As Siemens commissions Germany’s second largest electrolyzer at the Energy Park in Wunsiedel, Engie has taken the Final Investment Decision for a project in Western Australia, scheduled for completion in 2024. Meanwhile, two reports shed light on the future of green hydrogen: on the demand side, the MENA region could use it to become the global leader of green steel; on the supply side, BNEF welcomes the support commitments coming from Europe and the United States.
Siemens has commissioned one of Germany's largest electrolyzers in Wunsiedel in northeastern Bavaria. The 8.75 MW PEM electrolysis plant will use only solar and wind power. Siemens did not disclose where the green electricity would come from. The plant's operator is the specially founded company WUN H2, in which Siemens Financial Services and the company Rießner Gase from nearby Lichtenfels each have a 45% stake and the Wunsiedel municipal utility a 10% share. WUN H2 is currently considering expanding the plant to 17.5 MW. The facility can generate up to 1,350 tons of green hydrogen annually. “The Wunsiedel concept demonstrates that local green hydrogen production is feasible in Germany. Waste heat recovery and regional hydrogen use for industrial purposes, transportation and energy storage boost the business case,” Thomas Hillig, managing director at THEnergy consultancy in Munich, told pv magazine .
Engie has taken the Final Investment Decision for an industrial-scale renewable hydrogen project in the Pilbara region of Western Australia. The project will include a 10 MW electrolyzer powered by 18 MW solar PV and supported by an 8 MW battery energy storage system. “Scheduled for completion in 2024, the first phase of the Yuri project will produce up to 640 tonnes of renewable hydrogen per year as a zero carbon feedstock for Yara Australia's ammonia production facility in Karratha,” wrote the French energy company. Mitsui has agreed to acquire a 28% stake in the joint venture company for the Yuri project, subject to the satisfaction of certain conditions under the agreement. Australian authorities are supporting the project with two grants for a total of AUD 49.5 million ($ 33.2 million).
The Institute for Energy Economics and Financial Analysis wrote that the Middle East and North Africa (MENA) region is in a prime position to start producing carbon-neutral or green steel. “The MENA region can lead the world if it shifts promptly to renewables and applies green hydrogen in its steel sector,” said Soroush Basirat, author of the “Green Steel Opportunity in the Middle East and North Africa” report. The analysis underlines that the region's sector is dominated by direct reduced iron-electric arc furnace (DRI-EAF) technology, which releases lower emissions than the obsolete coal-fuelled blast furnace and basic oxygen furnace (BF-BOF) process used in 71% of global crude steel production in 2021. “In 2021, MENA produced just 3% of global crude steel but accounted for nearly 46% of the world's DRI production,” said Basirat. The DRI-EAF process uses electricity and syngas from natural gas or gasified coal. It could be zero emissions if green hydrogen (produced using renewable energy-powered electrolysis) and electric arc furnaces powered by renewable energy were used. The region would not require investments in base technology, with all the funds used to expand the production of green hydrogen. DRI-EAF production should reach between 29% and 56% of primary steel production, according to different estimates. The World Bank said that MENA has the highest global photovoltaic power potential and could theoretically produce more than 5.8 kWh per square meter daily. It is predicted that 83 GW of wind and 334 GW of solar power will be added by 2050, increasing the share of wind and solar from 1% and 2%, respectively, to 9% and 24%. “With MENA's available capacity, producing green hydrogen below $1/kg is achievable by 2050,” said Basirat, speaking about Egypt, Saudi Arabia and the UAE.
Bloomberg New Energy Finance (BNEF) found that governments committed $126 billion to hydrogen by August 2022. The US committed at least $13 billion for clean H2 producers under its Inflation Reduction Act, while the European Union's REPowerEU plan introduced the long-awaited carbon contract for difference system. “These policies will make clean hydrogen more competitive, helping producers find buyers to build the clean H2 supply capacity,” BNEF wrote. Production of clean H2 could reach 44.3 million metric tons based on announced projects, equivalent to 38% of gray H2 production today. “While many electrolysis projects are delayed, we expect 247 GW of electrolyzers installed by 2030. Blue hydrogen also plays a strong role in the US, Canada, and UK thanks to support for carbon capture and storage,” BNEF wrote. BNEF's database counts 146 industrial projects planning to use clean H2, up from 114 in January.
European Commission President Ursula von der Leyen announced plans to create the European Hydrogen Bank, a new financial institution able to invest €3 billion to help build the future market for hydrogen. Meanwhile, the European Parliament adopted a measure to raise the share of renewables in the EU's final energy consumption, scrapping the “additionality” requirements at the EU level within the Renewable Energy Directive II (RED II). The Parliament will now start negotiations with the Council.
H2 MOBILITY Germany plans to purchase green hydrogen from Hy2B Wasserstoff starting in 2024. The green hydrogen will supply H2 MOBILITY hydrogen stations, primarily in Bavaria. Hy2B's hydrogen production plant in Pfeffenhausen is part of the HyPerformer model region HyBayern, funded by the German Federal Ministry of Digital Affairs and Transport (BMDV). Starting in the second half of 2023, the hydrogen electrolysis plant will produce green hydrogen using renewable electricity from a newly constructed open-space photovoltaic plant and later also from wind turbines in the immediate vicinity.
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