Unlocking the Potential of Green Hydrogen as a Premium Clean Fuel
Key Ideas
- Green hydrogen is being recognized as a premium clean fuel due to its high production costs and energy-intensive nature, making it an essential energy store.
- The UK's National Infrastructure Commission emphasizes the importance of green hydrogen as an inter-seasonal storage solution in a renewable energy-dominated future.
- Challenges in the hydrogen sector include the need for support mechanisms, demand uncertainty, and bridging the gap between offtakers' willingness to pay and production costs.
- Policy instruments like carbon pricing and target-setting mechanisms within RED III implementation are seen as crucial for incentivizing the transition to green hydrogen.
During the Aurora Hydrogen Conference in London, UK National Infrastructure Commission commissioner Nick Winser highlighted the significance of green hydrogen as a premium clean fuel, essential for inter-seasonal energy storage in a renewable energy-driven system. The UK is projected to require at least 8 TWh of hydrogen storage capacity by 2035, calling for support mechanisms to facilitate its development. Challenges in the sector include the gap between offtakers' willingness to pay and the cost of production, leading to a slowdown in new electrolyser projects in Europe. Industry, particularly in sectors like refineries, ammonia production, and steelmaking, is expected to drive the growth of the hydrogen economy. Despite concerns raised by delays and regulatory hurdles in green hydrogen projects in the UK, policy instruments like carbon pricing and EU ETS mechanisms are seen as essential for accelerating the uptake of green hydrogen. The industry's shift from hype to realism indicates a pragmatic approach towards overcoming barriers and unlocking the potential of green hydrogen as a key component in the energy transition.
Topics
Policy
Blue Hydrogen
Renewable Energy
Energy Transition
Energy Storage
Carbon Pricing
Hydrogen Economy
EU ETS
Industry Role
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