Ukraine can become a reliable supplier of green hydrogen to the EU

Ukraine can become a reliable supplier of green hydrogen to the EU

Hydrogen production in Ukraine can become a key tool for Ukrainian and European independence from russian energy resources, and the rapid transition to the use of “green” energy. For Ukraine, it is also a chance to become the main energy supplier of “fuel of the future” for Europe.

According to pre-war estimates from the International Renewable Energy Agency, Ukraine has the capacity to install more than 320 GW of wind and 70 GW of solar power. This does not include an assessment of the potential for installing wind and floating stations in Crimean waters, which, according to the World Bank, could add more than 250 GW. Thus, the total capacity of renewable sources can reach 415 GW installed capacity within 10 years, and with the Crimean capacity over 700 GW.

What is hydrogen for?

The problem of such renewables potential, is that this energy needs to be distributed and used immediately, which is almost impossible. This is where “green” hydrogen comes in handy. Renewable energy, which can be used in unlimited quantities, helps to break down water into hydrogen and oxygen. The result is “green hydrogen”, which can be stored, transported, and widely used in various fields. That is why the active development of hydrogen production is a necessary condition to achieve “Net zero 2050” (the goal of carbon neutrality). Hydrogen is already used in a number of sectors, including energy, chemical and agro-industries, transport and more. Ukraine’s place in the development of hydrogen production in Europe The European Union sees Ukraine as an important partner not only for ensuring the region’s energy independence and stability, but also for achieving the goals of carbon neutrality.

That is why the following strategic documents at the EU level contain plans for Ukraine:

• The hydrogen strategy for a climate-neutral Europe of 8 July 2020, where Ukraine is identified as a priority partner.

• Green hydrogen for the European Green Deal is a 2 × 40 GW initiative, according to which Ukraine will have 8,000 MW of electrolytic capacity for green hydrogen and 1,800 MW for ammonia by 2030

• Green Hydrogen Investment and Support Report, according to which Ukraine needs an investment of 20.1 billion euros to build capacity for an electrolyzer with a capacity of 10,000 MW

An important factor is the presence in Ukraine of one of the largest gas transmission systems in the world. Given that hydrogen can be mixed with gas for transportation, this makes it possible to use the cheapest method of delivering hydrogen from Ukraine to Europe, of course, the network requires significant investment and time for modernization. At the same time, Ukraine has significant water resources and high solar and wind potential, which are necessary conditions for the production of green hydrogen.

World trends

According to McKenzie, demand for electricity will triple by 2050 as economic sectors become electrified and hydrogen-based fuels increase their market share through decarbonization. Renewables are expected to account for 80-90% of the world’s energy balance by 2050. Demand for hydrogen will increase 3-7 times by 2050, and green hydrogen will provide 28% of electricity demand by 2050. Also, according to a study by FDI Intelligence, by 2035, annual investment in energy supply and production will double to 1.5-1.6 trillion US dollars. Almost all the growth will be due to decarbonisation and electricity technologies, which by 2050 will exceed the current level of investment in the energy sector. EBIT of decarbonisation technologies and electricity companies is expected to grow by 5% per year and may outpace investment in traditional energy.

Recently, despite the war, UkrHydroEnergo and tGerman companies “Andritz Hydro” and “MAN Energy Solutions” signed a memorandum of cooperation in the production of green hydrogen in Ukraine. So far, the partnership focused on a pilot project to install an electrolysis plant for the production of green hydrogen at 1 MW, and approximately the production of 100 kg of hydrogen per day. But we already see positive steps for the future of energy.

Of course, despite the potential and a number of necessary factors, the development of the industry still requires significant investment, a favorable business environment, and a high level of international partnership. Combined with comprehensive energy efficiency and renewable energy measures, large-scale hydrogen production and use in Ukraine will decarbonise its energy sector, as well as transport, processing and many other industries, and become an important element of the European energy system. This will help strengthen intersectoral ties and form stable clusters in the economy, intensify innovation and investment activities, create new jobs, increase the competitiveness of Ukrainian enterprises, promote Ukraine in the world rankings to significantly improve the investment climate.

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