clear trends can be seen.
Green hydrogen is produced from renewables without any carbon emissions, while the blue and grey versions are reformed natural gas and therefore release carbon emissions. Blue hydrogen captures, stores or reuses carbon emissions to offset their impact. At the moment, grey hydrogen can be produced for as little as €1.5/kg – a benchmark the EU wants to achieve with green hydrogen, in order to attain price parity. The plan also specifies that the EU will not use any grey hydrogen.
The International Energy Agency (IEA) estimates that the price for green hydrogen is around €3.50 to €5/kg at the moment. The cost of clean energy and electrolysis are the main price drivers here. The draft strategy repeatedly mentions the potential for a hydrogen economy in the European Union, in terms of geopolitics and job creation at the domestic level. Currently, the hydrogen economy in Europe has a turnover of €2 billion. That figure is poised to jump to €140 billion by 2030, accompanied by some 140.000 jobs that could be created.