Siemens Gamesa presents plan to scale back prices for “inexperienced” hydrogen

Wind turbines in Brandenburg, Germany.

Patrick Pleul | Image Alliance | Getty Images

According to a whitepaper from Siemens Gamesa Renewable Energy, so-called “green” hydrogen production with onshore wind turbines could reach price parity with fossil hydrogen by 2030.

In a statement on Wednesday, the company – a major player in wind turbines – also said that green hydrogen made with wind from the offshore sector could reach price parity by 2035.

The above scenarios depended on the “appropriate political framework and market mechanisms being in place,” the statement said.

Siemens Gamesa’s whitepaper outlines four key areas for reducing costs: increasing renewable energy capacity; Creating a “cost-efficient demand-side market for green hydrogen”; the development of a supply chain; and support the infrastructure.

“It took three decades for wind and sun to reach grid parity with fossil fuels, and we can’t afford to wait that long for green hydrogen to reach price parity with fossil hydrogen,” said Andreas Nauen, CEO of the company .

Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a wide range of possible uses and can be used in sectors such as industry and transport.

It can be made in a number of ways. One method involves the use of electrolysis, where an electrical current breaks water into oxygen and hydrogen.

If the electricity used comes from a renewable source such as wind or sun, some call it “green” or “renewable” hydrogen.

Currently, however, the vast majority of hydrogen production is fossil fuel based and green hydrogen is expensive to produce.

Recently, several large industrial companies have announced plans to integrate green hydrogen into their operations.

In addition, large economies like the European Union plan to install at least 40 gigawatts of renewable hydrogen electrolysers by 2030.

Efforts are also being made to reduce costs. On Monday, the US Department of Energy launched its Energy Earthshots initiative, saying the first of these will focus on bringing the cost of “clean” hydrogen down to $ 1 per kilogram (2.2 lbs) in a decade.

According to the DOE, hydrogen from renewable energies costs around $ 5 per kilogram today. “Clean hydrogen is a game changer,” said US Secretary of Energy Jennifer M. Granholm on Monday, adding that it would help “decarbonise the polluting heavy-duty and industrial sectors.”

On Wednesday, Ben Gallagher, chief emerging technology analyst at Wood Mackenzie research group, tried to highlight how the environment around green hydrogen appears to be changing.

“An increasingly dynamic low-carbon hydrogen market has seen a spate of government support, company commitments, announced projects and even intrigue from viewers over the past 18 months,” he said.

“We believe this activity amounts to a paradigm shift that will make green hydrogen – hydrogen produced from the electrolysis of water using renewable energy – a key element of the energy transition,” he added.