On the effects of the Russian crisis for the invasion of Ukraine and because of the Russian natural gas problem, Europe decided to invest towards building a market for low-carbon hydrogen to break its need for Russian gas.
About a 450% jump in European gas prices last year made the green fuels of the future cost-competitive. Investment funds are joining governments and utilities in ambitious plans to make hydrogen viable instead of using fossil fuels for manufacturing, transportation and heating.
Fortescue Metals Group Ltd plans a $50 billion hydrogen supply chain project with German energy giant E.On SE and Norway’s Scatec ASA to build a $5 billion production plant; The Hy24 investment fund brought in $1.6 billion for infrastructure. About 93% of hydrogen producers, users and investors attending a BNEF said they expected the war to boost development of the green-hydrogen industry.
BNEF analysts found that green hydrogen made by machines called “electrolyzers” that are powered by the wind and sunwould be cost-competitive today with the fossil fuel-based product. According to BNEF replacing current hydrogen demand with the green kind in industries like oil refining and fertilizer production could reduce demand in the European Union’s gas by 12%. European Union doubled goal for green-hydrogen capacity to 80 gigawatts by 2030, compared with less than 1 gigawatt today.
The U.K. just set a target to produce at least 5 gigawatts of hydrogen from electrolyzers by 2030. In the U.S., the Biden administration said the infrastructure needed to increase natural-gas shipments to Europe will be ready-made for conversion to handle hydrogen. These projects will take years to be realized and require an enormous increase in renewable sources, but the government support still gives private money the confidence to move in. Hy24 is a joint venture between Ardian SAS, one of Europe’s largest private investment houses with $125 billion under management, HH2E is seeking 2.7 billion euros to build 4 gigawatts of green hydrogen and green heat-production capacity by 2030.
CEO of Ceres Power Holdings Plc, a hydrogen technology company based in the UK. said “It’s kind of a tipping point,” he also said that ““You will see that capital is coming in on a large scale now. There is no turning back”.
Fortescue’s billionaire founder said in an interview that “The case for hydrogen was already growing benefits, primarily because of its climate, but the war broadened investor interest by highlighting the need for energy security” He also mentioned that “After the tanks rolled across the border, there’s none of that conscience at work in people’s minds. It is a physical, fiscal necessity.”
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