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We are witnessing a familiar pattern in renewable energy development once again — European advancements often pave the way for increased demand in the United States.
Written by Jacob Susman, CEO of Ambient Fuels
Recent months have seen numerous announcements of final investment decisions for green hydrogen projects in Europe. While the United States may appear relatively quiet, a surge in activity is on the horizon.
Throughout past cycles of new renewable energy technologies hitting the market, policy and business activities in the European Union have typically signaled future growth in the United States.
Some recent examples of hydrogen project activity in the EU include BP moving forward with a 200 MW project in Castellon, Spain, and a smaller 10 MW project in Aberdeen, Scotland. TotalEnergies has announced a 50% stake in the Oranjewind offshore wind project and plans to build 350 MW of electrolyzer capacity for hydrogen production. German utility EWE is investing in a 280 MW project in northwestern Germany, while Shell is progressing with a 100 MW project near Cologne. Other companies like Virya Energy, HyoffGreen, and Messer are also moving forward with projects in Belgium.
Why is the European Union moving quickly to harness the potential of green hydrogen in its decarbonization strategy, while the United States appears to be lagging behind?
This trend of Europe leading the way, followed by the U.S. catching up, has been observed multiple times as renewable energy technologies have evolved. Geothermal energy, wind power, PV solar, and energy storage have all followed this trajectory, even when the underlying technology originated in the U.S.
Geothermal energy: Early beginnings
Over a century ago, Italy made history with the Larderello Geothermal Power Plant, the world’s first utility-scale geothermal facility. This groundbreaking plant harnessed the Earth’s natural heat in 1911, setting the stage for global geothermal energy development.
Inspired by Europe’s success, the U.S. began exploring its geothermal potential, leading to the development of The Geysers Geothermal Complex in California in the 1960s. The Geysers later became the largest geothermal field globally, establishing the U.S. as a leader in geothermal energy.
Feed-in tariffs: Driving solar and wind adoption
Feed-in tariffs, which guarantee fixed payments to renewable energy producers for the electricity they generate, played a vital role in promoting renewable energy in Europe. Germany pioneered this concept with the 1991 Electricity Feed-in Law, inspiring other EU member states to follow suit.
Spain’s Electric Power Act of 1997 introduced generous feed-in tariffs to incentivize renewable energy production, particularly solar and wind power. This policy accelerated Spain’s adoption of renewable energy, positioning the country as a global leader in wind and solar energy capacity.
Although the U.S. did not implement national feed-in tariffs, many states adopted similar incentives through Renewable Portfolio Standards and tax credits, driving significant growth in renewable energy.
Growth of wind power in the early 2000s
Europe’s early adoption of feed-in tariffs supported the development of wind power, giving the region a head start. The U.S. initially lagged behind but caught up after passing the Energy Policy Act in 2005, which introduced the first investment tax credit for wind power. With the implementation of renewable portfolio standards, the U.S. rapidly expanded its wind power capacity, matching Europe in new installations by 2008-2009.
Photovoltaics: A global boom
Following Germany’s success with feed-in tariffs, the country emerged as a leader in solar photovoltaic technology in the early 2000s. Germany’s support for solar energy drove down costs globally, making solar power more accessible.
The U.S. followed suit, experiencing significant growth in solar PV installations, particularly in states with abundant sunlight. By the late 2000s and 2010s, the U.S. solar industry flourished, supported by state incentives and federal tax credits.
Green hydrogen will be next on this path
The recent surge of green hydrogen projects in Europe provides valuable insights for the U.S. as it develops its own industry. These initiatives, backed by major energy companies and supported by robust policy frameworks, highlight the technological advancements driving green hydrogen growth across Europe.
Europe’s success in green hydrogen stems from strong policy frameworks offering financial incentives, regulatory support, and clear targets for hydrogen production and use. The U.S. is beginning to adopt similar policies, with initiatives like the Inflation Reduction Act providing tax credits for green hydrogen production. Continued research and development efforts aim to reduce costs and enhance efficiency in hydrogen technologies.
While the U.S. is still in the early stages of developing its green hydrogen industry, lessons from Europe’s advancements indicate a promising future for renewable energy in the country.
The green hydrogen industry is gearing up for its opening day, and it’s almost time to hit the ground running. Unless you’re a Mets fan, now is not the time to throw in the towel – it’s time to assemble your winning team.
The final framework for green hydrogen qualification is crucial, and it’s no surprise that investors are hesitant to make a move without clear rules in place. But fear not, as those rules are on the horizon, and the season is just beginning. We will be prepared.
As we eagerly anticipate the developments in the green hydrogen industry, it’s important to stay informed and ready to seize opportunities as they arise. Stay tuned for more updates and be part of the exciting journey towards a sustainable future.
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