Experts have been praising the multiple benefits of hydrogen over other energy sources (including renewables) for several years, and it seems that lately society and governments are opening the way to its implementation.
Hydrogen is not something new, it was already being used years ago, but it was not considered a clean energy in its entirety. It required fossil fuels for its extraction, and was somewhat complex (called blue hydrogen).
However, what all committees, governments and society as a whole have been calling for lately is the use of green hydrogen, which is non-polluting and does not create any waste.
According to what we have just mentioned, everything seems to be ideal, however, obtaining this gas requires a high cost, and this is the main drawback that they are currently trying to reduce, in order to obtain a much more affordable price.
One of the main negative points of hydrogen is its transportation, requiring a large source of capital. It can be transported by road, at very high pressure or very low temperature, and also by pipeline, where greater efficiency and stability have been demonstrated,” explains Carlos Andreu, professor at EAE Business School.
One of the requirements for the use of the European funds presented by the ECB is to invest part of the borrowed capital in this energy, accelerating exponentially its entry into the market.
Without going any further, the Spanish government announced that it was going to use 1.5 billion euros to develop this technology. In Spain, companies such as Iberdrola, Endesa, Repsol and Naturgy will be the main beneficiaries of this fund.
If it can finally be produced at a cost that is competitive with other energy sources, there is no expert who would oppose this source, since the benefits are countless.
However, can the hype be overblown?
“The green hydrogen needed to keep the planet’s temperature below 2°C would require a system 6 to 8 times larger than today’s in total capacity, a third of which would be for hydrogen production. Green hydrogen supplying a quarter of the final energy would require 38% more energy than is produced in the world today. Doing it with wind and photovoltaics would take up 3.5 million square kilometers, equivalent to the size of India, and investments between $78 and $130 billion for hydrogen production, storage and transportation through 2050,” according to Bloomberg.
Bank of America has warned that for green hydrogen to be competitive it will still need to reduce its costs by 85% and Wood Mackenzie puts off that possibility until after 2030.
Green hydrogen has a future, but not in the short term. It may be more rational to allocate those 1.5 billion euros to aid for SMEs, measures to revive the economy or other purposes to reduce the current debt in which we find ourselves, because investments in green hydrogen will bring with them cost overruns, overcapacity, transportation problems ….
We are not trying to say that we should not invest in green hydrogen, because it may well be the solution of the future, but we reiterate, of the FUTURE. Perhaps at present, for an economic recovery fund, it is not the most convenient.
Perhaps investing in electrification, a much more consolidated source than hydrogen, and of which there are more advances, is a better alternative to achieve the energy efficiency that we all long for.
Finally, the European Climate Foundation’s report, “Towards Fossil-Free Energy by 2050”, concludes that smart electrification of heating and cooling, mobility and industrial processes, combined with energy efficiency, can be 36% cheaper than large-scale green hydrogen and save up to 23 billion euros in energy costs in Europe, because it would reduce net demand by 44% to 70%.
And you… What do you think?
