120 GW Renewable Capacity, €340 billion Investments. The Numbers Behind EC’s Hydrogen Move

The European Commission has finally shared some more details of its ‘Green Deal’ plan. Using energy from hydrogen is a key plank of the plan, with the energy to electrolyse hydrogen coming from solar and wind energy. Electrolyser technologies are expected to mature enough by 2030. The bloc has zeroed in on Hydrogen as many parts o the economy cannot make the switch to electric power just yet, from industries such as metals and chemicals, to sectors like  shipping, aviation and heavy-duty road transport. The energy sector accounts for 75 percent of the EU’s greenhouse gas emissions.

“Hydrogen is a vital missing piece of the puzzle to help us reach this deeper decarbonisation,” said Kadri Simson, the EU’s energy commissioner who presented the strategy on July 8 last week.

The EU has a target of decarbonisation by 2050, for which Hydrogen is seen as a vital link. Clean hydrogen could meet 24% of the world’s energy demand, with annual sales in the range of €630 billion.  By producing it in the continent, and not importing it like the massive gas imports from Russia and other sources currently, the EC also hopes to create a million jobs in the Hydrogen sector.

So why hydrogen, you might ask?

Quite simply, it is abundantly available (like sunlight), and is much more safer to use as compared to say, nuclear power for energy intensive applications. The challenge however, is extracting it in its usable form.

Electrolysis, the process of separating hydrogen and oxygen atoms by running a high electrical current through wateris very energy intensive. Hence the focus on getting clean energy for powering the giant electrolysers planned.

Besides fuel, Hydrogen can also be used for energy storage, or as a feedstock for industries that burn fossil fuels right now.

With no harmful by-products,  hydrogen is a clean energy source. Thus, only the extraction is a challenge to be solved.

Its current cost of production makes it impossible for the gas to outperform other fuels presently.

Today, hydrogen represents a very small fraction of the EU’s energy output, at around 2 per cent. Moreover, it still largely comes from fossil fuels – like oil, natural gas or coal – and is responsible for between 70 to 100 million tonnes of the CO2 being produced annually in the EU.

The entry for solar and wind power comes in the form of the opportunity to power the electrolysers to create clean  Hydrogen, as the alternate method to produce it from fossil fuels  does not go far enough to make an impact. These electrolysers will require €220-340 billion for the commissioning of 80-120 GW of solar and wind generation capacity over the next decade.

In its first four years alone, the strategy sees the deployment of around 6 GW of new electrolyser capacity to produce a million tons of green hydrogen. That figure would be ramped up to 40 GW of electrolyser capacity and ten million tons of hydrogen from 2025-30. From 2030 on, the strategy anticipates green hydrogen would be a mature technology to be used in ‘hard-to-decarbonise’ sectors.

The EC clearly hopes to grab pole position in terms of both technology and supplier status, in this key fuel for the future.