Can digital solutions be the catalyst for green hydrogen projects?
Hydrogen Central spoke with Chris Gill, Senior Vice President of Global Hydrogen at Worley, about the key barriers to the successful development of green hydrogen projects. We also gathered his insights on how governments, producers, and other stakeholders should address these challenges.
What is the biggest barrier to green hydrogen projects?
The biggest barrier is cost. A competitive cost structure is essential to secure the off-take agreements that are crucial for project advancement, and that means addressing both capital expenditure (CapEx) and operating costs (OpEx).
“When it comes to CapEx, there are areas such as safety where compromises cannot, and should not, be made because of the hazardous nature of process industries. Additional CapEx costs often arise from customization in early-stage projects—particularly those that are smaller in scale or focused on decarbonizing existing facilities, such as refineries. These customizations, while sometimes required, add complexity. A shift toward greater standardization is necessary to drive down costs; however, this requires projects of sufficient scale to make such standardization feasible.”
One place with potential is Morocco, with a strategy to be self-sufficient in green ammonia for its fertilizer industry. With that has come ambitions to develop multi-gigawatt-scale projects in support, which in turn will provide the necessary scale to reap significant rewards from standardization.
“OpEx is often less discussed, but represents the largest cost to green hydrogen producers, particularly when assets become more complex. Managing the cost for a single small asset can be relatively straightforward, but operational strategy becomes more challenging when assets become more complex in a multi-asset fleet approach.”
We have a unique opportunity at this point in the energy transition, with a vast number of new assets set to come online and a range of advanced digital solutions ready to be applied for optimal performance from the outset.
“Worley has partnered with IBM and ABB to develop the Asset Optimization Center (AOC) that helps operators make decisions according to variables such as the best times to produce molecules according to supply chain demands versus the availability and cost of electrons at any point in time. When considering variables like efficiency, asset degradation, and weather conditions (such as solar or wind power generation), deploying smart solutions becomes crucial for optimization and achieving better results.”
Are there infrastructure challenges associated with a project, such as land and energy supply?
There are various infrastructure considerations to enable the development of a project, including the tie-in to electrical systems, pipelines to move the molecules and the availability of renewables at a level of volume that can run the asset.
“The ease of securing this infrastructure can vary greatly across regions. In Europe, the permitting process often involves multiple stakeholders and can be complex, which has led to some delays. A notable example of this is the Delta Rhine Corridor pipeline in the Netherlands, where the expected completion has been pushed from 2028 to 2032. This shift may have implications for energy transition timelines. That sits in stark contrast to the huge deployments of projects across the Middle East and China. European governments should draw from this some urgency in streamlining permitting, where possible, to ensure they don’t fall behind their ambitious goals of being at the global forefront of green hydrogen production.”
Following on from your point about what governments can do to support the development of infrastructure, is there a broader regulatory challenge as well?
Yes, a major inhibitor to an established global hydrogen market is a lack of common standards across hydrogen production, storage, transport, safety regulations, and environmental impact.
“We use different terminologies for various types of hydrogen, each reflecting significant differences in carbon content. In practice, this causes major barriers in moving the molecules from one place to another.There is a positive role to play here for the G20 and other influential industry bodies, such as the International Energy Agency, to support the development of a framework.”
There are plenty of positive steps being taken at a regional level, as well, for example, the EU’s Renewable Energy Directive that is aimed at reducing grey hydrogen use by 42% by 2030.
“That starts to create demand for low-carbon alternatives, such as green hydrogen. Couple that with efforts such as the work being done through the European Hydrogen Bank, which is generating “1.2 billion Euros in project funding through levies on high-emitting industries, and you can begin to see the adoption of a carrot-and-stick approach that is going to be the most effective way for governments to make a difference.”
We’ve talked about these cross-border challenges, but what about communities local to the project site? What are the considerations for these stakeholders?
There is some hesitancy among the wider population regarding small-scale hydrogen projects, which producers need to address as part of their license to operate.
“That hesitancy is being driven by a concern over safety, partly because hydrogen is not a familiar part of everyday life for most people, so there is an elevated perception of risk in the unknown. However, that does not mean we should play down the real risks in hydrogen production; the molecules are very small, which means there is a potential for them to escape systems, and they have a very high level of flammability. That should serve as a regular reminder to the industry that there is a job to be done to win over stakeholders, and fundamental to that is ensuring safety is paramount and must not be lost in our drive towards standardization.”
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Can digital solutions be the catalyst for green hydrogen projects?
