The green hydrogen industry is set to experience significant expansion in the coming years, with a forecasted capacity of 175 million tonnes per annum by October 2024. This growth is driven by the decreasing Levelized Cost of Hydrogen (LCOH), making renewable energy-produced hydrogen more competitive with fossil fuel-derived grey hydrogen.
To achieve cost competitiveness with fossil fuels, it is crucial to address the high production costs of green hydrogen. Relying solely on subsidies is not a sustainable long-term solution. Fritz Hagen, engineering director for Worley’s Green Hydrogen Center of Excellence in The Hague, explains that production costs must decrease to make green hydrogen a viable alternative. However, cost-cutting measures can potentially impact production levels, posing a threat to the financial stability of hydrogen facilities.
Digital solutions are emerging as a valuable tool in managing the efficiency and costs of green hydrogen facilities. By leveraging data analytics and real-time information, these solutions can help lower the production costs of green hydrogen. Reducing inefficiencies, optimizing processes, and addressing emerging challenges such as intermittent power supply and electrolyser degradation are key focus areas.
Worley’s Asset Optimization Center (AOC), developed in collaboration with industry partners IBM and ABB, is a digital platform that utilizes real-time data, weather forecasts, and energy information to generate intelligent insights. This platform assists in lowering the production costs of green hydrogen and addresses various operational challenges. By adapting operations for the energy transition and embracing integrated digital solutions, the AOC enhances efficiency and reduces operating costs.
In contrast to the oil and gas industry, which struggles to integrate digital solutions due to reliance on legacy systems, the green hydrogen industry has the advantage of embedding digital technologies from the start of each new project. This approach enables the industry to leverage the power of data and gain valuable insights to improve operations, reduce maintenance costs, and pave the way for the next generation of green hydrogen projects.
Sharing data and learnings across the green hydrogen sector is essential for achieving the energy transition targets quickly. While there are challenges in encouraging data sharing, stakeholders in the industry stand to benefit from the collective knowledge and experiences gained from the first industrial-scale green hydrogen assets that are now coming online. The role of digital solutions in establishing and driving the green hydrogen industry cannot be overstated. It is through digital innovation that the sector can unlock its full potential and make significant contributions to a more sustainable energy future.
Frequently Asked Questions:
1. What is driving the significant expansion of the green hydrogen industry?
The expansion of the green hydrogen industry is primarily driven by the decreasing Levelized Cost of Hydrogen (LCOH), which makes renewable energy-produced hydrogen more competitive with fossil fuel-derived grey hydrogen.
2. Why is it important to address the high production costs of green hydrogen?
Addressing the high production costs of green hydrogen is crucial to achieve cost competitiveness with fossil fuels and make green hydrogen a viable alternative in the long term. Relying solely on subsidies is not sustainable.
3. How can digital solutions help in managing the efficiency and costs of green hydrogen facilities?
Digital solutions, such as data analytics and real-time information, can help lower the production costs of green hydrogen by reducing inefficiencies, optimizing processes, and addressing challenges like intermittent power supply and electrolyser degradation.
4. What is Worley’s Asset Optimization Center (AOC) and how does it contribute to reducing production costs?
Worley’s AOC is a digital platform developed in collaboration with industry partners IBM and ABB. It utilizes real-time data, weather forecasts, and energy information to generate intelligent insights, helping to lower the production costs of green hydrogen and address operational challenges.
5. Why is the green hydrogen industry better positioned to integrate digital solutions compared to the oil and gas industry?
Unlike the oil and gas industry, which struggles with legacy systems, the green hydrogen industry has the advantage of embedding digital technologies from the start of each new project. This enables the industry to leverage the power of data and gain valuable insights to improve operations and reduce maintenance costs.
6. Why is data sharing important in the green hydrogen sector?
Data sharing is essential in the green hydrogen sector to achieve energy transition targets quickly. By sharing data and learnings, stakeholders in the industry can benefit from collective knowledge and experiences gained from the first industrial-scale green hydrogen assets.
Key Terms:
– Green hydrogen: Hydrogen produced through the electrolysis of water using electricity generated from renewable sources, such as wind or solar power.
– Grey hydrogen: Hydrogen produced from fossil fuels, primarily natural gas, through a process called steam methane reforming.
– Levelized Cost of Hydrogen (LCOH): The average cost, over the lifetime of a project, to produce a unit of hydrogen, taking into account all costs including capital, operation, and maintenance.
– Digital solutions: Refers to the use of technology and data analytics to improve efficiency, optimize operations, and address challenges in various industries.
– Data analytics: The process of examining large sets of data to uncover patterns, trends, and insights that can inform decision-making.
– Electrolyser degradation: The gradual deterioration of electrolysis equipment used to produce hydrogen, often caused by factors such as corrosion, high temperatures, or impurities in the water or electrodes.
Related Links:
– Worley: Official website of Worley, the company mentioned in the article.
– IBM: Official website of IBM, one of the industry partners involved in developing Worley’s Asset Optimization Center (AOC).
– ABB: Official website of ABB, another industry partner involved in developing Worley’s Asset Optimization Center (AOC).
