ITM Power predicts green hydrogen will become a cost-effective fuel
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The British firm that makes electrolyzers says that clean H2 will be less expensive than natural gas.
ITM Power, British firm that makes electrolyzers has predicted that green hydrogen will become more cost effective than natural gas.
It pointed to the price of natural gas and the war in Ukraine as factors boosting affordability of H2.
The company, based in Sheffield in the UK, manufacturers electrolyzers that produce green hydrogen fuel from water. They stated that the energy crisis offers a substantial and meaningful alternative to natural gas. That said, the broadening losses it has experienced and the exit (once a replacement is found) of Graham Cooley, ITM Power’s longstanding CEO, has sent the company’s shares tumbling as investors are now wary.
The majority of H2 is grey (made using natural gas) or blue (made using natural gas with carbon capture and storage to cut emissions). That said, even carbon capture and storage is estimated to miss 5 percent to 15 percent of the carbon emissions. Green hydrogen is made by splitting water with electrolysis in a method powered by renewable energy such as solar or wind. It is considered to be a zero-emission production process.
Among the primary barriers to green hydrogen’s adoption is the cost associated with its use.
However, according to Cooley, since 2022 began, methane (natural gas) and fertilizer prices have risen and renewable H2 has “achieved first parity and then become cheaper in many cases than producing these commodities from gas feedstocks.”
“There is only one net zero energy gas that can replace methane to help the world address climate change. Green hydrogen can also help to deliver energy security and contribute to food security through the production of green ammonia for fertilisers,” Cooley added. “These abilities have become very powerful drivers for our business as governments seek to accelerate the share of intermittent renewables in their countries’ energy mix to address dependence on weaponised gas supply from Russia.”
Green hydrogen is increasingly seen as a substantial fuel option to replace fossil fuels. Several governments, including the United Kingdom, the United States, Australia and Canada, among others, have released strategies with a substantial focus on H2 as a component of their decarbonization.