(MENAFN- AzerNews) By News Centre
Azerbaijan is uniquely equipped to successfully develop a green
hydrogen industry and may soon supply the EU with the
climate-friendly fuel.
The prolific Caspian fuel exporter is expected to soon export
green hydrogen gas to the EU, according to Vladimir Rogov, a
Managing Director and Partner at Boston Consulting Group (BCG)
based in Baku, Azerbaijan.
Azerbaijan has“a unique combination of all components needed
for the development of the hydrogen sector,” said Rogov.“There are
natural resources, infrastructure, and the end-consumer all in a
compact geography. The potential of Azerbaijan's renewable energy
resources is extremely high, ensuring a strong competitive
advantage, namely, the low cost of green hydrogen production.”
Green hydrogen is a type of hydrogen gas that is produced
through the process of electrolysis, using renewable energy sources
like wind or solar power to split water molecules into hydrogen and
oxygen. This process produces hydrogen gas without emitting any
greenhouse gases or pollutants, making it a clean and sustainable
form of energy.
This is opposed to grey hydrogen and blue hydrogen. Grey
hydrogen is the most common way to produce hydrogen today and
involves using natural gas as a feedstock and emitting carbon
dioxide as a byproduct. Blue hydrogen captures and stores the
carbon dioxide emissions from the production process, preventing
them from entering the atmosphere. While blue hydrogen is still
produced from natural gas like grey hydrogen, the captured carbon
dioxide can be stored or used in other industrial processes,
reducing its environmental impact.
“In terms of profits, the country could earn from $230–500
million per year, given the expected hydrogen price decrease in
Europe nearly twice, from current around $11 to $5.8/kg. Thus, the
full cost of the green hydrogen delivered through the pipe can be
very competitive and can allow for substantial margins,” said
Rogov.
In addition, the major advantage for the Azeri hydrogen industry
is the pipeline infrastructure that currently already carries
natural gas to Europe. The Southern Gas Corridor, operational since
2020, is a vast series of pipelines that carry 10 billion cubic
meters of gas per year through Turkey, Greece, and Albania to a gas
terminal on the Adriatic coast of Southern Italy. This route is far
more efficient than transporting hydrogen gas overseas, in which
case it must be liquefied for storage to later be regasified.
For Europe to meet the goals of Paris 2050, the continent will
have to spend trillions in boosting renewable energy, and broader
decarbonization efforts. According to McKinsey & Company analysis,
reaching net neutral status by 2050 would cost the continent
roughly €28 trillion over the course of the next 30 years.
“To reach net zero by 2050, low-carbon hydrogen is a novel
option to decarbonize industries with hard-to-abate emissions, such
as basic chemicals, aviation, steel production, freight and road
transportation, and shipping,” said Rogov.“Governments and
companies will have to invest approximately $6 trillion to $12
trillion between 2025 and 2050 to produce and transport enough
low-carbon hydrogen to meet demand, according to BCG's
calculations.”
Some activists in Europe fought against their government buying
Azeri gas because of the Azerbaijani government's history of
repressive and authoritarian behavior. For example, activists and
journalists are regularly prosecuted and imprisoned on false
charges. A 2017 joint investigation by more than a dozen media
outlets uncovered a complex money laundering scheme dubbed the
'Azerbaijani Laundromat', which sought to launder around $2.9
billion in order to pay European politicians to whitewash
Azerbaijan's international reputation.
Boston Consulting Group previously collaborated in the world's
largest green hydrogen initiative, a 1.3 gigawatt electrolysis
facility in Denmark, to be funded by Danish renewable energy firm
Orsted and supported by several other industry leaders.
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