Wind turbine manufacturer Siemens Gamesa sees green hydrogen produced from wind generation as becoming competitive to the fossil-fueled variant within a decade, according to a white paper released today.
Green hydrogen will be critical to powering hard-to-electrify sectors of the economy, such as the manufacture of iron, steel, cement, and heavy duty transport including aviation and maritime, Siemens Gamesa said in the report. Linking hydrogen generation to wind or other renewables accomplishes the goal of removing carbon emissions.
The good news is that Siemens Gamesa’s 10-year target to viable fossil fuel parity appears to be shared among other parties interested in its deployment. So there’s agreement, or at least similar thinking, on the steps to develop wind-based hydrogen in terms of technology, scale, transport and supply/demand.
Marco Alvera, CEO of Snam, Europe’s largest natural gas pipeline network, outlined a similar timeline on renewables-powered hydrogen production. Alvera believes costs could be halved over the next five years and then halved again over the following five to seven years to reach parity with coal generation.
The more concerning news is that industry leaders are also saying that it will take a decade before green hydrogen becomes competitive. According to Siemens Gamesa’s report, what took renewable energy three decades – reaching competitive parity – needs to happen in one decade with green hydrogen.
A lot of things must take place simultaneously to achieve that kind of pace of progress. Nations need to simplify and promote legislation and permitting for renewables projects. This is to say that onshore and offshore wind development itself needs a development fast track. Likewise, hydrogen needs to see scale and technology gains in electrolyser production to bring down costs.
In 2019, global hydrogen demand was 75 million tonnes, accounting for six percent of global natural gas consumption and two percent of coal consumption, according to the Siemens paper. Demand for hydrogen in hard-to-electrify sectors is expected to increase by seven percent per year until 2050.
Siemens Gamesa is currently experimenting with electrolysers and batteries linked to offshore wind production in so-called “island mode.” This means production is separated from the grid and to some degree freed from its capacity constraints and requirements. Generators can simply seek the best wind spots.
In any case, it’s a steep climb for targets of scale just in renewables, as the world needs to install new capacities greater than what is currently in place. Then comes scale and specifics in green hydrogen.
Like other major energy companies, Siemens Gamesa has a vision, some projects and a path. And the renewables industry has in recent years surprised with a greater than expected pace of change. That said, the scale of transformation remains enormous, with many moving parts along the road to implementation.
