News Article

Green Hydrogen: Moving from Potential to Viability

By Conal Quinn | Thu, 09/08/2022 - 15:27

In recent years, natural gas has been presented as a transition fuel on the road to decarbonization. However, even though it is cleaner than other fossil fuels, the time will come when natural gas must fall by the wayside of progress as well. Hydrogen has opened the door for this eventual transition from natural gas, since it is a source of renewable energy which produces zero emissions. Thanks to technological advances and investment in innovation, the promise of hydrogen is starting to become a market reality with more commercially viable projects.

Regarding the factors that could make Mexico a successful hydrogen-producing country, Ana Laura Ludlow, VP Chief Government, ENGIE Mexico, noted that “access to renewable energies is fundamental to making green hydrogen available. We also must factor in water supply, human capital and all the investment required to build the sector. Public finances will also play a key role in developing a robust ecosystem for projects to flourish in, as well as the need for strategic cooperation between government entities and the private sector.” 

Listing some of the strengths Mexico boasts to develop hydrogen projects on a large scale, Ludlow mentioned the sheer availability of renewable energy sources compared to other countries, the country’s strategic location and access to the US market where green hydrogen projects are already up and running as well as Mexico’s human capital, especially engineers and other technical experts well-versed in all areas of renewable energy. These three factors position Mexico favorably to become not just a producer but a large-scale commercial exporter of green hydrogen. 

Experts point out the initial capital investment required to develop a new market as a key barrier. Likewise, businesses require stability and assurance to invest in a young industry. Another possible obstacle is the water supply, an issue Mexico already struggles to manage. “As a country, we are already beginning to face water scarcity, and having different industries competing for the same natural resource is far from ideal,” said Ludlow. One solution to provide the necessary water to power green hydrogen projects is desalination. Ultimately, Ludlow believes it will be up to the government to define a national strategy for the development of green hydrogen.

Israel Hurtado, President, the Mexican Hydrogen Association, concurred that a national strategy to develop hydrogen must become a priority for Mexico. He also called for the use of industry-led technology roadmaps to carry out studies across different regions of the country. 

Such an initiative has already been lauded in the state of Tamaulipas, as Antonieta Goméz, President, the Tamaulipas Energy Agency, said. “We carried out a study assessing the potential use of green hydrogen in tandem with the German Cooperation for Sustainable Development (GIZ) with an eye on ultimately replacing fuel oil, given that Tamaulipas is the Mexican state that sees the largest amount of heavy transport via trucks. We are also the country’s second-biggest producer of energy. Reducing greenhouse gas emissions in Tamaulipas would therefore be highly beneficial for the public sector,” she continued, pointing toward the possibility for hydrogen to store electricity. 

Gómez also explained that the use of hydrogen as a fuel is nothing new, but what is innovative about green hydrogen is that it uses renewable energy to generate electricity. Like Ludlow, Gómez is concerned about the water green hydrogen uses, an issue that can be resolved via desalination plants. 

Gonzalo Azcárraga, Director General, SENER Mexico, a Spanish engineering company not to be confused with the energy ministry described green hydrogen as a “catalyst for future growth.” He added that the challenge ahead lies in substituting the polluting grey hydrogen, first for blue hydrogen, which is hydrogen produced from capturing as much as 90 percent of CO2 emissions from the combustion of natural gas, and eventually for zero-carbon green hydrogen. 

Azcárraga explained that innovation is required to make green hydrogen more commercially viable: “The most widely used technology to produce green hydrogen is alkaline electrolysis. However, new sources of production that allow for lower costs and greater effectiveness in the process should be studied.” He furthermore noted that his company is already developing more advanced electrolyzers to this end, as well as studying potential alternatives such as Proton Exchange Membranes (PEM) and new technologies to produce green hydrogen with less pure water. Ultimately, for green hydrogen to rival grey hydrogen and eventually natural gas, production costs must be made more comparable. “The company SENER is trying to evolve, collaborating with different institutions in both Mexico and Spain. One perhaps less-known technology we are developing is ion exchange. This is essentially a combination of the best aspects of alkaline electrolysis and PEM technologies.”Azcárraga and Hurtado agreed that the challenge lies in developing large-scale solutions that can be implemented as cheaply as possible. Hurtado highlighted the use of graphene in place of more expensive platinum as an example. 

“In terms of geography, located between two oceans and with an abundance of sun available, Mexico is a paradise for renewable energy. There is no reason why we cannot be one of the leading exporters of renewable energy to the world in the near future,” Azcárraga said, a point that Hurtado has frequently underscored. To achieve such a target, however, Mexico needs to improve infrastructure for the transport of ammonium and bioethanol as well as liquid or compressed hydrogen.

Hurtado pointed toward the characteristics of Mexico’s northwest: proximity to the border and abundant renewable resources position Tamaulipas, Coahuila and Nuevo Leon to become a hub for green hydrogen production. Hurtado also cited Oaxaca, with its ample wind resources and optimal location on the trans-isthmic corridor, as another region with huge potential for the production and export of green hydrogen to both Europe and Asia. 

Ludlow believes the private sector’s pursuit of more sustainable practices will be the anchor for the development of the green hydrogen market and its supply chains, creating the next generation of jobs in the energy sector and putting the necessary infrastructure in place. She cited Chile as an example of the difficulties presented by industry reorganizing and infrastructure repurposing. In a similar vein, Hurtado called for initiatives aimed at students and young professionals. “Talent strategies will have to change at academic institutions if they are to serve unique requirements of the green hydrogen industry,” he said.

Gómez described how oil and gas companies are already diversifying their portfolios in this regard. In terms of how to incentivize national hydrogen production, she pointed toward fiscal stimulus packages as well as other favorable government policies. “The countries which have advanced the most in terms of green hydrogen have adopted a clear national strategy and set out a roadmap to develop the sector. We have a huge opportunity now to coordinate hydrogen hubs across the country,” agreed Ludlow.

To conclude, Hurtado emphasized the potential of green hydrogen once again, as he detailed how the most recent international studies concur that green hydrogen production costs are expected to drop significantly this decade to a similar level as gray hydrogen, just as solar power has become much cheaper to produce in the past ten years.

Conal Quinn Conal Quinn Journalist & Industry Analyst