Demand, policies, investment key to green hydrogen development

Ruchi Gupta is a research fellow at the University of Geneva’s Institute for Environmental Sciences. She focuses on how flexibility options, such as sector coupling with hydrogen production, can support renewable energy integration and decarbonize a wide range of sectors.

June 16, 2021

pv magazine: Your research focuses on the different flexibility options to support the integration of renewable energy. How important is the development of green hydrogen for the energy transition?

Ruchi Gupta: Yes, my research focuses on different flexibility options such as energy storage technologies, grid reinforcement and sector coupling, among others, to support the integration of renewable energy and other low-carbon technologies. Renewable electricity allows the decarbonization of the power sector. However, the decarbonization of other hard-to-abate sectors, such as carbon-intensive industries and long-distance transport, still remains a big challenge. This is where sector coupling – i.e., production of green hydrogen through surplus renewable electricity by electrolysis – can play an important role in achieving the net-zero target.

You’re currently working on assessing the potential of green hydrogen in Switzerland using GIS. Can you talk more about the project?

The project on assessing the potential of green hydrogen in Switzerland is a collaborative project of the University of Geneva (UNIGE) and the Swiss Federal Laboratories for Materials Science and Technology (EMPA). In this project, we developed a detailed spatio-temporal assessment model to assess the techno-economic potential of power to gas plants (PtG) by evaluating their levelized cost of energy and value, considering their proximity to the different supply and demand centres. We also analyzed various deployment strategies and set cost improvement targets to inform investors, project developers and policymakers about optimal locations or hotspots for the placement of PtG plants.

What’s the biggest obstacle to green hydrogen development in Switzerland?

I think one of the biggest obstacles to green hydrogen development in Switzerland is the cost of solar and wind electricity, since solar installations are limited to rooftops (due to the high land costs) and wind energy faces limited public acceptance. The cost levels in Switzerland are in general higher compared to other countries due to the higher labour costs. For example, the total installation cost of residential PV in Switzerland is almost double compared to India. Other driving factors for the high costs of renewable energy in Switzerland are the long duration of proceedings as well as demanding requirements for the environmental impact assessment.

How do you see the green hydrogen economy currently? Will it be a case of countries like Saudi Arabia and Australia becoming export superpowers because of their solar advantage compared to countries in say, North-east Asia and Europe?

It is correct that countries like Saudi Arabia and Australia have a solar advantage, however, there are other issues that need to be addressed. One of them is transportation and storage as a fully-fledged hydrogen infrastructure is still lacking. Having said that, if the opportunities are timely seized, it will surely create new export opportunities for countries with rich renewable energy sources.

Axpo recently announced plans for a 2.5 MW hydrogen facility at the Eglisau-Glattfelden hydropower plant in Switzerland.

Image: Axpo

You were previously part of a team that contributed to India’s National Energy Policy – do you think India’s solar resources will make it a big player in the future green hydrogen economy?

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Yes, indeed. The price of the delivered power is the biggest driver of the cost of green hydrogen. The recent lowest bid of $ 0.027/kWh for solar and a competitive wind tariff gives India a competitive advantage to disrupt the green hydrogen economy. Considering India’s falling solar and wind electricity costs and increasing deployment targets of 450 GW by 2030, if the right and timely policies are adopted, India has the potential to become a net exporter of green hydrogen by 2030. India is also planning to promote local large-scale manufacturing of electrolyzers. As per Niti Aayog, domestic electrolyzers production and development of green hydrogen projects could create a new green technology market of around $18 billion to $20 billion in India along with domestic job creation.

What do you see as the biggest challenge to the development of green hydrogen?

I think the biggest challenge right now is the cost of green hydrogen, which is still not competitive compared to grey hydrogen. However, with the decreasing renewable electricity and electrolyzer costs, green hydrogen will reach par or even cheaper in the future.

One element I would like to emphasize is that we should not only assess the cost, but also the value generated by green hydrogen. For example, oxygen and heat produced as by-products from the process of electrolysis can be sold in the market to generate revenue. In addition, power-to-hydrogen systems can provide other stacked benefits such as frequency control, avoided CO2 taxes and the sale of surplus renewable electricity to the grid. The world is going to pay a premium for carbon free products and that will increase the value generated by green hydrogen. Off course in order to achieve that, we need to unlock demand, and that requires having the appropriate policies in place for market creation and a progressive and stable regulatory framework.

What do you see as the biggest opportunity of green hydrogen?

Until now, green hydrogen is not seen as a profitable investment due to its high production costs compared to grey hydrogen. However, decreasing cost of renewable electricity generation due to economies of scale, offers a unique opportunity for cost competitive green hydrogen production.

What’s next for green hydrogen?

I think exciting times are ahead as we will see something similar to what we saw in the case of solar PV, with dramatic cost reductions and vast deployment that outperformed all previous forecasts. In the coming years, we will also see the first large-scale green hydrogen production facilities entering into operation. Demand creation, right policies and timely investments will be the key for the successful development of a green hydrogen economy.

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