April 26, 2021 • Paul Rodden • Season: 2021 • Episode: 6
Welcome to The Hydrogen Podcast!
In episode 006, I discuss the process to make green hydrogen, how it compares to blue hydrogen and what needs to happen to make this cheaper as an energy source in the next 20-30 years. I also discuss projects that have made significant strides in furthering the development of green hydrogen.
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On today's show, let's discuss green hydrogen. What is it? How does it compare to blue hydrogen? Who are some of the big players in the space? And when it may become a viable economic source for hydrogen?
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
Okay, so green hydrogen, what is it? Well, the hydrogen isn't any different from anywhere else. The difference is how it's made. So green hydrogen is made from electrolyzing water using renewable energy. And how does that work? What a very high level, you just put two electrodes in water run electricity through it, and that electricity will split the hydrogen from the oxygen atoms. And when I say electricity, I mean a lot of electricity. And that massive amount of electricity is the main reason why green hydrogen is so much more expensive than blue, or turquoise, or even yellow for that matter. Okay, so that's a very high level, look at what green hydrogen is. Now let's compare that process to blue hydrogen and look at some of the differences in the cost.
Okay, so just looking at some numbers from Platts and an article they released in November of last year, the running average cost for gray hydrogen at the US Gulf Coast was $1.25 and $2 in California, versus green, or as they say, in the article, proton exchange membrane electrolysis pm electrolysis would be at about $2.80 per kilogram at the Gulf Coast and over $4 a kilogram in California. Now, if we compare this to overseas in the Netherlands, gray hydrogen was at about $1.70 a kilogram $1.90 for blue hydrogen, and $4.30 per kilogram for green hydrogen. The priciest, location, however, is in Japan, where gray hydrogen is listed at $2.70 a kilogram, while green hydrogen was averaging $5.30 per kilogram. That's a pretty big discrepancy between green and blue costs. So what are some potential advancements that could change that? Well, we've already seen some government incentives to come out backing renewable energy. So then as the price comes down to create renewable energy, the price then comes down to create green hydrogen.
Another item to consider is material costs. As material costs for wind and solar plants continue to decrease, that will also decrease the cost of hydrogen. Something else to consider is the feedstock price for blue hydrogen. The cost for blue hydrogen is directly related to the cost of natural gas. If natural gas stays low, blue hydrogen will also stay low. Now there are dozens of articles online right now about when green hydrogen could become more cost effective than blue. It's all speculation starting from 2030 to 2050. But what you can bet on is that there will be technological advancements in both blue and green over the next 10 to 20 years. And as both technologies increase, there will come a point in time where green hydrogen development does become cheaper than blue, but it is still too early to know when that will be.
Okay now for a couple of projects and companies to keep an eye on. The first is by the French energy company Total. They've partnered with Province Resources for an eight gigawatt Australian green hydrogen project. The project is a solar and wind powered green hydrogen plant and gas coin in Western Australia. The high energy project will use the bulk of the electricity generated by the wind and solar plants to create hydrogen. Now, Australia is huge in green hydrogen. Along with being an early adopter of the technology and have so many projects in the works, there will be looking to be one of the first global exporters of hydrogen. Another company to keep an eye on is Univer. A global energy company has announced plans to establish a German national hub for hydrogen located in wilhelmshaven. The project they're developing is to create an import terminal for green ammonia. Once the ammonia arrives, it will go through an ammonia cracker to separate the hydrogen which will then go into the European hydrogen backbone network. Along with the import terminal, a 410 megawatt electrolysis plant is also planned.
The project right now is in a feasibility study and it will be interesting to see over the next year how much progress will be made. The last project I want to take a look at is located in the United States in Louisiana. The green fuels renewable energy complex headed up by Koch engineered solutions will partner with Fidelis infrastructure to develop a 9.2 billion multi year program to produce green hydrogen. Along with green hydrogen, they'll also produce renewable diesel, sustainable aviation fuels, and bio plastic feedstocks.
The project should come this year to determine the final cost of the first phase of the project. That being said phase one is estimated to be 1.25 billion. With full completion expected to be in 2030. Some of the costs of the project are being offset by state incentives. After a march 2020 discussion with officials from the Louisiana State Economic Development Board, the state offered a performance based grant of up to $15 million.
So some very interesting green hydrogen projects currently going on. And while I don't expect green hydrogen's economics to match blue or turquoise hydrogen within the next 10 to 15 years, it will be interesting to see what government incentives will be offered in the next 10 years to make green hydrogen more economic. Alright, everyone. That's it for me today. If you have any questions or comments about green hydrogen, log onto our website at www.thehydrogenpodcast.com, and let me know. And as always, stay safe everyone. Take care, and I'll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did want to hear more. I'd appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.