The year of hydrogen has exceeded expectations and it’s far from over

At the beginning of 2022, we predicted a stellar 12 months ahead for hydrogen but few could have foreseen the exponential pace of developments in the sector we have witnessed in the first 8 months of the year.

Accelerated by Russia’s invasion of Ukraine and the subsequent surge in energy prices, countries and companies across the world have brought forward plans to produce, store, transport and consume clean hydrogen.

Green hydrogen has been cheaper than liquefied natural gas delivered by tanker in much of Europe this year, providing a clear signal to hydrogen investors.

The northern hemisphere is also rapidly waking up to the realities of climate change after heatwaves and droughts ripped across Europe and North America this summer, bolstering the case for increased investment in hydrogen.

Research continues to point to rapidly declining costs for producing hydrogen. Economies of scale will help push down the price of hydrogen electrolysers to $340/kW by 2030 from $1,400/kW today, according to a recent report from Rethink Energy.

More than 100GW of electrolysers will be produced every year by the end of the decade, contributing to an average global price for green hydrogen of $1.50/kg, compared with about $6/kg today.

Costs are also being reduced by landmark legislation on both sides of the Atlantic. In April, the UK government doubled its low carbon hydrogen production target to 10GW from 5GW and launched the Hydrogen Business Model, the world’s first subsidy scheme for green hydrogen production, clearing the way for billions of pounds of investment in the country’s hydrogen economy.

In the U.S. last month, President Biden passed the Inflation Reduction Act, providing $369 billion for energy and climate projects, including a subsidy of as much as $3/kg for clean hydrogen.

We even saw the launch of The Hydrogen Show, a brand new multi-platform series accelerating growth of the hydrogen economy with the latest hydrogen sector news.

Hydrogen production

New hydrogen production projects announced this year so far include the massive 60GW Hydrogen City project in Texas that will produce clean rocket fuel for Elon Musk’s SpaceX, and the deal by Abu Dhabi’s Masdar to develop clean energy projects including integrated offshore wind and green hydrogen projects with a capacity of 2,000 MW in Azerbaijan.

In July, Shell reached a final investment decision to build Holland Hydrogen 1, a 200MW green hydrogen plant that will be the biggest of its kind in Europe when operational in 2025. In the UK, new clean hydrogen projects announced this year include a €170 million plant being built by Iberdrola in the UK’s largest port, Felixstowe.

This year has also seen a flurry of hydrogen hub announcements across the UK, including a Hydrogen Ecosystem, which was unveiled by the GW4 Alliance of leading universities in the UK’s southwest, and Western Gateway, a grouping of regional government and enterprise bodies focused on net zero delivery.

Soon after, proposals for a 35MW commercial hydrogen hub, located on industrial-zoned land in Barrow-in-Furness, were launched by a public-private partnership involving Carlton Power, Cumbria Local Enterprise Partnership, Barrow Borough Council, Cadent, and Electricity North West.

This summer, the UK government also revealed the 20 shortlisted projects from Hynet and East Coast Cluster that were chosen for funding last year. Hydrogen production projects including bpH2Teesside, H2NorthEast, Hydrogen to Humber (H2H) Saltend and HyNet Hydrogen Production Project (HPP) will all proceed to the due diligence stage of the Phase-2 Cluster Sequencing process.

In Scotland, the award in August of seabed rights for a 2.8GW floating wind farm off Shetland that will be focused on hydrogen represents a huge step forward for the industry.

It’s not all new announcements either; projects are starting to come online, including an 800kW green hydrogen facility in Hazira, Gujarat, being built by Larsen & Toubro.

Hydrogen transport

One of the big advantages of green hydrogen is that it can be produced anywhere with a supply of renewable energy and an electrolyser, but there will be a need for some large consumers, particularly in Europe, to import the clean fuel as well to meet demand.

Germany has been at the forefront of efforts to secure foreign supply of clean hydrogen and it again showed its ambition last month as Chancellor Olaf Scholz signed a five-year agreement to begin imports of hydrogen produced from renewable energy in Canada.

German companies have also signed agreements with entities in Australia, Chile, the UAE and India this year to explore imports of clean hydrogen using a variety of technologies, including Liquid Organic Hydrogen Carriers (LOHC) and ammonia.

Projects to move clean hydrogen via pipelines are also in development, with plans to connect Norway and Denmark to Germany currently the most advanced.

Hydrogen vehicles

In August, Amazon put clean hydrogen on the front pages with an agreement to buy nearly 11,000 tons of green hydrogen a year from Plug Power from 2025 to fuel forklifts and heavy-duty trucks.

That deal was yet another boost for hydrogen as a transport fuel. In August, Hyundai that it had signed a deal with the German government and seven companies to deliver 27 of its XCIENT Fuel Cell trucks, while Daimler Trucks announced that it is testing the use of liquid hydrogen in its Mercedes-Benz GenH2 Truck with the aim of extending the range of the vehicles to 1,000 km (621 miles) and beyond.

Hydrogen is also rapidly becoming the solution of choice for decarbonising plant machinery, as some of the biggest players in the sector, including JCB and Volvo Construction Equipment as well as miners such as Anglo American made public machines that run on the clean fuel.

The potential of hydrogen to dominate the bus market was again on show in June when Wrightbus announced a deal to supply German operator RVK with 60 hydrogen buses over the coming two years.

Consumer vehicle brands are also betting on a hydrogen future. In August, BMW Group CEO Oliver Zipse said its future Neue Klasse EV platform may include fuel cell power trains with vehicles based on the technology hitting the market in 2025.

Toyota, the world’s biggest car company, released a new version of its Mirai hydrogen vehicle earlier this year equipped with a system that actually purifies the air around it rather than making it dirtier. Unlike battery-electric vehicles, the Mirai can be refuelled with 350 miles or more of range in less than 5 minutes.

Motorsport is increasingly looking to hydrogen combustion engines to fuel the next generation of racing cars, keeping the romance associated with the sport while eliminating the emissions. Toyota debuted the GR Yaris H2 outside of Japan at the Ypres Rally in Belgium in August, while Porsche said it had developed a V8 hydrogen combustion engine that aims to match the power and torque of current high-performance gasoline engines.

Industrial hydrogen

Even more important in the race to decarbonise the global economy, have been developments in the use of hydrogen in industry.

BMW signed a contract last month with Sweden’s H2 Green Steel to buy its hydrogen-produced steel. One of India’s biggest companies, Reliance Industries, said it will build 20 GW of solar energy capacity as it seeks to transition its entire grey hydrogen production to green by 2025.

Closer to home, a consortium of European iron and steel producers, GravitHy, made up of EIT InnoEnergy, Engie New Ventures, Plug, FORVIA and GROUPE IDEC, said it planned to invest €2.2 billion to produce 2 million tonnes of hydrogen-powered ‘direct reduced iron’ annually from 2027.

Other industries are getting in on the action too. Recent weeks have seen deals signed by the likes of Kleenex and Andrex maker Kimberly-Clark, which will buy green hydrogen from Carlton Power for its factory in Barrow-in-Furness in Cumbria, and Scotland’s Arbikie Distillery, which has been awarded planning permission for a 1MW wind turbine to make green hydrogen to fuel its operations.

The UK was home to another major milestone in the decarbonisation of the industrial economy in July after British company Tarmac led a project to produce industrial lime with clean hydrogen.

This is only a snapshot of what has been achieved by the pioneers driving the hydrogen economy in the first 8 months of the year. The final third of 2022 will be packed with even more developments which we will share with you in December.

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