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Renewable H2 cost reduction on the path to carbon neutrality

-Anthresia McWashington 

The final day of Gulf Energy Information’s First Element Conference began with a keynote session focused on ramping up the transition to carbon neutrality with renewable hydrogen. Caroline Hillegeer, Chief Commercial Officer, Engie, shared how the company’s strategy of developing green hydrogen in favorable locations has driven production, and consequently, begun to lower costs.  

“In a project in the South of France, we have developed an industrial-scale green hydrogen facility to support the decarbonization of a refinery. We offered decarbonization solutions for the economy starting from the refinery, but also from mobility, and other end users, said Hillegeer. “We anticipate European and international connections thanks to the Port of Fos, and the future import and export possibilities. And, at the same time, in the ecosystem, we also created a hydrogen industrial safety center of expertise. it’s really a regional type of approach, building this ecosystem and creating value for the local territory, the industry and beyond.” 

Bridging the competitiveness gap between green hydrogen and grey hydrogen is one of the main challenges facing this approach, but Hillegeer said the company strongly believes that this gap is temporary, provided that present-day investments are made on a large scale, and that projects receive the necessary legislative, regulatory and financial support to allow this deployment. 

“Consensus of international experts such as the Hydrogen Council and the International Energy Agency announced that this gap and competitiveness could be eliminated as early as 2030, in certain occasions, even before, thanks to the reduction of the production cost of renewable electricity, as well as productivity gains that could be achieved on the technology partthanks to massification and eventually new technologies,” said Hillegeer. 

“In the last five years the CAPEX of the electrolyzer has fallen by 40-50%, mainly due to scale and improved production costs. What is really essential for this success is the synchronization of all efforts.” 

Teaming up with local players in the development of renewable hydrogen at other favorable sites, a model similar to the one Engie has implemented at its South France site, is a key step on the path to green hydrogen cost reduction. Hillegeer added that growing demand for green hydrogen in sectors such as ammonia production, chemicals, mining, maritime and chemicals will also lead to hydrogen price optimization.  

Register for First Element to access this and other presentations covering the hydrogen sector on-demand! 

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Editorial Comment
-Adrienne Blume
Worldwide, small-scale LNG liquefaction capacity is expected to expand by 30% over the next 4 yr, increasing from 33.9 MMtpy in 2021 to 43.92 MMtpy in 2025.
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