By IMED Derouiche
Hydrogen, often touted as the fuel of the future for a decarbonized world, faces significant economic challenges. Despite ambitious global targets and substantial investments, the cost of producing green hydrogen remains a major barrier to its widespread adoption. As the energy sector moves forward, a crucial question emerges: Is green hydrogen at a crossroads? This article explores the difficulties in reducing hydrogen prices, briefly touches on emerging technologies, and appeals to countries like Morocco, the UAE, and others with significant geological potential, which could reshape the future of the hydrogen market.
The DOE’s 1 1 1 Strategy: An Ambitious but Elusive Goal
The U.S. Department of Energy’s (DOE) Hydrogen Shot initiative, also known as the “1 1 1 strategy”, aims to reduce the cost of green hydrogen to $1 per kilogram within the next decade. This ambitious target seeks to make hydrogen cost-competitive with fossil fuels and accelerate its adoption across industries. However, the goal remains challenging, with current costs for green hydrogen still between $3 and $8 per kilogram, mainly due to the high capital expenditure (CapEx) and operational expenses associated with electrolysers.
Achieving the $1/kg target is complicated by the high costs and technical limitations of current electrolyser technologies, including alkaline and PEM (Proton Exchange Membrane) systems. Electrolysers cost between $600 and $1,000 per kilowatt of capacity, and while scaling
up production might drive down costs, this process takes time. As a result, reaching the DOE’s $1/kg objective may not be feasible in the short term.
Green Hydrogen’s Price Challenge: Electrolyser Technology Limitations
At the core of the cost issue for green hydrogen is the technology of electrolysis. Despite ongoing advancements, electrolysers remain expensive and inefficient. Electricity, which constitutes up to 70% of green hydrogen’s production costs, is heavily influenced by the availability and price of renewable energy sources. Even in regions with ample renewable resources, the pathway to $1 hydrogen remains complex without transformative innovations in electrolyser efficiency and production scale.
Emerging Alternatives and New Technologies
While green hydrogen remains a focus, there are other technologies gaining attention. An Indian startup has developed a technology that claims to produce low-carbon hydrogen close to the $1 per kilogram mark. The details of this method are not publicly disclosed, but its emergence signals that new approaches might challenge the dominance of traditional electrolysis, providing potentially cheaper and more efficient solutions.
An Appeal to Countries with White Hydrogen Potential
As the green hydrogen sector encounters obstacles, an alternative opportunity arises: white hydrogen, or geological hydrogen. This naturally occurring hydrogen, found in underground geological formations, offers a promising and potentially low-cost alternative. Extraction of white hydrogen could be far cheaper than producing green hydrogen through electrolysis, making it a game-changer for nations with such reserves.
Countries like Morocco and the UAE are particularly well-positioned due to their geological landscapes that might harbor substantial white hydrogen deposits. Additionally, other nations such as Oman, Turkey, France, Spain, and Saudi Arabia (KSA) are exploring this potential. These countries have a strategic opportunity to assess whether investing in white hydrogen could provide an economic edge and reshape their energy strategies.
The question for these nations is critical: Will they shift focus from green hydrogen to develop their white hydrogen resources? What implications would such a shift have on their future energy landscapes? This decision could not only influence their domestic markets but also alter the trajectory of global hydrogen development, as white hydrogen could potentially offer a lower-cost, zero-emission alternative.
The Future of Green Hydrogen: Navigating a Crossroads
The global hydrogen market stands at a pivotal point. As new technologies and methods for hydrogen production emerge, green hydrogen faces competition from alternative approaches such as geological hydrogen. Countries with white hydrogen potential must carefully evaluate the benefits and challenges associated with exploiting these resources.
Adapt or Diversify?
If green hydrogen is to maintain its position in the energy transition, several actions must be prioritized:
Technological Innovation: Investment in R&D for next-generation electrolysers must continue to improve efficiency and reduce costs.
Government Support: Regulatory incentives, carbon credits, and subsidies will be crucial in making green hydrogen economically viable.
Exploring Geological Hydrogen: Countries like Morocco, the UAE, and others with geological hydrogen reserves should explore the economic feasibility of extracting white hydrogen as either a complementary or alternative energy source.
Hydrogen remains a vital element of the global energy transition, but the path forward is increasingly complex. With high costs and the rise of alternative technologies, green hydrogen finds itself at a crossroads. Countries such as Morocco, the UAE, Oman, Turkey, France, Spain, and Saudi Arabia possess significant white hydrogen potential and must consider whether to continue pursuing green hydrogen or pivot towards geological resources. The decisions made by these nations will shape not only their domestic energy futures but also the evolution of hydrogen markets globally. The industry’s ability to innovate, adapt, and embrace new solutions will ultimately determine whether hydrogen can truly become the fuel of the future.
IMED Derouiche, CEO, H2G Green Hydrogen, spearheads innovative projects on sustainable hydrogen production and transport, combining his expertise in traditional and renewable energy to advance the global shift towards cleaner energy solutions.
