Green hydrogen, a clean energy source made from water and renewable power, could become competitive in a decade, according to French utility Engie.
That relies on Europe setting up the necessary regulatory framework to drive up demand and slash costs, Sebastien Arbola, the company’s head of thermal generation and energy supply, said Tuesday in Paris. The “tipping point” for renewable hydrogen to compete with gray hydrogen -- which is made from methane and emits carbon -- could be in 2030-2035, he said.
A number of countries in Europe are preparing vast subsidies to help companies scale up output of clean hydrogen, seen as key to cutting emissions from transport and industries such as refining and steelmaking. The recent surge in power and gas prices has prompted calls for more diversified energy sources, but green hydrogen production remains expensive, and the global market tiny.
In France, hydrogen made with renewable power costs 6 to 10 euros ($6.82 to $11.37) a kilogram, compared with about 1.50 euros for gray hydrogen, Arbola said. “As we think the price of carbon dioxide and of methane will climb, curves will cross.”
To boost demand for green hydrogen, European nations should subsidize its consumption with so-called contracts for difference, according to the executive. The European Commission could also loosen some rules on state aid that constrain the production of electrolyzers -- used to make the fuel -- he said.
Engie is working on about 70 hydrogen projects worldwide, with some pilot sites already under construction in countries such as France, South Africa and Australia. The utility aims to have about 4 gigawatts of electrolyzers globally by 2030, and more than 100 hydrogen service stations -- mostly in France. It’s also seeking to develop pipeline and storage infrastructure for the fuel.