Green hydrogen not profitable yet, but major investments may spur technology development

Green hydrogen profitable investments technology development

Photo: Branko Milićević


December 22, 2020






December 22, 2020





Projects for production and use of green hydrogen are still more political than economic. Recently announced investments will undoubtedly give a strong impetus to the technologies for hydrogen production, storage and transport, as well as for its conversion back to energy, says Secretary of the Group of Experts on Gas in the United Nations Economic Commission for Europe (UNECE) Branko Milićević. Milićević revealed that UNECE would launch a project for the sustainable production of hydrogen.

The expert from UNECE has been involved with hydrogen energy since 2000, and the organization headquartered in Geneva that he works for is active in the promotion of hydrogen and hydrogen economy.

UNECE stands ready to help Western Balkan countries develop strategies for hydrogen economy that could, among other things, decrease their dependence on coal and cut greenhouse gas emissions, which are important elements of the recently adopted Green Agenda for the Western Balkans.

In its hydrogen strategy, the European Union allows the development of the type of the fuel that’s obtained from natural gas. What does the document change for the technology and the related market and what is the perspective for the Western Balkans?

The EU’s strategy, presented in July 2020, calls for setting up electrolyzer fleet of total capacity between 5 GW and 6 GW by 2025, and then another 40 GW by 2030. The strategy promotes primarily hydrogen from renewable sources, the so-called green hydrogen.

Blue hydrogen, produced from natural gas, is addressed to a lesser degree. It requires capturing and storing carbon dioxide. Also mentioned is the pyrolisis of methane directly into hydrogen and carbon, which Gazprom has been advocating for some time.

It remains to be seen if and when the hydrogen economy would become viable. Investments of such a scale will undoubtedly give a strong impetus to the development of the technologies for the production, storage and transport of hydrogen as well as for its conversion back to electricity via fuel cells.

If electrolyzer capacity utilization is low, a relatively large number of the devices must be installed, making the solution expensive

No doubt, the investments earmarked in the EU Hydrogen Strategy will strongly support development of technologies for hydrogen production, storage, transport as well as its conversion back to electricity in fuel cells.

Professor Turhan Nejat Veziroğlu from Izmir was the first to promote hydrogen economy, back in 1974, and Dr. Frano Barbir from the University of Split still has a distinguished role in the segment. So there are smart people in the Balkans as well. That is why we call on enterprises and development institutions from the region to join in on hydrogen development.

For the Western Balkans, and especially Serbia – due to the country’s relatively strong metal processing sector – the opportunity could be the production of components for electrolyzers and fuel cells: from casting bipolar plates and polymer membranes to original equipment manufacturing (OEM).

What is the role of hydrogen production from renewable sources?

It is primarily used as a medium for energy storage. In many cases, it is easier and cheaper to store energy in the form of compressed gas than as electrons.

The issue with renewable hydrogen  – and with any other for that matter  – is that it is not an energy source. It has to be produced. However, the green hydrogen, made by electrolysis, faces two problems.

Companies and development institutions in Southeastern Europe should participate in the development of hydrogen technology – components and equipment can be manufactured in the region

If hydrogen is produced only during above-average renewables output, or when electricity consumption is low, then electrolyzers are active only during occasional, unpredictable and arbitrarily short intervals. Most of the time they are offline, waiting for the sun to shine. If capacity utilization is low, a relatively large number of electrolyzers must be installed. It requires significant capital expenditure and makes the production of such hydrogen even more expensive.

Conversely, if electrolyzers are active all the time, then the question is why power should be converted into hydrogen at all, only to be reverted back into electricity. The losses are significant.

For example, imagine a windmill supplying an electrolyzer with 1 kWh. The electrolyzer, with a 70% efficiency, can produce about 20 grams of hydrogen. Twenty grams of hydrogen has about 0.6 kWh of chemical energy (or Gibbs energy), and a fuel cell with an efficiency of about 50% would turn it into about 0.3 kWh of electricity.

In other words, after a substantial effort and expense we get one third of a kilowatt-hour from 1 kWh. This might make sense if hydrogen was used in place of liquid fuels for vehicles, but this is unlikely to happen in the foreseeable future.

Energy conversion from renewables to electrolyzers to fuel cells is currently either too expensive in most applications or makes no sense from thermodynamic perspective.

Green hydrogen profitable but investments technology

How is UNECE involved in the sector?

UNECE is one of the five regional commissions of the United Nations. It gathers 56 states in the northern hemisphere, from Vancouver to Vladivostok. Our main objective is to promote pan-European economic integration. Our work is more technical than political, and not especially interesting to the mainstream media. Yet, it is quite important.

For instance, we set standards for agricultural products – fresh fruit, vegetables, mushrooms, eggs, meat, even flowers… The standards enable international trade in the products. Our transportation division deals with standards for vehicles and equipment (safety belts, baby car seats, motorcycle helmets, lights, brakes).

This work covers many other things  – traffic signs, pan-European corridors, transportation of hazardous materials, driverless vehicles. We also have several conventions on air and water protection, prevention of industrial accidents etc. In energy, we are mostly active in resource classification and management, methane management, energy efficiency and renewable energy sources.

UNECE is very active in promoting hydrogen and hydrogen economy through its  Task Force on Hydrogen, within the Group of Experts on Gas. The Group of Experts on Renewable Energy is also involved.

The Western Balkan countries still didn’t produce their hydrogen economy strategies

Our work on synergies between renewable gases and renewable electricity is based on the assumption that gas infrastructure is and will be the backbone of the energy system. The general purpose of these activities is to increase the share of renewable and low-carbon gases in the energy balance.

In this sense, we offer assistance to member countries in the development of measures and regulations that remove obstacles to low-carbon projects. The activities are mainly aimed at promoting green and blue hydrogen.

UNECE could help Western Balkan countries in two ways.

The first is to develop a hydrogen strategy. Many European countries have already adopted them; the West Balkan countries have not. Among other things, a good hydrogen strategy could reduce the share of coal in the energy balance and cut greenhouse gas emissions.

Second, we plan to soon start a project for the sustainable production of both green and blue hydrogen. We will invite the countries in the region to join in. We hope the project would begin already in mid-2021. I invite all interested to contact us.

Zeleni vodonik ekonomski isplativ investicije razvoj tehnologija
The 2019 meeting of the UNECE Group of Experts on Gas. In 2020 the event was virtual.

Projects to add hydrogen to the natural gas network in a limited proportion are emerging even in Southeastern Europe. If the EU really intends to bring net emissions to zero by mid-century, it will have to drastically restrain the use of natural gas as it is a fossil fuel. Does it open the way for hydrogen and how much capacity can it replace? How much of the existing gas infrastructure can be used?

Certain technical issues aside, like hydrogen embrittlement, blending hydrogen into the gas network is possible and desirable. The question is in which percentage. Different countries, even those inside the EU, have different regulations about the allowed percentage of hydrogen in the gas mixture. The long transmission of mixtures of hydrogen and natural gas requires harmonized standards. Here UNECE can help.

Only 30% of the electricity stored in hydrogen can be recovered when renewables and fuel cells are used

If the EU indeed lowers the use of gas drastically – which I doubt – it is both good and bad news for hydrogen. The relationship between natural gas and hydrogen is like an average marriage, in the sense that it is complicated: sometimes they are competitors, but they are generally in love and they complement and help one another in the fight against liquid fuels and coal and even renewable sources.

How competitive is the hydrogen produced from fossil fuels if the growing expenses on greenhouse gas emissions are accounted for?

As for the production itself, hydrogen from fossil fuels is competitive. Actually, no cheaper exists. That is why 95% of hydrogen is produced from fossil fuels. The external and growing costs for emitting carbon dioxide and other greenhouse gases are still borne by someone else – you, me and everyone else.

There are also individual development projects for the utilization of hydrogen in heavy industry, for example in steelworks. Are there any other industries where the new fuel can be used?

In this case, hydrogen is not a fuel but a reducing agent that renders metal from its oxides. There are such possibilities in the production of cement and ammonia. Personally, I find the use of hydrogen in hard to decarbonize industries very interesting.

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