With worldwide CO2 emissions reaching a record ~37 billion tons in 2023, the path to limit global warming to 1.5 degrees C is narrowing. The urgency to reduce emissions is further complicated by rising energy demand, which the International Energy Agency (IEA) forecasts will increase roughly 50% above current levels by 20501.
Significant progress is being made to decarbonize the world’s energy supply.
In 2023, global renewable capacity additions grew at the fastest rate in two decades - reaching 510 gigawatts (GW)2. While this is an encouraging trend, there are still several areas of industry that rely heavily on hydrocarbon-based feedstocks, and thus cannot easily be decarbonized through direct electrification (e.g., steel, refining, chemicals, fertilizer production, etc.)
Green hydrogen produced via water electrolysis plants powered by low-carbon energy can play a key role in putting these sectors on a path to net-zero. The IEA estimates that the world will need to produce 520 million tons of low-emissions hydrogen annually by 2050 to reach carbon neutrality.
In this blog, we discuss the important role green hydrogen can play in driving a successful energy transition and discuss how Hitachi Energy is supporting the industry on both the supply (i.e., production) and demand (i.e., utilization) side.
End-uses of green hydrogen
Hydrogen is a highly versatile element and has a wide range of end-use applications within the context of the energy transition.
Some of these include:
- Refining and chemicals - The refining and chemical sectors together represent nearly 10% of global CO2 emissions. A significant portion of these emissions are attributable to the use of hydrogen feedstock, which is a key building block for products like fertilizers, plastics, textiles, etc.
By transitioning to a green hydrogen supply, refiners and chemical producers can drastically reduce their carbon footprint. The switch is straightforward from an engineering perspective and involves few (if any) modifications at the point of end-use, as there is no molecular difference between grey and green hydrogen.
- Steel - Iron and steelmaking also stands to benefit from the green hydrogen economy. Steelmaking is the world’s most carbon-intensive sector and accounts for approximately 7% of global CO2 emissions (more than all of road freight)3. The majority of these emissions are a direct result of coal use for the basic oxygen furnace (BOF) process. Low-carbon alternatives to BOF, such as direct-reduced ironmaking (DRI), in combination with electric arc furnaces, have emerged as viable decarbonization pathway for steelmaking. While the majority of DRI plants in operation today use natural gas as a feedstock, green hydrogen represents a far more sustainable option that can reduce the carbon intensity of steelmaking by as much as 95%.
- Power generation and long-duration energy storage - The use of green hydrogen as a long-duration storage medium for dispatchable renewable electricity and a combustion fuel for power generation is gaining traction as well. Many utilities and energy producers have already successfully demonstrated operating natural gas-fired plants on hydrogen admixtures. Similarly, power generators based on hydrogen fuel cells are an emission-free solution that can serve as a clean and low-noise alternative to diesel generators for construction sites, mines, data centers, etc.
- E-fuels – Green hydrogen can be chemically combined with other elements to produce carbon-neutral e-fuels. Green methanol (hydrogen combined with carbon) and green ammonia (hydrogen combined with nitrogen), for example, are both being applied in the marine sector as a replacement for fuel oil in long-haul ships. As of April 2023, there were 25 methanol ships in operation globally, with an additional 80 under contract to be built4.
How Hitachi Energy is supporting electrolyzer plants
Electrolysis entails splitting water molecules into hydrogen and oxygen using electricity. If a renewable energy source is used, there are zero direct emissions from the process.
The IEA estimates that realization of all green hydrogen developments in the current pipeline could lead to an installed electrolyzer capacity of 170-365 GW by 20305.
To date, only a very small percentage of these projects have reached final investment decision (FID). Achieving the upper end of the projected range will require the industry to overcome significant headwinds in the coming years, including constraints related to power supply and grid integration.
With unparalleled expertise from early-stage project origination, due diligence, and planning, through to power conversion systems and grid compliance, Hitachi Energy is uniquely capable of de-risking medium to giga-scale electrolyzer plant development. We have decades of experience connecting industrial assets to the grid and are now applying this experience to electrolyzers.
We work with customers to optimize the complete electrical power supply system of the plant, starting from the grid connection down to electrolyzer stack terminals. Our power quality solutions and co-located battery energy storage systems (BESS) enable reactive power compensation, harmonic filtering, power conversion, etc., and support the safe and efficient production of green hydrogen, whilst at the same time optimizing costs and footprint.
We also support the development of off-grid plants with proven grid-forming solutions.
Our hardware solutions are complemented by a comprehensive digital portfolio. Together, this combination allows Hitachi Energy to maximize safety, avoid technical issues, and help customers maintain a focus on continuously reducing their levelized cost of hydrogen production.
Connecting large systems to the power grid is not trivial, especially if the system is based on power electronics. You need to consider the implications to the grid, such as voltage disturbances, reactive power needs and harmonics. It is important to work with the right partner to ensure full compliance with ever more stringent grid codes.
In 2022, we announced a landmark collaboration with H2 Green Steel in Sweden.
Located in the municipality of Boden, H2 Green Steel’s DRI plant will use green hydrogen instead of coal to reduce CO2 emissions by 95 percent compared to traditional steelmaking. This will be equivalent to removing 3 million passenger cars per year from road6.
Generating clean power with HyFlex™
We are also working with industrial customers to decarbonize power generation with hydrogen fuel cell technology.
Our HyFlex hydrogen power generator is a complete plug-and-play system, which includes fuel cell modules, power electronics, batteries, cooling, and auxiliary equipment. The generator is enclosed in an easily transportable container that converts hydrogen to clean electricity with minimal noise emissions.
Compared to conventional diesel power generators running continuously, a 1 MVA HyFlex system can mitigate up to 1,600 tons of diesel fuel per year, which translates into 5,800 tons of CO2 avoided.
In November 2023, we inaugurated our first HyFlex “Demonstration Unit” which is available for trial purposes in Europe. The first commercial deliveries rated at 400 – 600 kVA are currently being discussed with several partners. This variant is ideal for temporary installation in remote areas that lack grid access. After use, it can be easily transported by truck to the next site.
Many companies in construction and mining operate sites that don't have access to grid power. Historically they needed to rely on diesel generators for electrical power. HyFlex represents a clean alternative to these generators and enables operators to drastically reduce their carbon footprint.
As a next step, we also plan to introduce a high-power variant for permanent and fixed installations.
The larger solution will be designed to operate in parallel and capable of meeting a broad range of megawatt-scale power requirements for facilities like data centers and other critical infrastructure.
Overcoming bottlenecks
Green hydrogen holds tremendous promise as a driver of the energy transition. Its versatility as a clean energy carrier and ability to indirectly electrify hard-to-abate sectors make it a powerful force that has the potential to drive industrial decarbonization.
However, like any new technology, there are challenges related to scaling and widespread adoption.
Although legislation like the Inflation Reduction Act (IRA) in the US and Fit for 55 package in Europe provide much-needed financial support for developing the green hydrogen economy, execution risks remain.
Grid infrastructure and renewable generating capacity are bottlenecks that threaten to slow electrolyzer build-out and hamper industrial decarbonization if they are not addressed.
As a global leader in sustainable technologies, Hitachi Energy is focused on providing innovative products, solutions, and services to overcome these hurdles and accelerate the transition to a low-carbon future. This is a global challenge that spans industries, countries, societies, and companies. Solving it requires new ways of thinking to innovate and advance progress at each step, with a constant focus on the project outcome.
More information on Hitachi Energy’s hydrogen solutions here.
It’s time to accelerate the energy transition.
Speak to our team today about our hydrogen solutions