Green means go

Naomi Potter, Cornwall Insight,

UK, outlines how green hydrogen is playing a key role in the renewable transition across Europe, especially for hard-to-abate sectors.

Low-carbon hydrogen plays a key role in ambitions for a renewable transition across Europe, in particular for hard-to-abate sectors such as heavy goods vehicles (HGV) transportation, heavy industry, and heating. The term ‘low-carbon hydrogen’ is widely understood to incorporate a number of ‘shades’ of the technology, which vary according to production method. This includes green hydrogen produced through electrolysis via renewables – such as solar photovoltaics (PV) and wind energy.1 Throughout Europe, and especially within the EU, green hydrogen has received significant attention. The EU announced its target of 40 GW of electrolyser capacity for green hydrogen by 2030 in its bloc-wide hydrogen strategy published in July 2020.2 Drawing on findings from Cornwall Insight’s Low-carbon Hydrogen Index,3 this article will explore the policy and commercial landscape for green hydrogen in countries across Europe. It will chart the emergence of supply chains as well as forward-looking government plans and present regulation.

Germany leads the globe

At present, Germany is one of the global leaders in terms of hydrogen capacity targets, which increased from 5 – 10 GW by 2030 after the inauguration of the new Federal Government in late 2021.4 The country also intends to be at the heart of development across the globe, having launched organisations and funding schemes aimed at encouraging investment in hydrogen projects abroad.5

In its national hydrogen strategy, Germany has a clear focus on scaling-up green hydrogen domestically.6 No subsidies are made available for the production of blue hydrogen, and all targets for

capacity pertain only to the green shade of the technology. Domestically, the government maintains its commitment to fund and develop the green shade of the fuel.

This has come into conflict with key industry and government figures. In spite of any domestic debate, the sector is still developing at pace in Germany. As detailed in the Hydrogen Strategy for North Germany, a key advantage for the scale-up of low-carbon hydrogen across the country is that “the generation, temporary storage, distribution, and use of hydrogen are geographically concentrated.”7 This clarity regarding demand centres and sources of supply offers confidence for developers and investors, allowing the German hydrogen supply chain to begin building out. For instance, transport networks – an area of concern for hydrogen industries across Europe – are already in construction in Germany as RWE and OGE’s H2ercules get underway to link the North Sea coast to industrial clusters in southern Germany.8

Demand-side boost needed in the UK

The UK stands alongside Germany in having the highest capacity target for low-carbon hydrogen in Europe at 10 GW.9 A recent update on these ambitions included a commitment that ‘at least half is to come from electrolytic hydrogen’, meaning that the 10 GW is roughly split into a 5 GW target for blue hydrogen and 5 GW for green hydrogen.9 This technology agnostic approach stands in contrast to Germany, inviting criticism and debate amongst key players across the industry.

The UK’s funding schemes for low-carbon hydrogen are already in motion, with applications for the Net-Zero Hydrogen Fund Strand 1 and 2 closed and competition winners due to be announced later this year.10 Funding in both strands is focused on hydrogen production projects.

There are also plans for the next five years relating to the trialling and funding of demand-side projects; however, these are yet to get underway.11 Research across the sector, such as Cornwall Insight’s paper on the role for industrial decarbonisation, has helped to shed light on what sectors are likely to offer the strongest use cases in the UK and the routes-to-market for the technology.12 Moreover, some cross-supply chain partnerships are forming across the country, such as the recently announced Octopus Hydrogen and GeoPura joint project to use hydrogen as a replacement for diesel generators.13

One sector on the demand-side requiring more focus in the coming years is transport. At present, the country has 19 active low-carbon hydrogen refuelling stations, substantially behind Germany and France, which stand at 101 and 41 stations respectively.14 The UK Government Hydrogen Sector Action Plan lists transport as a key demand centre for low-carbon hydrogen fuel.15 However, more action is required in this sector to ensure a lack of refuelling stations does not hold back this potential key use-case for the technology, especially given the rapid scale-up and decreasing costs of electric vehicles.

Critical transport infrastructure building out in France

France is third behind Germany and the UK in terms of electrolyser capacity targets, with 6.5 GW committed to by 2030.16 As in the UK, transport and industry are expected to be key demand centres with both being listed in France’s Hydrogen Strategy as priority areas for investment.16 As mentioned previously, France is

Figure 1. Two hydrogen atoms joined by a covalent bond.

further ahead than the UK in building out its transport infrastructure. Indeed, significant activity has been seen in the past five years with regional governments taking a key role. For instance, Auvergne-Rhône-Alpes installed a total of 14 refuelling stations on major roads, and there have also been key developments in rail transportation.17 Moreover, in 2019, the regions of Auvergne-Rhône-Alpes, Bourgogne-Franche-Comté, Grand Est, and Occitanie – through the public railway operator SNCF – signed the first order of 12 dual mode electric-hydrogen trains in France.18 Recent updates confirmed that these trains will make their first trial runs in 2024.18

France published its national hydrogen strategy in 2021 with a clear focus on domestic production of green hydrogen in regional valleys, as opposed to importing.16 President Emmanuel Macron has also come out more recently in support of hydrogen produced via nuclear energy; however, this shade of hydrogen does not directly feature in the national strategy.19

Southern Europe’s pipeline

In southern Europe, countries such as Spain and Italy follow Germany’s lead in focusing largely on green hydrogen. All three countries have released hydrogen strategies and roadmaps with electrolyser capacity targets at 4 GW and 5 GW by 2030, respectively.

These countries have strong potential to play an instrumental role in importing hydrogen into Europe – especially from the African continent – as well as exporting generation. At present, technical and regulatory issues related to grid transportation of hydrogen pose a barrier to the successful implementation of this role. In Spain and Italy, the issue is largely regulatory, with a lack of suitable legislation to permit the injection of hydrogen into gas networks. By contrast, technical expertise is relatively strong in both countries with leading companies and organisations already operating in the area.20 In order to harness this advantage and take action on their potential for transporting hydrogen across Europe, focus needs to be on addressing the regulatory limitations for hydrogen networks.

2022 sees momentum grow in Ireland

Ireland is yet to publish its hydrogen strategy, but recent months have seen a boost of activity. On the policy and regulation side, the government announced in July 2022 that it had opened a consultation for a hydrogen strategy.21 In May, on the project development side, energy firm EI-H2 announced that it is seeking planning permission for a 50 MW electrolysis plant in Aghada, County Cork, Ireland. Shortly after, GH2, a consortium of firms and organisations including NUI Galway, the Port of Galway, and SSE Renewables, announced plans for a hydrogen valley.22

The country is well placed to take advantage of its ample offshore wind resources and access to water. In addition, Ireland has a modern gas network with polyethylene pipes which, early studies indicate,23 are capable of injection and transportation of hydrogen through the grid. As with other European states, work needs to be done now to develop the regulation and technical expertise to match.

Infrastructure critical to match Europe’s ambitions

Across Europe, plans for low-carbon hydrogen scale-up are progressing at pace. Given recent concerns around gas supplies and impending target deadlines for net zero commitments taken by countries across Europe, the need to develop the low-carbon hydrogen sector is increasingly urgent. In order to respond to this, it is vital that countries ensure that regulations are appropriately updated and technical or supply chain limitations addressed. While each country will have its unique issues to respond to, ensuring the scale-up of infrastructure for demand-side and hydrogen networks are critical areas for focus in countries across the continent.

References

A comprehensive list of refences can be found of the Energy Global website: www.energyglobal.com/ special-reports/

Figure 2. Hydrogen chain.