Green Hydrogen: A new frontier for wind?

It’s tempting to think green hydrogen’s time has come.

Ben Cook
January 21, 2021
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This content is from our archive. Some formatting or links may be broken.
Green Hydrogen: A new frontier for wind?

It’s tempting to think green hydrogen’s time has come.

Policymakers are clearly on board. The last 12 months saw a raft of hydrogen strategies published, not only by the European Union, but also by a number of individual countries, including Germany, Canada and Scotland.

Unfortunately, political will is not enough. As participants in our recent Wind Investment Boardroom roundtable on green hydrogen were keen to highlight, policymaking will amount to little unless there is funding to back it up. It's also critical that the distribution of the funding is effectively targeted.

In addition, our speakers discussed how wind companies would need to adapt their strategies. You can download an extended report on the discussion here.

Electricity price hampers efforts

In order to successfully grow the green hydrogen sector, the primary goal must be bringing down the cost of production so that it is on a par with fossil fuels.

This is because the cost of electricity is a major stumbling block when it comes to efficiently producing green hydrogen.

As a result, green hydrogen producers can struggle to compete with those that produce blue and grey hydrogen at a fraction of the price.

One of our expert speakers summed it up thus: “The price of electricity and how it impacts on hydrogen is a challenge – in order to ensure large quantities of hydrogen is produced, government intervention will be needed as the price needs to be addressed.”

That said, despite concerns about high electricity costs, it’s important that wind power companies are alive to a significant opportunity here. Indeed, wind businesses are asking themselves whether they want to expand their operations by entering the green hydrogen production industry.

What’s the best way for companies to approach this?

In order to ensure the business case for producing green hydrogen stacks up for wind companies, it’s important that they are: first, onshore wind businesses as it’s not really a viable proposition for offshore wind at present; and second, involved in the solar market too, as wind farms and solar farms have different production profiles. This provides a greater diversity of sources that operators can use to power their electrolysers.

In addition, a first-rate cost-benefit analysis will look at how much hydrogen can wind farms produce and for which uses. With regard to the issue of end users, the smart thinking is that the mobility sector should be the primary target market at this point.

Produce more wind, more cheaply

However, there are challenges.

One of the biggest is that, for wind power companies to get involved in the production of green hydrogen, the need to produce “more wind power more cheaply”, according to James Pay, partner at Clifford Chance and head of the firm’s global renewables group and co-head of the firm’s mining and metals group. He added that, initially, the biggest opportunities would be found in areas such as transportation hubs, data centres and industrial hubs.

There is a widespread belief that 2020 was a ‘breakthrough’ year for green hydrogen. The aforementioned EU Hydrogen Strategy sets a green hydrogen (or ‘clean hydrogen’) target of 6GW of electrolysers installed by 2024, which would be a huge increase on the approximately 250MW that were in place globally at the time of the publication of the strategy in summer 2020.

The strategy also serves a number of other purposes.

In addition to the obvious objective of furthering the case for green hydrogen, the strategy also, at a time of Covid-induced economic strife, sets a framework for meeting the need for large-scale investment to kick-start the economy.

Indeed, there is a view that Covid-19 may have actually strengthened the case for large-scale Europe-wide investment in green hydrogen. This is because of the growing need for green economic recovery following widespread action to raise awareness of the climate crisis in 2019.

So there is clearly an opportunity for wind power companies to move into the world of hydrogen but, to capitalise on this opportunity, these firms will need support. Funding is urgently required to help industrialise and commercialise this new sector, and thus slash the price of producing green hydrogen.

If wind gets that, we could be on the verge of a green hydrogen revolution.

The full-length Green Hydrogen report is now available to A Word About Wind members.

It’s tempting to think green hydrogen’s time has come.

Policymakers are clearly on board. The last 12 months saw a raft of hydrogen strategies published, not only by the European Union, but also by a number of individual countries, including Germany, Canada and Scotland.

Unfortunately, political will is not enough. As participants in our recent Wind Investment Boardroom roundtable on green hydrogen were keen to highlight, policymaking will amount to little unless there is funding to back it up. It's also critical that the distribution of the funding is effectively targeted.

In addition, our speakers discussed how wind companies would need to adapt their strategies. You can download an extended report on the discussion here.

Electricity price hampers efforts

In order to successfully grow the green hydrogen sector, the primary goal must be bringing down the cost of production so that it is on a par with fossil fuels.

This is because the cost of electricity is a major stumbling block when it comes to efficiently producing green hydrogen.

As a result, green hydrogen producers can struggle to compete with those that produce blue and grey hydrogen at a fraction of the price.

One of our expert speakers summed it up thus: “The price of electricity and how it impacts on hydrogen is a challenge – in order to ensure large quantities of hydrogen is produced, government intervention will be needed as the price needs to be addressed.”

That said, despite concerns about high electricity costs, it’s important that wind power companies are alive to a significant opportunity here. Indeed, wind businesses are asking themselves whether they want to expand their operations by entering the green hydrogen production industry.

What’s the best way for companies to approach this?

In order to ensure the business case for producing green hydrogen stacks up for wind companies, it’s important that they are: first, onshore wind businesses as it’s not really a viable proposition for offshore wind at present; and second, involved in the solar market too, as wind farms and solar farms have different production profiles. This provides a greater diversity of sources that operators can use to power their electrolysers.

In addition, a first-rate cost-benefit analysis will look at how much hydrogen can wind farms produce and for which uses. With regard to the issue of end users, the smart thinking is that the mobility sector should be the primary target market at this point.

Produce more wind, more cheaply

However, there are challenges.

One of the biggest is that, for wind power companies to get involved in the production of green hydrogen, the need to produce “more wind power more cheaply”, according to James Pay, partner at Clifford Chance and head of the firm’s global renewables group and co-head of the firm’s mining and metals group. He added that, initially, the biggest opportunities would be found in areas such as transportation hubs, data centres and industrial hubs.

There is a widespread belief that 2020 was a ‘breakthrough’ year for green hydrogen. The aforementioned EU Hydrogen Strategy sets a green hydrogen (or ‘clean hydrogen’) target of 6GW of electrolysers installed by 2024, which would be a huge increase on the approximately 250MW that were in place globally at the time of the publication of the strategy in summer 2020.

The strategy also serves a number of other purposes.

In addition to the obvious objective of furthering the case for green hydrogen, the strategy also, at a time of Covid-induced economic strife, sets a framework for meeting the need for large-scale investment to kick-start the economy.

Indeed, there is a view that Covid-19 may have actually strengthened the case for large-scale Europe-wide investment in green hydrogen. This is because of the growing need for green economic recovery following widespread action to raise awareness of the climate crisis in 2019.

So there is clearly an opportunity for wind power companies to move into the world of hydrogen but, to capitalise on this opportunity, these firms will need support. Funding is urgently required to help industrialise and commercialise this new sector, and thus slash the price of producing green hydrogen.

If wind gets that, we could be on the verge of a green hydrogen revolution.

The full-length Green Hydrogen report is now available to A Word About Wind members.

It’s tempting to think green hydrogen’s time has come.

Policymakers are clearly on board. The last 12 months saw a raft of hydrogen strategies published, not only by the European Union, but also by a number of individual countries, including Germany, Canada and Scotland.

Unfortunately, political will is not enough. As participants in our recent Wind Investment Boardroom roundtable on green hydrogen were keen to highlight, policymaking will amount to little unless there is funding to back it up. It's also critical that the distribution of the funding is effectively targeted.

In addition, our speakers discussed how wind companies would need to adapt their strategies. You can download an extended report on the discussion here.

Electricity price hampers efforts

In order to successfully grow the green hydrogen sector, the primary goal must be bringing down the cost of production so that it is on a par with fossil fuels.

This is because the cost of electricity is a major stumbling block when it comes to efficiently producing green hydrogen.

As a result, green hydrogen producers can struggle to compete with those that produce blue and grey hydrogen at a fraction of the price.

One of our expert speakers summed it up thus: “The price of electricity and how it impacts on hydrogen is a challenge – in order to ensure large quantities of hydrogen is produced, government intervention will be needed as the price needs to be addressed.”

That said, despite concerns about high electricity costs, it’s important that wind power companies are alive to a significant opportunity here. Indeed, wind businesses are asking themselves whether they want to expand their operations by entering the green hydrogen production industry.

What’s the best way for companies to approach this?

In order to ensure the business case for producing green hydrogen stacks up for wind companies, it’s important that they are: first, onshore wind businesses as it’s not really a viable proposition for offshore wind at present; and second, involved in the solar market too, as wind farms and solar farms have different production profiles. This provides a greater diversity of sources that operators can use to power their electrolysers.

In addition, a first-rate cost-benefit analysis will look at how much hydrogen can wind farms produce and for which uses. With regard to the issue of end users, the smart thinking is that the mobility sector should be the primary target market at this point.

Produce more wind, more cheaply

However, there are challenges.

One of the biggest is that, for wind power companies to get involved in the production of green hydrogen, the need to produce “more wind power more cheaply”, according to James Pay, partner at Clifford Chance and head of the firm’s global renewables group and co-head of the firm’s mining and metals group. He added that, initially, the biggest opportunities would be found in areas such as transportation hubs, data centres and industrial hubs.

There is a widespread belief that 2020 was a ‘breakthrough’ year for green hydrogen. The aforementioned EU Hydrogen Strategy sets a green hydrogen (or ‘clean hydrogen’) target of 6GW of electrolysers installed by 2024, which would be a huge increase on the approximately 250MW that were in place globally at the time of the publication of the strategy in summer 2020.

The strategy also serves a number of other purposes.

In addition to the obvious objective of furthering the case for green hydrogen, the strategy also, at a time of Covid-induced economic strife, sets a framework for meeting the need for large-scale investment to kick-start the economy.

Indeed, there is a view that Covid-19 may have actually strengthened the case for large-scale Europe-wide investment in green hydrogen. This is because of the growing need for green economic recovery following widespread action to raise awareness of the climate crisis in 2019.

So there is clearly an opportunity for wind power companies to move into the world of hydrogen but, to capitalise on this opportunity, these firms will need support. Funding is urgently required to help industrialise and commercialise this new sector, and thus slash the price of producing green hydrogen.

If wind gets that, we could be on the verge of a green hydrogen revolution.

The full-length Green Hydrogen report is now available to A Word About Wind members.

It’s tempting to think green hydrogen’s time has come.

Policymakers are clearly on board. The last 12 months saw a raft of hydrogen strategies published, not only by the European Union, but also by a number of individual countries, including Germany, Canada and Scotland.

Unfortunately, political will is not enough. As participants in our recent Wind Investment Boardroom roundtable on green hydrogen were keen to highlight, policymaking will amount to little unless there is funding to back it up. It's also critical that the distribution of the funding is effectively targeted.

In addition, our speakers discussed how wind companies would need to adapt their strategies. You can download an extended report on the discussion here.

Electricity price hampers efforts

In order to successfully grow the green hydrogen sector, the primary goal must be bringing down the cost of production so that it is on a par with fossil fuels.

This is because the cost of electricity is a major stumbling block when it comes to efficiently producing green hydrogen.

As a result, green hydrogen producers can struggle to compete with those that produce blue and grey hydrogen at a fraction of the price.

One of our expert speakers summed it up thus: “The price of electricity and how it impacts on hydrogen is a challenge – in order to ensure large quantities of hydrogen is produced, government intervention will be needed as the price needs to be addressed.”

That said, despite concerns about high electricity costs, it’s important that wind power companies are alive to a significant opportunity here. Indeed, wind businesses are asking themselves whether they want to expand their operations by entering the green hydrogen production industry.

What’s the best way for companies to approach this?

In order to ensure the business case for producing green hydrogen stacks up for wind companies, it’s important that they are: first, onshore wind businesses as it’s not really a viable proposition for offshore wind at present; and second, involved in the solar market too, as wind farms and solar farms have different production profiles. This provides a greater diversity of sources that operators can use to power their electrolysers.

In addition, a first-rate cost-benefit analysis will look at how much hydrogen can wind farms produce and for which uses. With regard to the issue of end users, the smart thinking is that the mobility sector should be the primary target market at this point.

Produce more wind, more cheaply

However, there are challenges.

One of the biggest is that, for wind power companies to get involved in the production of green hydrogen, the need to produce “more wind power more cheaply”, according to James Pay, partner at Clifford Chance and head of the firm’s global renewables group and co-head of the firm’s mining and metals group. He added that, initially, the biggest opportunities would be found in areas such as transportation hubs, data centres and industrial hubs.

There is a widespread belief that 2020 was a ‘breakthrough’ year for green hydrogen. The aforementioned EU Hydrogen Strategy sets a green hydrogen (or ‘clean hydrogen’) target of 6GW of electrolysers installed by 2024, which would be a huge increase on the approximately 250MW that were in place globally at the time of the publication of the strategy in summer 2020.

The strategy also serves a number of other purposes.

In addition to the obvious objective of furthering the case for green hydrogen, the strategy also, at a time of Covid-induced economic strife, sets a framework for meeting the need for large-scale investment to kick-start the economy.

Indeed, there is a view that Covid-19 may have actually strengthened the case for large-scale Europe-wide investment in green hydrogen. This is because of the growing need for green economic recovery following widespread action to raise awareness of the climate crisis in 2019.

So there is clearly an opportunity for wind power companies to move into the world of hydrogen but, to capitalise on this opportunity, these firms will need support. Funding is urgently required to help industrialise and commercialise this new sector, and thus slash the price of producing green hydrogen.

If wind gets that, we could be on the verge of a green hydrogen revolution.

The full-length Green Hydrogen report is now available to A Word About Wind members.

It’s tempting to think green hydrogen’s time has come.

Policymakers are clearly on board. The last 12 months saw a raft of hydrogen strategies published, not only by the European Union, but also by a number of individual countries, including Germany, Canada and Scotland.

Unfortunately, political will is not enough. As participants in our recent Wind Investment Boardroom roundtable on green hydrogen were keen to highlight, policymaking will amount to little unless there is funding to back it up. It's also critical that the distribution of the funding is effectively targeted.

In addition, our speakers discussed how wind companies would need to adapt their strategies. You can download an extended report on the discussion here.

Electricity price hampers efforts

In order to successfully grow the green hydrogen sector, the primary goal must be bringing down the cost of production so that it is on a par with fossil fuels.

This is because the cost of electricity is a major stumbling block when it comes to efficiently producing green hydrogen.

As a result, green hydrogen producers can struggle to compete with those that produce blue and grey hydrogen at a fraction of the price.

One of our expert speakers summed it up thus: “The price of electricity and how it impacts on hydrogen is a challenge – in order to ensure large quantities of hydrogen is produced, government intervention will be needed as the price needs to be addressed.”

That said, despite concerns about high electricity costs, it’s important that wind power companies are alive to a significant opportunity here. Indeed, wind businesses are asking themselves whether they want to expand their operations by entering the green hydrogen production industry.

What’s the best way for companies to approach this?

In order to ensure the business case for producing green hydrogen stacks up for wind companies, it’s important that they are: first, onshore wind businesses as it’s not really a viable proposition for offshore wind at present; and second, involved in the solar market too, as wind farms and solar farms have different production profiles. This provides a greater diversity of sources that operators can use to power their electrolysers.

In addition, a first-rate cost-benefit analysis will look at how much hydrogen can wind farms produce and for which uses. With regard to the issue of end users, the smart thinking is that the mobility sector should be the primary target market at this point.

Produce more wind, more cheaply

However, there are challenges.

One of the biggest is that, for wind power companies to get involved in the production of green hydrogen, the need to produce “more wind power more cheaply”, according to James Pay, partner at Clifford Chance and head of the firm’s global renewables group and co-head of the firm’s mining and metals group. He added that, initially, the biggest opportunities would be found in areas such as transportation hubs, data centres and industrial hubs.

There is a widespread belief that 2020 was a ‘breakthrough’ year for green hydrogen. The aforementioned EU Hydrogen Strategy sets a green hydrogen (or ‘clean hydrogen’) target of 6GW of electrolysers installed by 2024, which would be a huge increase on the approximately 250MW that were in place globally at the time of the publication of the strategy in summer 2020.

The strategy also serves a number of other purposes.

In addition to the obvious objective of furthering the case for green hydrogen, the strategy also, at a time of Covid-induced economic strife, sets a framework for meeting the need for large-scale investment to kick-start the economy.

Indeed, there is a view that Covid-19 may have actually strengthened the case for large-scale Europe-wide investment in green hydrogen. This is because of the growing need for green economic recovery following widespread action to raise awareness of the climate crisis in 2019.

So there is clearly an opportunity for wind power companies to move into the world of hydrogen but, to capitalise on this opportunity, these firms will need support. Funding is urgently required to help industrialise and commercialise this new sector, and thus slash the price of producing green hydrogen.

If wind gets that, we could be on the verge of a green hydrogen revolution.

The full-length Green Hydrogen report is now available to A Word About Wind members.

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Full archive access is available to members only

Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.