Green hydrogen is emerging as a powerful solution in the fight against climate change, with the potential to decarbonise key industries worldwide, including in New Zealand. Produced by electrolysis using renewable energy, green hydrogen (GH2) generates significantly lower greenhouse gas emissions compared to grey hydrogen, which is derived from fossil fuels without carbon capture. However, the road to widespread adoption is fraught with challenges, particularly in cost and infrastructure.
The Role of Green Hydrogen in Decarbonisation
The primary aim of green hydrogen is to help limit global warming to 1.5°C by reducing reliance on fossil fuels and replacing grey hydrogen, particularly in sectors that are hard to decarbonise through electrification alone. These include heavy industries such as steelmaking, cement, glass production, and long-haul transport like shipping and aviation. Green hydrogen can also be vital for long-term energy storage, an essential feature in balancing intermittent renewable power sources like wind and solar.
The versatility of green hydrogen makes it a potential game changer, offering high energy density and the ability to produce the intense heat required for industrial processes. However, as of 2021, green hydrogen accounted for less than 0.04% of total hydrogen production, a small fraction due to its current high cost relative to hydrogen from fossil fuels.
Cost Challenges
One of the biggest obstacles to the widespread adoption of green hydrogen is its cost. Historically, hydrogen produced via electrolysis powered by renewable sources like solar energy has been prohibitively expensive—up to 25 times the cost of hydrogen from hydrocarbons in 2018. By 2024, this cost disadvantage had decreased significantly, but it still remains roughly three times higher. The industry regards $2 per kilogram as a crucial tipping point, where green hydrogen could become competitive with grey hydrogen. As of now, scaling up production and improving efficiency are key to reducing these costs further.
The cost of electrolysers, which are essential for green hydrogen production, fell by 60% between 2010 and 2022, and further reductions are expected. This, coupled with falling renewable energy costs, is likely to drive down the price of green hydrogen significantly by 2030 and 2050.
Industrial Applications
In industrial processes, green hydrogen can replace coal as a low-carbon catalyst, especially in steel production, which currently accounts for around 8% of global greenhouse gas emissions. Hydrogen-based steelmaking is already being tested at scale, with renewable electricity providing both heat and hydrogen to decarbonise the process.
Other applications include the production of green ammonia and synthetic fuels, which are essential for decarbonising industries like fertiliser manufacturing and methanol production. In sectors such as shipping and aviation, hydrogen-derived fuels could play a crucial role in reducing emissions, although alternative solutions like electrification or biofuels may still be more suitable in some areas.
Hydrogen as Energy Storage
Green hydrogen is also seen as a potential solution for long-term energy storage, especially in New Zealand, where solar energy is abundant in summer but less so in winter. Hydrogen could be stored in various forms, from gas tankers to underground reservoirs, although challenges remain, such as the material requirements for storing hydrogen at such large scales and the potential for leakage.
New Zealand researchers have explored the possibility of using hydrogen for seasonal energy storage, moving surplus summer energy to cover winter demand. However, using hydrogen for this purpose will require substantial investment in infrastructure, including the development of underground storage solutions.
Exporting Green Hydrogen
New Zealand's hydrogen strategy also includes plans for exporting hydrogen, but this presents additional logistical challenges. Transporting hydrogen is notoriously difficult due to its low energy density in gas form, and technologies such as cryogenic liquefaction or ammonia conversion are being explored. While ammonia is easier to transport and has lower energy losses than liquid hydrogen, other methods, such as e-methanol, are also gaining traction due to their modularity and the ease with which they can be stored and shipped.
Future Prospects
To meet its hydrogen goals, New Zealand would need to triple its current renewable energy capacity and build an additional 10 GW of electrolyser capacity. While the country has significant potential in renewable energy, particularly in wind and solar, these infrastructure investments will require considerable time and resources.
Globally, hydrogen demand is expected to grow rapidly, with green hydrogen forecasts ranging from 100 megatonnes per year today to as much as 700 megatonnes per year by 2050. For New Zealand, this could mean a domestic hydrogen demand of around 1 million tonnes per year, primarily for sectors where hydrogen is the only feasible option for decarbonisation, such as fertiliser production and shipping.
Conclusion
Green hydrogen has the potential to revolutionise industries in New Zealand and globally by decarbonising sectors that are otherwise difficult to electrify. However, its adoption is still in the early stages, with high costs, infrastructure requirements, and technological hurdles to overcome. While the future of green hydrogen looks promising, especially as costs continue to decline, there is still a long way to go before it becomes a widespread solution for decarbonisation. Success will depend on a combination of innovation, policy support, and significant investment in renewable energy infrastructure.
Article information source: The Conversation - Green hydrogen could decarbonise entire industries in NZ – but there’s a long way to go
Article information source: Wikipedia - Green hydrogen
