Energy markets were already strained after post-covid hunger for hydrocarbons. Production struggled to meet demand, a summer without wind in much of northern Europe meant turbines were inactive, and cold conditions in late 2021 only heaped pressure on supply. In Europe alone, coal power rose 18% last year, its first increase in almost a decade.
And then war came to Ukraine, along with a sanctions regime that has further compromised the energy system. But there is now widespread acknowledgement that the urgency to reduce dependency on fossil fuels is about much more than minimizing climate change. It is also now a matter of regional security.
An increasingly important part of achieving these crucial goals is green hydrogen. Nel’s new factory at Herøya, the world’s first fully automated electrolyser production line, marks a fundamental shift in the company’s 90-year history in the electrolyser business.
The Herøya facility can produce 500MW of electrolyser capacity each year; this could be quadrupled with further investment. Key to the automation process are two manufacturing innovations in particular. “A new cleaning technology removes the need for sandblasting, and the final assembly stage on the production line improves both the speed and safety of operations,” says Ragnar Johnsson, Herøya plant director.
The new factory’s efficiency means Nel’s technology takes a big step towards producing electrolysers that generate green hydrogen at a cost matching that of conventional hydrogen production using natural gas.
Competitively priced green hydrogen relies on a ready supply of renewable energy, and countries blessed with plentiful hydropower, wind or solar resources must increase their efforts to expand generating capacity. Norway, for example, has arguably Europe’s best offshore wind resources, but current plans for new capacity – not even 10 GWh by the end of this decade – fall way short of the hundreds of GWh available for capture from turbines operating on Norway´s continental shelf.
Hydrogen is an important industrial gas, used primarily to produce chemical products such as plastics and fertilisers. Global demand for the gas is already around 70 million tonnes each year. But it is also becoming an increasingly important fuel for transport, domestic and industrial heating, and a means of power storage.
Transport for London is running 20 hydrogen buses that employ Nel’s fuel systems, and Nikola recently drove a truck featuring Nel technology from Arizona to California on a single tank of hydrogen. JCB, a British manufacturer of plant machinery, has invested £100m ($130m) in the development of hydrogen combustion engines. The company has also signed a multi-billion-dollar deal for future green-hydrogen fuel.
The current squeeze on commodities is strangling the production of electric vehicles, with one manufacturer cutting its output forecasts for this year by 50%. Particularly affected by supply-chain problems are batteries, which are of course an integral part of electric vehicles. But batteries have also been viewed as an essential addition to power grids, to help ensure consistent and stable power supply.
These factors suggest that green hydrogen will gain yet more interest in both the political and business communities: electrolysers can be installed more or less anywhere. When powered by renewable energy, they produce green hydrogen for fuel or energy storage.
Competitive green-hydrogen production is no longer a possibility. It is a reality, and with the right investment and policy incentives, it can effect rapid transformation for the long-term and sustainable supply of Europe´s energy and industrial needs.