BAKU, Azerbaijan, April 6. Hydrogen is one of the important pillar in securing both Europe’s energy independence and the sustainability of its energy mix, but its main challenge is affordability, Trend reports with reference to DNV GL.
The company notes that there are signals from Germany that the energy crisis is reducing the opposition towards blue hydrogen.
“However, when Europe is in dire need of gas to replace the phase-out of Russian gas, it is unlikely that significant amounts of surplus natural gas will be available for producing blue hydrogen. Furthermore, gas prices are high, and that makes blue hydrogen, with its additional carbon sequestration and storage costs, less competitive. Even if blue hydrogen remains cheaper than green hydrogen (produced from renewables by electrolysis) for the next few years, we find blue hydrogen uptake low in Europe towards 2030 and decreasing rather than increasing as a consequence of the war,” DNV GL said in its latest report.
The company analysts point out that Europe has limited capacity for producing sufficient renewable electricity to simultaneously phase out fossil fuels from the power mix and produce meaningful amounts of green hydrogen.
“Nevertheless, policymakers continue to prioritize both objectives. Consequently, we anticipate higher support for green hydrogen as part of the new push for renewables and have factored a 12 percent lower hydrogen price into our model, compared with our base case for 2030. In spite of increased support, green hydrogen use in Europe will remain modest by 2030, albeit 25 percent higher compared with our pre-war model output,” the report says.
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