The Five Key Requirements for Scaling Up Green Hydrogen Production

The International Renewable Energy Agency (IRENA) has set an ambitious target of 491 million tonnes (Mt) of green hydrogen (GH2) production by 2065, a goal that aligns with the 1.5°C scenario for global temperature rise. However, achieving this target, especially in countries of the Global South, presents significant challenges. These challenges include inadequate infrastructure, lack of regulatory frameworks, financial incentives, skills development, and policymaking experience. This article explores five key requirements for upscaling green hydrogen production, drawing insights from various countries' experiences, including Namibia and Trinidad and Tobago.

1. Development of Renewable Energy Infrastructure

For countries like Trinidad and Tobago, transitioning from grey to green hydrogen production requires a massive increase in renewable energy capacity. This necessitates substantial investments in renewable energy sources like wind and solar power. For instance, Trinidad and Tobago's ambition to produce 4 Mt of GH2 annually by 2065 will require installing 57 GW of offshore wind power, a significant leap from its current capacity.

2. Establishment of a Supportive Regulatory Framework

A stable and transparent regulatory environment is crucial for attracting investments in green hydrogen. This involves developing national hydrogen strategies (NHS) with clear guidelines for the hydrogen value chain, future regulations, and defined roles for government bodies. For example, setting up frameworks for long-term land allocation, developing technical standards, and creating national green financing systems are essential steps in this direction.

3. Attracting Investors through Risk Mitigation

Investors face technological, political, and commercial risks in green hydrogen projects. Governments can play a pivotal role in mitigating these risks, especially in countries with low investment ratings. This can be achieved by establishing long-term and transparent regulatory frameworks, participating in the development of new standards, and aligning national regulations with international practices.

4. Creating One-Stop Shops for Investor Support

One-stop shops can significantly enhance a region's attractiveness for foreign direct investment (FDI). These shops streamline processes for investors by consolidating information, permits, and services, thereby reducing bureaucratic hurdles and saving time. They also offer comprehensive assistance, from regulatory compliance to identifying local partners. Namibia’s Investment Attraction Office (IAO) is a prime example of a successful one-stop-shop.

5. Fostering Local Skills and Technology Development

Developing local skills and technology is crucial for the sustainable growth of the green hydrogen industry. This involves not only the local manufacturing of electrolyser components but also training and development programs to build the necessary workforce. Policies promoting local content in green hydrogen production and operations & maintenance (O&M) can stimulate local industry and technology development.

Conclusion

The transition to green hydrogen is not just a technological shift but a comprehensive transformation requiring strategic planning, regulatory reforms, investment attraction, and skills development. Countries in the Global South, like Namibia and Trinidad and Tobago, exemplify the diverse approaches needed to meet IRENA’s ambitious GH2 production targets. By focusing on these key areas, countries can accelerate their transition to a sustainable, hydrogen-fueled future, aligning with global climate goals and fostering economic growth.