Taiwan weighs hydrogen future amid renewable energy hurdles

Vyra Wu, DIGITIMES Asia, Taipei 0

Credit: AFP

Hydrogen is a critical decarbonization vector and can connect and reshape current power, gas, chemicals, and fuel markets.

Partnerships and collaborations are crucial elements for the success of hydrogen endeavors, transcending individual companies and spanning industries and geographies. According to statistics from the Hydrogen Council and McKinsey, estimates of the total required investment are around US$7 to 8 trillion across the hydrogen value chain through 2050, generating about US$3 trillion in revenue in 2050 across the hydrogen economy.

According to Olivier Letessier, president of Air Liquide's Far East, for Taiwan to realize its ambitions in the burgeoning hydrogen economy, it must first overcome a significant obstacle: a lack of renewable energy sources.

As a world leader in industrial gases, Air Liquide's involvement in the hydrogen ecosystem encompasses advanced technologies for hydrogen production, storage, and delivery. Instances include innovative electrolyzer technology implemented in Canada and the management of hydrogen stations in Japan.

While global players like Japan, South Korea, and China have raced ahead on hydrogen, Taiwan is taking a more cautious approach as it grapples with boosting renewable power generation. "For this to be successful and move to the next step, we need renewable energy to produce low-carbon hydrogen. One of the challenges in Taiwan is to develop enough renewable energy."

Credit: Hydrogen Council and McKinsey

Credit: Hydrogen Council and McKinsey

In a net-zero world, demand for clean hydrogen could reach approximately 660 million metric tons (MT) in 2050, making up 22% of the final energy demand globally. Hydrogen has emerged as a potential green energy vector that could help nations and industries decarbonize.

When derived from renewable sources like wind or solar, hydrogen produces no direct carbon emissions when used in fuel cells or burned. Major economies are investing billions to develop hydrogen supply chains and technologies.

Taiwan, a manufacturing powerhouse for semiconductors and electronics, could play an integral role in that hydrogen supply chain, according to Letessier. With its vast experience in advanced manufacturing, he says Taiwan is well-positioned to produce key hydrogen components like electrolyzers, fuel cells, and membranes.

"The reputation and skills Taiwan has developed over the years in manufacturing will put it on the map as a destination of choice," Letessier said.

However, before those opportunities can be realized, Taiwan must find a way to scale up renewable energy production from sources like offshore wind. Only then can it start using that clean power to produce low-carbon "green" hydrogen through electrolysis.

Some promising transportation use cases could involve high-utilization commercial fleets like trucks and taxis, rather than personal vehicles, Letessier noted. However, regulatory reforms may also be needed - current Taiwanese rules cap hydrogen storage at 200 bar of pressure, inadequate for long-range mobility.

Cooperation between government and industry will also be critical, mirroring past energy transitions, Letessier said. Potential policy levers include subsidies for investments in hydrogen, as well as taxes on carbon emissions to make alternative fuels more cost-competitive.

For Taiwan's hydrogen ambitions to take flight, renewable energy - currently less than 10% of its power mix - will be the critical first step.