How is green hydrogen contributing to the renewable energy sector

Green hydrogen is playing an increasingly pivotal role in advancing the renewable energy sector and the global energy transition by providing a clean, sustainable alternative to fossil fuels across various industries and applications.

Contributions of Green Hydrogen to the Renewable Energy Sector

1. Decarbonizing Hard-to-Electrify Sectors

Green hydrogen helps decarbonize sectors where direct electrification is challenging or costly, such as:

• Heavy industry: Particularly steel manufacturing, where hydrogen replaces coal as a reducing agent in iron ore processing, significantly cutting CO2 emissions by producing water vapor instead of carbon dioxide.
• Long-haul and heavy-duty transport: Fuel-cell vehicles powered by green hydrogen reduce emissions in trucks, buses, and trains, providing zero-emission alternatives to fossil-fueled engines.
• Maritime transport and chemical industries: Green hydrogen is used to produce green ammonia and methanol, offering cleaner fuels and chemical feedstocks that reduce emissions in shipping and fertilizer production.

2. Linking Renewable Electricity Production to Energy Storage and Flexibility

Green hydrogen is produced by electrolysis, which uses renewable electricity (from solar, wind, or hydropower) to split water into hydrogen and oxygen without carbon emissions. This provides:

• Seasonal and long-term energy storage: Hydrogen can be stored and transported more easily than electricity, enabling renewable energy generated during peak periods to be stored for later use or transported globally as hydrogen or hydrogen-derived fuels.
• Grid flexibility: Electrolysers can adjust their operation to balance variable renewable electricity supply, complementing other grid management tools like batteries and demand response.

3. Expanding Renewable Energy Demand and Infrastructure

Green hydrogen production stimulates growth in renewable energy capacity, as dedicated renewable power plants are developed to supply electrolysers. For example:

• By 2027, around 50 GW of renewable energy capacity is forecasted to be dedicated to hydrogen production globally, which will drive additional investment and deployment of renewables, particularly solar PV and onshore wind.
• Countries like China, Australia, Chile, the United States, and the EU are leading in both green hydrogen projects and renewable capacity expansion, driven by policy initiatives and industrial strategies.

4. Supporting National and Global Climate Goals

• Green hydrogen helps countries aiming for net zero emissions by 2050 by covering around 10-12% of the emissions reduction needed in scenarios aligned with limiting warming to 1.5°C.
• It offers a pathway to replace fossil fuel-based hydrogen (grey hydrogen), which currently accounts for most hydrogen production, thereby avoiding significant CO2 emissions—estimated at 830 million tonnes of CO2 annually if replaced by green hydrogen.

5. Enabling New Energy Markets and Fuel Types

• Conversion of hydrogen into derivatives like ammonia and synthetic fuels boosts its energy density and transportability, unlocking global renewable energy trade and enabling clean fuel use in sectors otherwise hard to decarbonize.

Challenges and Prospects

While green hydrogen is highly sustainable and versatile, current challenges include:

• High production costs relative to fossil fuel alternatives due to expensive renewable electricity and electrolysis technologies.
• Infrastructure needs for production, storage, transport, and end-use applications.
• Safety concerns due to hydrogen’s volatility that require rigorous handling and regulatory frameworks.

However, ongoing technological advancements, policy support (such as tax credits and investment incentives), and scale-up of renewable energy capacity are expected to drive down costs substantially—by up to 85% by 2050 according to BloombergNEF—and improve economic viability.

Summary

Green hydrogen is a transformative renewable energy solution that enables deep decarbonization of heavy industry, transport, and energy storage, while stimulating renewable energy expansion and supporting global climate commitments. Although still nascent, its rapid technological and market growth, along with increasing policy momentum, position green hydrogen as a cornerstone in the global shift toward a sustainable, low-carbon energy future.