Some of the world’s largest energy companies have signed up to the UN Green Hydrogen Catapult to bring down the cost of hydrogen production.
The project aims to drive down the cost of hydrogen to $2/kg by 2026, approximately half its current price. The partner companies aim to do this with 25GW of green hydrogen production by 2026, approximately 50 times more than is currently produced.
The project cites a study by business group Hydrogen Council, which states that $2/kg represents a tipping point in hydrogen production. After this, increased use of hydrogen will allow markets to sustain a profitable hydrogen production industry.
The partners believe this rate of change will allow the hydrogen market to develop at the necessary pace to comply with Paris Agreement goals.
The companies involved include Danish winds turbine manufacturer Ørsted and Spanish power giant Iberdrola. Renewable energy developers Acwa Power, from Saudi Arabia, and CWP Renewables from Australia, will also take a leading role. Other proponents include Italian gas network Snam, chemical company Yara International, and Chinese wind turbine manufacturer Envision.
A press release by the partners says they will focus on work toward developing project capacity, tool development, solving early market challenges, and promoting collaboration. They estimate this will require $110bn of investment, generating 120,000 jobs. As such, the project comes as a suggested investment for recovery from Covid-19.
UN scheme pushes further than other hydrogen plans
The project is part of the UN Race to Zero, an initiative urging companies to commit to environmental action outside of governmental frameworks.
ACWA Power CEO Paddy Padmanathan said: “We believe the private sector can deliver green hydrogen at less than $2/kg within four years. From an industry perspective, we see no technical barriers to achieving this, so it’s time to get on with the virtuous cycle of cost reduction through scale-up.”
ACWA Power also committed to limiting its emissions in line with a 1.5°C scenario.
Snam CEO Marco Alverà said: “We believe that this new ‘coalition of the willing’ composed of leading companies in the private sector, with expertise, commitment and confidence in hydrogen’s potential, will play an important role in fostering cooperation and help to deliver the projects necessary to bring green hydrogen costs to the $2/kg tipping point even sooner than expected.”
Similar projects have recently started developing green hydrogen supply chains in Europe, Japan and Saudi Arabia. Also today, Norwegian state-owned energy giant Equinor joined the NortH2 project, which aims to develop a green hydrogen supply network around north-west Europe. The project, led by oil giant Shell, aims to produce one million tonnes of hydrogen using 10GW of offshore wind by 2030.