COULD HYDROGEN SOLVE THE EUROPEAN ENERGY CRISIS?

At Solomon Peter Investments, one of our specialisms is sustainable energy solutions. As such we are intrigued by potential role of hydrogen as a key energy source in the European energy mix. The quest for cleaner, more sustainable alternatives has propelled hydrogen into the spotlight, with various European countries embracing this versatile element as a crucial component of their decarbonization strategies.

This article aims to summaries the key factors in assessing the considerations for hydrogen use within the European context. From its role in decarbonizing industries to serving as a promising energy carrier for hard to abate sectors, hydrogen has emerged as a linchpin in achieving ambitious climate goals.

The increase in market sentiment is also being underpinned by the European Commission’s initiation of the first auction under the European Hydrogen Bank, which has allocated €800 million from emissions trading revenues to support the production of renewable hydrogen in Europe through the Innovation Fund.

The use of Hydrogen could improve security of supply and sustainability, especially with the use of domestically produced green hydrogen; this would solve two elements of the trilemma. However, from an affordability perspective there are a number of limitations.

When trying to unpick the discussion on the limitations, it’s important to note and understand the different types of hydrogen and respective colour codes as each hydrogen production method has its own fundamentals depending on the technology used, download our poster for a summary on the various hydrogen production colour codes on the Solomon Peter Group membership website HERE.

• Cost: The cost of producing hydrogen is currently much higher than that of fossil fuels. In addition, it requires significant investment to build the necessary infrastructure for the production, storage, and distribution of hydrogen. Therefore, it may not be a cost-effective solution in the short term, and it may take a while to recoup the investment.
• Efficiency: Hydrogen is not an efficient source of energy. It requires a significant amount of energy to produce hydrogen, and when used as a fuel, it only converts a fraction of that energy into useful work. As a result, more energy is required to produce the same amount of energy from hydrogen than from other sources.
• Limited availability: Hydrogen is not readily available in its pure form and must be produced through a process that requires the use of other energy sources such as natural gas, coal or natural resources (wind, solar). Therefore, it is not a renewable energy source and is limited by fossil fuel and land availability; hence may not be a long-term solution for the energy crisis.
• Safety concerns: Hydrogen is highly flammable and can pose safety risks if not handled properly. There have been instances of hydrogen explosions, and therefore, significant safety measures must be taken when producing, storing, and transporting hydrogen.
• Carbon emissions: While hydrogen may be a clean-burning fuel, it still produces carbon emissions when produced from fossil fuels. The production of hydrogen from renewable sources such as wind or solar energy is still in its early stages and is not yet scalable.

Overall, while hydrogen energy has the potential to be a part of the solution for the energy crisis in Europe, it may not be the most efficient or cost-effective solution in the short term, and there are significant challenges that must be addressed before it can become a viable long-term solution.