German tech giant makes major bet on green hydrogen



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Hydrogen is fast becoming the next media star after solar and wind. In its latest claim to fame, two spinoffs from German tech conglomerate Siemens are joining forces advancing green hydrogen technology by building wind-hydrogen systems to help decarbonise the global economy. Green hydrogen is touted as a solution to many climate change problems: the element can be an energy carrier, it can be used to store energy, and it can be used in fuel cells to power cars. Green hydrogen is a particularly attractive option because its production comes from the hydrolysis of water using electricity produced by renewable systems, which means that it has a much smaller carbon footprint than hydrogen from gas or coal.

Siemens Gamesa and Siemens Energy have therefore joined a growing group of supporters of green hydrogen, many of whom see it as the ultimate solution to the planet’s pollution problem.

The two plan to invest $ 120 million over five years to develop a fully integrated offshore wind-hydrogen system that involves a turbine with an integrated electrolysis system, the companies said in a press release this week. They are aiming for a large-scale demonstration of their pilot by 2025 or 2026.

“Our wind turbines play a major role in decarbonizing the global energy system, and the hydrogen potential of wind power means we can do it for hard-to-scale industries too. It makes me very proud that our employees are helping to shape a greener future, ”Siemens Gamesa Managing Director Andreas Nauen said in the statement. Related: Saudi Arabia Launches New Bullish Race In Middle East Oil

“With these developments, the potential of regions with abundant offshore wind will become accessible for the hydrogen economy. This is a great example of how we can store and transport wind energy, reducing the carbon footprint of the economy, ”said Siemens Energy Director Christian Bruch.

Despite all its promises, the production of green hydrogen is not a problem-free technology. It is a very expensive technology that has made some experts warn that it is unlikely to be economically viable for years or even decades to come. And yet, some foresee significant cost reductions for the technology.

Analysts at Wood Mackenzie, for example, wrote last year in a report that they expected green hydrogen production costs to drop 64% by 2040 and in some places even earlier.

“On average, the costs of producing green hydrogen will equal that of fossil fuel-based hydrogen by 2040. In some countries, like Germany, this happens by 2030. Considering the magnitude we’ve seen so far, the 2020s will likely be the decade. hydrogen, ”wrote the report’s author, senior research analyst Ben Gallagher, adding:“ Rising fossil fuel prices will boost green competitiveness, further strengthening the case for this technology in the years to come. to come up.

And yet, this cost reduction will require a fairly solid effort: at present, the production of green hydrogen costs between three and six times more than hydrogen derived from gas. On the other hand, gas-derived hydrogen prices may rise as demand for gas increases, which level the playing field somewhat. However, this suggests that green hydrogen would be dependent on gas prices. for its competitiveness rather than technological advances that would make the process itself cheaper.

It is clear that the energy transition will have a cost. The question is, how much will this cost be and how much can the world afford. Solutions like that from Siemens Gamesa and Siemens Energy are working on sound as the way to make the process cheaper and bring green hydrogen closer to traditional reality. However, it should be borne in mind that these solutions would be region specific rather than universal. For now, traditional green hydrogen remains more of a promise than a reality.

By Irina Slav for OilUSD

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