Enertrag

Article by Beatriz Aguilar (Project Manager at ENERTRAG)

How many times have you heard about the energy transition? It's a concept that has been part of our lives for some years now. At least for those of us who are part of the Renewable Energy sector.

In this text, I will not discuss the need to change how we consume energy. And when I say "how," I include all the concepts: how it is generated, the technology used, the efficiency of its transformation and use, its distribution and storage. But I will talk about the need to broaden the focus of action that has so far been concentrated on electrical energy.

Why Hydrogen?

Electrification with electric motors, heat pumps, batteries, etc., is excellent and, whenever possible, is almost always the most efficient and economical solution. However, there are also sectors and industries that are difficult or impossible to electrify due to the energy density required (not supplied by batteries), the need for a raw material (not electrons), or the temperature requirements of existing furnaces. These sectors include steelmaking, maritime transport, air transport, petrochemical and fertilizer production, and the cement industry. Green hydrogen, produced by the electrolysis of water using renewable energies (such as solar or wind), can help decarbonize these sectors. For some of these use cases – particularly maritime transport, air transport, and the replacement of fossil methanol and ammonia in chemicals and fertilizers – what is needed is not hydrogen directly, but its derivatives e-methanol, e-kerosene, and e-ammonia, the first two of which also require a biogenic source of CO2 in addition to green hydrogen for their production.

Furthermore, hydrogen can act as a seasonal energy storage vector, allowing excess wind and solar energy to be absorbed during periods of high generation and released when resources are low. Although the full-cycle efficiency is much lower than that of batteries, this can help balance long-term discrepancies between supply and demand (renewables).

It's clear that hydrogen isn't a panacea… For now, it provides a technological solution to some of the major challenges of the energy transition. But there's an even bigger challenge: profitability.

Producing hydrogen on a large scale requires a huge amount of electricity and expensive electrolyzers, whose prices have increased instead of decreasing over the past year. This results in the cost of green hydrogen and its derivatives being 3 to 8 times higher than their fossil fuel equivalents. I told you it was a huge challenge!

Of course, as with any technological advancement, it will have to go through a learning curve. This requires significant R&D and investment to improve, simplify, and increase the efficiency of hydrogen and its derivatives' production and transportation processes. This will undoubtedly lead to a reduction in generation costs. But it cannot yet be fully supported by producers. Just as renewable energies needed feed-in tariffs to reduce learning curves, green hydrogen also needs regulatory intervention in the form of incentive measures (quotas for green hydrogen as referred to in "RED III"), as well as grants and other subsidies. We have already achieved grid parity with wind and solar photovoltaic energy in many locations; now we will have to achieve the same with green hydrogen.

Portugal has the necessary conditions to develop green hydrogen generation projects more efficiently than in most other places in the world, and certainly not in Europe. It possesses good wind, solar, and hydroelectric resources, a developed electricity grid, and, not least, enormous quantities of available biogenic CO2. There is still much work to be done, but the opportunity is enormous!

Furthermore, Portugal, along with Spain, France, and Germany, is part of the H2Med green hydrogen corridor project. The H2Med corridor consists of connecting the hydrogen transport pipeline from the Iberian Peninsula to northwestern Europe, with the goal of transporting approximately 10% of the total hydrogen consumption projected for Europe by 2030, out of the 20 million tons expected to be consumed annually.

As a society, we must work to keep the planet habitable, and this requires achieving Net Zero by 2050 and safeguarding the natural resources that are essential for our survival and that of future generations. ENERTRAG, for example, is committed to the energy transition, with its pipeline of renewable energy projects, as well as green hydrogen projects worldwide and in Portugal.