Green hydrogen is missing piece of the energy transition puzzle

Green hydrogen is missing piece of the energy transition puzzle

2 Sep 2020

The development of green hydrogen will grow at rapid pace in the coming years, and is expected to play a vital role in meeting global and domestic carbon reduction targets by 2050

Green hydrogen is increasingly being proclaimed as the missing piece of the puzzle for the energy transition, establishing a carbon-free alternative for processes in the industrial and transport sectors in addition to offering a solution for storing and transporting green electricity to areas that need it most.

The development of green hydrogen will grow at rapid pace in the coming years, and is expected to play a vital role in meeting global and domestic carbon reduction targets by 2050. In addition to providing a cleaner solution to traditionally carbon-intensive industries and transport sectors, the push for green hydrogen will accelerate the development of renewable energy – which has already hastened dramatically over the past five years as the cost of renewables has plummeted.

The push for green hydrogen has gained significant political momentum in 2020, with the EU drawing up an ambitious green hydrogen strategy for 2030, which is successful will result in hundreds of billions of Euros investment. Closer to home, the announcement in July that Saudi Arabia had signed up investors to deliver a $5bn green hydrogen facility at its futuristic Neom development.

Read more about the opportunities and challenges facing green hydrogen development in the Middle East in our special feature and interview with Manuel Kuehn, Head of New Energy for Middle East and Africa, Siemens Energy. Siemens is developing the region’s first solar-driven hydrogen electrolysis facility in Dubai.

While green hydrogen has quickly been gaining political traction, business momentum will take longer as the costs of integrating green hydrogen into industries are not yet cost effective. This is expected to change soon, however, with the IEA estimating that the cost of producing green hydrogen will fall by 30 per cent by 2030. As more technologies and competitors enter the market on the back of major political announcements, the price may fall further.

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