Green Giants – Episode 22

Tackling the Last Mile of Decarbonization: Ana Quelhas on Hydrogen’s Role at EDP Renewables

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Transcript

Wes Ashworth (00:24)

Welcome to another episode of Green Giants, Titans of Renewable Energy. Today, I’m excited to have Ana Quelhas with us. Ana is the Managing Director for Hydrogen at EDP Renewables, where she leads the company’s strategy for the renewable hydrogen business. With a wealth of experience across energy planning, consulting, and international markets, Ana has worked both in Europe and the US, shaping the future of renewable energy. Ana, it’s a pleasure to have you on the show.

Ana Quelhas (00:49)

Likewise, thank you very much for having me.

Wes Ashworth (00:51)

Absolutely a pleasure. So we’ll start out with a little background. You’ve had a very impressive career in the energy sector. Can you share just a bit about your journey and then how you became involved in the hydrogen business?

Ana Quelhas (01:03)

Sure. Actually, before being dedicated to the hydrogen business, I was already with the company, with EDP, and I was in charge of the energy planning team. So the energy planning team is really a small group of people that looks after the long-term understanding of the markets, how they will evolve, setting the vision on the regulatory context, the policy tools, the technologies also, but the markets in particular. So really understanding how the commodities will evolve, fossil fuel commodities, CO2 pricing and ultimately the power market. So it’s a lot of modeling and analytical effort in trying to understand the supply and demand and ultimately the prices that will lead the market.

So within this responsibility of long-term planning, of course back in 2018-2019, everybody started talking about hydrogen so it was very clear for us that we needed to really focus and do a deep dive on the topic and understand the opportunity, also with those within my responsibilities of energy planning I had the responsibility of leading that internal reflection to understand the opportunity that hydrogen could bring to us. So at the time we were confronted with different leads that came to us through different doors, from the innovation angle, the commercial side of the business, the renewables, the conventional generation, and we didn’t have a clear understanding of the opportunity and really a definition of our strategy to deal with those opportunities.

So, after understanding the size of the market, understanding the competence that a company like EDP has to put at service to the hydrogen, it was very clear to us that we had some skills and also actually some assets that we could put at service. So it was really an opportunity for growth and to add value for our renewable development, but we needed to organize ourselves and create a dedicated team to start originating those growth opportunities. So that was when we created, really the hydrogen business unit.

And so it was a natural move in terms of career and professional development for me to transition from the energy planning team to lead this effort of putting together the team and started to define the strategy and our priorities in terms of markets and applications for the hydrogen business.

Wes Ashworth (03:39)

Yeah, no, perfect. And I know during that time and over the past years, EDP has made significant strides in the energy transition, moving away from fossil fuels to focus on renewables. Can you talk about the role hydrogen plays in the transition and how it complements your existing renewable energy portfolio?

Ana Quelhas (03:59)

Sure, so EDP, for those of you that are not so familiar with the company, it was born as the incumbent utility in Portugal, so that was more than 40 years ago. Since then, we’re present in roughly 30 markets around the world, so with a very strong presence in the North American market, with headquarters in Houston, in Europe, the European market, also in the South American market, Latin America, with the headquarters in Sao Paulo, and in the Southeast Asia and in Singapore.

We’ve been growing our business solely focused on renewables, but we still have some legacy assets, namely coal power plants and natural gas power plants, combined cycle power plants, that we are clearly phasing out and commissioning those activities and transitioning into a fully renewable business. So we have the goal to by next year be completely out of coal. That means that most of our power plants are either already closed or in the process of being closed or transition to other technologies. And by 2030 to also be fully renewable, meaning phasing out also our natural gas operations. So when it comes to the coal power plant sites, the reality is that all of our coal sites are located in areas, in regions where everything comes together for the development of renewable hydrogen hubs. We have like, not just we have the land, of course, we have an existing land, an existing site with infrastructure that we can repurpose and that we really need for the hydrogen, like grid access, access to water, in some cases desalinated water as well, and it’s an industrial site and our neighbors are all the good candidates to offtake hydrogen because these are plants located in heavy industrial areas, so our neighbors would be the petrochemicals, the refineries, the steel makers, which should be the targeted offtake consumers for for hydrogen in the first place.

Apart from that, our coal sites, most of them are also located on port areas because these coal power plants used to work with imported coal. So these are also a very good added value for the development of hydrogen projects because although we have neighbors that can offtake the hydrogen for longer term and for follow-up phases where we can scale up the projects, we have the opportunity also to take advantage of the nearby ports and port infrastructure to export the hydrogen or its derivatives to other markets. Finally, which is not a minor factor, we have been with these communities for decades. And we employ hundreds of people in these locations that were dedicated to the operation of the coal power plants. So the fact that we’ve been with these communities for decades means that the communities really take us for serious, everybody knows the company, what we’ve been doing for four decades and we employ, like I mentioned, a lot of people that actually most of them, some of them we can repurpose and not just the assets but also the talent and the human skills repurpose and retraining towards the hydrogen business.

Wes Ashworth (07:46)

Yeah, it’s incredible. It’s such a great strategic thing and it makes total sense to be able to transition those over, repurpose it. And really from the operation to the location to the people, as you said, like all coming together, like that’s a wonderful story. And so you mentioned before too, like EDP has launched pilot projects in Brazil and Portugal to really explore hydrogen’s potential.

Can you provide some more details about the projects and what you hope to achieve through them?

Ana Quelhas (08:15)

So when it comes to hydrogen, just to make sure that everybody has this clear, we are solely dedicated to renewable hydrogen, meaning the lily hydrogen produced with renewables, because this is really our strength. I mean, hydrogen is new for us, as it is for most of the utility companies and renewable developers that are creating opportunities for growing in this space. What we really know how to do is the renewables, and renewables represent two thirds, sometimes even more, of the cost to produce hydrogen, so really, you know, learning and knowing how to do this part of the value chain and mastering the electricity sourcing is our strength. And so we will be playing with a large portfolio of renewables, complementary technologies, and even in some cases, like it is the case of the Iberian market, also in Brazil, with the large hydro bases that we can also play with.

So these are like the competences that we have and the way we are approaching the renewable hydrogen business. When it comes to the stage where we are at, today we don’t have a single commercial project already in place operating. What we do have is pilot projects, meaning without commercial components, so we’re not selling the hydrogen. And the first pilot project, like you mentioned, was a project that we started operating at the end of 2022 in Brazil, and we have another one. They are both 1.25 megawatts, so small scale, but still first of a kind in both markets. We’re also putting together and going through the commissioning phase of another pilot project here in Portugal, where I’m based. Both of these pilots, like I said, we’re not selling the hydrogen, but we are using or we will be using the hydrogen ourselves in fossil fuel based power plants. In the case of Brazil, it’s in the coal power plant. In the case of Portugal it’s in a CCGT, combined cycle power plant. In Brazil we’re using the hydrogen to replace fossil fuels for the ancillary consumption of the plant. And here in Portugal we’ll be testing the flexibility of the turbines with a mixture of hydrogen into the natural gas.

So these are, like I said, small, but still a very sizable project compared to what exists in the market and really at the stage where we are, more than the size, it’s a learning experience, almost the same learning you get from doing kilowatt based or double-digit megawatt. It’s the first we’re doing that, so we’re learning from the technology aspects, we’re going through the pains of doing this first of a kind project in the different markets. Even for the authorities with whom we deal with, this is the first time they have to approve and give permits to this kind of project, so it’s a learning process in many different fronts.

Wes Ashworth (11:25)

Yeah, it’s so critical though in paving the way and helping to really start that as you said, it is still really a newer industry. And there’s a lot of time and effort that still needs to go in and to making it scalable and commercial and those sort of things as well. And a couple of things that you hit on there, I think early on to make the distinction between renewable versus non-renewable hydrogen is a really important one. I think sometimes maybe those that aren’t in the industry aren’t as tied in sort of just lump it all together, you know, and to be clear, as you said, we’re talking about renewable hydrogen, which you can get into a little bit as we go in terms of maybe some of the differences and some of the misconceptions. So you mentioned, obviously, it’s not to commercial scale yet, where you’re not selling the hydrogen, you’re just using it internally.

What does that look like in terms of just what’s next? Do you expect commercial scale projects to be coming soon or is it in the works or what’s the plan and vision there?

Ana Quelhas (12:23)

I mean, we ourselves have a large portfolio of renewable hydrogen projects, both in Europe, especially in Spain and in Portugal, and also in the US. But our most advanced projects are really in Spain and in Portugal, where we have projects between 5 and 150 megawatt scale in advanced stage of development. And when I say advanced stage of development, I mean with, of course, land secured grid connection, environmental licensing for these large-scale projects, we already have environmental approval, and an off-taker identified. So apart from that, we have also secured around 400 million euros of public funding for these projects through different channels and different funding instruments, both at the national level and also at European level.

So again, once we sign these funding agreements with the public entities, we’re also on a calendar to deliver certain milestones. So in terms of the technical maturity and financing, we are well advanced on this project. I really hope to be able to get all the pieces of the puzzle, especially those that are still missing, mainly related with the agreements with off-takers, soon to be able to reach final investment decision in the next months for these most advanced projects that we have in Spain and in Portugal.

Wes Ashworth (13:59)

Okay, yes, they’re fairly soon, which is great to hear. One other thing we hit on is you highlighted the hydrogen market in North America, maybe progressing a bit slower than anticipated. What are some of the main challenges you’re facing? And then how does this compare to your experiences in Europe?

Ana Quelhas (14:17)

Yeah, sure. So it’s true that in general, the hydrogen quick start of this market or economy is taking much longer than initially expected. It’s also the case here in Europe, but still, when we compare the European market with the North American market, I would say that we are more advanced here when it comes to the time to market and to actually deliver those projects. In the US, the past year has been extremely slow, and this is mainly related with uncertainty around the regulatory framework and in particular lack of visibility on how to capture the PTC, the production tax credit, which will be a major instrument to help start the economy in the US. So, you know, the IRA allows for the introduction of this production tax credit, which is a fiscal tool that will pay up to three dollars per kilogram of hydrogen for a period of 10 years. This is a maybe a very effective tool to really support the projects, initial projects and help if not close the funding gap against the alternatives. But we still lack understanding of exactly the rules of the game. how you need to set up your project if you’re connected to the grid to actually capture the most of the PTC.

It’s very technical and very detailed, but the reality is that if your electrolyser is directly connected to renewables, I mean, there’s no doubt that the hydrogen that you’re producing is renewable hydrogen. The question comes into play when your electrolyser is connected to the grid. Then if the grid is dirty enough, you’re actually much worse off by producing renewable hydrogen than the alternatives when it comes to decarbonizing. So we really need to have a very sound policy in place and definition of what it counts as renewable hydrogen and the rules. In Europe, it also took us almost two years to come to that definition through a piece of legislation that is called the Delegated Act.

But now we have a clear understanding of those rules when it comes to additionality, the need for new renewables, time correlation, matching, temporal matching between renewable production and hydrogen production, and the geographical correlation. So these are the three main factors that we need clarity to really understand how to then set up the projects, design them technically as well to be able to maximize the funding opportunity that is brought to the hydrogen through the production tax credit. So until we have that clarity, of course, the industry is a bit on a pause in the North American market for renewable hydrogen because the rational thing to do is to wait for clarity before making any decisions and commitments.

Wes Ashworth (17:32)

Yeah, no. And I know that’s a big piece of it. And I think the most fundamental thing is that clarity and getting that clarity to be able to move forward. I think the other side of it beyond clarity is just a little bit of, I think there are some misconceptions, there’s confusion around hydrogen and its applications. Even if you just Google search and go, which is probably what the most common person does, there’s just a lot of things that pop up and just, why hydrogen isn’t good and all these sort of things. I want to get to that a little bit and hear your thoughts on this as I know is, the more you get informed, it is a key, it is a very important piece of the puzzle. So there is a lot of that discussion around hydrogen’s role in decarbonizing industries.

And then I would love to hear from you, what are the specific applications of hydrogen that you believe really do hold the most promise? And maybe why should hydrogen not be democratized across all fossil fuel uses?

Ana Quelhas (18:28)

That’s a very good point because another misconception and a little bit against what you were describing is a belief that hydrogen is a silver bullet and good for everything and will help decarbonize everything that we cannot do otherwise. And the reality is that in concept and in theory, in physical terms, renewable hydrogen can pretty much replace all the fossil fuel consumption that we have today. But it shouldn’t, like I said, it should not be democratized because a lot of that fossil fuel consumption that we have today, it’s better tackled through energy efficiency measures, through circular economy and through renewables, through direct electrification.

That’s the case, for example, for low temperature heating, space heating, that’s the case for light duty vehicles, so mobility within the cities. So these are clear, you know, consumptions that most of it today is fossil fuel based and we should not be targeting hydrogen or its derivatives as a means to decarbonize but rather directly electrify through heat pumps, through batteries and other technology that we have readily available and are much more efficient and also in terms of not just technically but cost efficient to decarbonize.

So hydrogen and clean hydrogen, renewable hydrogen in particular, it’s very expensive. Actually that’s why there is no hydrogen market today because clearly it’s not competitive against the alternative forms of producing hydrogen, the gray hydrogen, and it’s not competitive against natural gas or other fossil fuels that hydrogen can replace.

Because it’s very expensive and also it’s actually very inefficient, the process is still very inefficient technically to produce hydrogen, so we should really save it for the last mile of decarbonisation. It only makes sense for us to be discussing renewable hydrogen if we have this firm belief that we need to fully decarbonise. And it’s for that last mile of the full decarbonisation of our economy that we require renewable hydrogen. So the low-hanging fruits will be, of course, the consumption that today is already in hydrogen form. So this is basically the hydrogen that is used as a feedstock in refineries and for ammonia production.

So I say that clearly this would be the first priority application is a plug and play is just replacing gray consumption by low carbon consumption of hydrogen. And after this plug and play first tier type of consumers, then we should be targeting heavy industries, like the steelmaker for example, where we don’t foresee better alternatives to decarbonize. And also transportation, but in particular, maritime and aviation, where again, direct electrification, may not be the route. So this should be the target and policies should be designed accordingly. I mean, policies should really make sure that the value is not the same in all applications and we should prioritize those that bring the highest value when it comes to decarbonizing our economy.

Wes Ashworth (22:09)

Yeah, and I want to pause here for just for half a second just to clarify. Most of the listeners maybe understand the difference, but I just want to make sure we put it out there. In terms of gray hydrogen versus renewable hydrogen or green hydrogen, can you just spend a second or two just explaining the difference and just make sure that we’re all on the same page and everybody has an understanding there?

Ana Quelhas (22:33)

Sure, so gray hydrogen is the hydrogen that is produced today. Today, to produce hydrogen, we basically use a steam reformer of natural gas, so we use a fossil fuel to produce hydrogen. And it’s done mainly in a captive form, meaning that hydrogen is produced locally and consumed locally in refineries and in the ammonia production, as I said before, and it’s a feedstock, it’s not an energy vector. When we look at the energy mix, hydrogen has no expression on the energy mix whatsoever. And so, if we need to fully decarbonize our economy, we need to change the way we produce the hydrogen that we produce today as a feedstock, and also we may utilize hydrogen and its derivatives to replace fossil fuel consumption that we have today as an energy vector. So hydrogen will have these two different main categories of application as a feedstock as it is today and new applications, new forms as an energy vector, replacing fossil fuels in the transport sector and replacing fossil fuels in industries.

Wes Ashworth (23:56)

Yeah, thanks for that explanation and just again, want to just make sure that was clear out there. Another thing you hit on there was just the importance of policy and regulation. So I mentioned the importance of policy tools and regulatory frameworks and ensuring hydrogen success. So what are the key policy elements that you believe are necessary to prevent the misuse of hydrogen and to just ensure its role in decarbonization?

Ana Quelhas (24:21)

So like I said before, hydrogen is extremely expensive. It’s not competitive against the alternatives, that’s why there’s no market. So we need to create, we have this common understanding that we need to create the market. It’s pretty much like what happened with renewables 30 years ago, so renewables in the power sector, right? So there was this understanding that renewables, we would have to incorporate renewables in the power mix to replace fossil fuels, but they were much more expensive than just burning natural gas or coal, even with CO2 pricing.

So because there was this understanding that there was no market for renewables, we needed to design policy tools, in particular funding mechanisms to promote the renewables, to get the skill required for the sector then to learn and to actually then reduce costs as we learn. Today, I mean, there are no, most markets, there’s no better alternative to produce electricity, more competitive than a renewable based solution, either wind or solar. So the same is happening with hydrogen today.

It’s not competitive, so we need to recognize that and then design policies accordingly. When it comes to the hydrogen, it’s much more complex and the entire value chain is much more complex than just renewables in the power sector, so there’s no silver bullet. We really need a comprehensive policy supporting the scale up of hydrogen to get the costs down. And we need this comprehensive policy together with the regulatory framework and funding mechanisms targeting the production, but also the consumption and the infrastructure. So when it comes to the production, it’s essential to have a clear taxonomy, so a clear definition, and again comes back to what is required to really have the renewable attributes of hydrogen. So we need that clarity and we need not just to support the CAPEX, as most of the funding mechanisms in Europe target CAPEX, but we also need to support OPEX, at least in the initial phases, has an instrument like a PTC in the US will do, or the hydrogen bank here in Europe is also doing.

We cannot forget the demand side of it, and the demand has been the weakest link here on hydrogen. But we really need to understand that we need policies in place also targeting the demand, prioritizing the uses, maybe including some mandates or obligations to consume as we have in the renewable energy directive, but also supporting the acquisition and the conversion of equipment to consume hydrogen. Of course, CO2 pricing is also a very powerful tool. It’s not complete, but it also contributes to align the incentives and increase the competitiveness of renewable hydrogen. At the end, we would like to mention infrastructures because there’s no logistics in place for the storage, transport and distribution of hydrogen. Like I said before, most of the hydrogen today is produced in the site where it is consumed, so there is no infrastructure in place.

I totally believe that in the beginning the hydrogen economy will start in a decentralized form, again with the production close to consumption because there are many different good sites where you can produce renewable hydrogen and consume locally, but it has the potential longer term to be a commodity traded internationally and also through its derivatives. And so it’s required to also put in place and promote the development of an infrastructure for the longer-term scale-up of the economy. When it comes to designing policy tools, we should also make sure that we do it right when it comes to the impact in society, and we do adjust the location of the effort and make sure that at the end we don’t over-penalize in particular, electricity consumers, which is actually very easy to see ways that the renewable hydrogen can disproportionately be penalizing electricity producers just because electricity is the main input for the renewable hydrogen.

We also, and policymakers need to make sure that we do this with the socially just location of the costs of the transition. And finally, international coordination is extremely important when it comes to harmonizing not just standards, technical standards, but harmonizing the language, the definitions, to make sure that we can facilitate international trade and we all have a common understanding of the products.

Wes Ashworth (29:37)

Yeah, no great perspective there and insight in terms of the policy and regulation side. And I want to transition back a little bit to where we touched on just industry awareness and education and I think some of the public perception out there. So I do see a general lack of awareness about hydrogen among the public, which we touched on and sometimes even within the industry. So what do you believe are the biggest misconceptions about hydrogen and how can we better educate people on its benefits and limitations?

Ana Quelhas (30:04)

Well, I think it’s normal that there’s a generalized lack of understanding about hydrogen. I also mentioned before this perception that hydrogen is good for everything and it will solve all of the problems. So we really need to educate policy makers, regulatory authorities, but also local communities about the true value that hydrogen can bring as a means to decarbonize, so as an instrument for environmental and energy policy, but also as a very powerful industrial policy tool. Because hydrogen and renewable hydrogen can really have a tremendous influence in shaping international trade of semi-final goods that today are produced in a certain way and in certain locations because of the fossil fuel inputs and with renewables the picture may change drastically when it comes to international trade and the flows of international trade and this has influence to the creation of jobs, local jobs and the creation of wealth in certain regions. So it’s a comprehensive education and knowledge that we need to share with communities, with all agents in societies. And of course there will always be fears for lack of understanding. So it’s really a question of educating and informing everybody that is involved.

I mean, even for the traditional renewable projects, we always face local opposition or some concerns about the project. So we are very used, for decades, to do this education with local communities, involve them and really explain the benefits of the different projects that we bring on the ground.

Wes Ashworth (32:23)

Yeah, and I think some of those bigger concerns, one we talked about, I think there’s a lot of misconceptions out there around, it’s really not a good solution. if it’s done in terms of gray hydrogen production. And I think that’s the importance of distinguishing between the two. There is a renewable, there is a green way to produce hydrogen, which I think solves that concern.

One of the other things I think you see pop up a lot is safety, due to the fact that hydrogen is explosive in nature. So I’m curious to hear your thoughts on that. How is  EDP addressing these concerns in your projects? But generally, if you just want to speak to that concern, I’d love to hear that as well.

Ana Quelhas (33:07)

Sure, I guess it’s also part of education and informing people. Of course, hydrogen explodes and that’s a major concern. But it’s in general much safer than conventional fossil fuels and people are generally very comfortable on our daily basis. We deal with gasoline and diesel at the pump and we do that without even thinking about the dangers behind it, which are, you know, that produces that much more flammable and dangerous than the hydrogen. So of course we need to treat hydrogen with respect, but we also need to understand that hydrogen is much lighter than air. It’s 14 times lighter than the air.

So it quickly disperses into the atmosphere, whereas a liquid fuel like gasoline stays on the ground level so if there’s an accidental ignition it’s much more dangerous with the liquid fuel than with hydrogen but of course we cannot smell, we cannot see the flame and we cannot taste hydrogen so this is an additional concern we cannot eliminate all risks but we need to understand them and like I said before treat hydrogen with respect.

Wes Ashworth (34:31)

Yeah, I love that. Treat it with respect, but again, to your point, it’s like we deal with this on a daily basis with gasoline and other flammable substances that are in our environment that we use. So it’s nothing new. And I think that’s maybe the misconception. People think it’s like, it’s significantly worse or things like that, but it’s not, as you just mentioned. So that’s great. And I would love to hear just your thoughts on the future of hydrogen, you know, looking ahead.

What’s your vision for hydrogen’s role in the global energy landscape over the next five to 10 years? And if that’s too close, maybe 10, 20. How do you see the industry evolving? And what are the key milestones you hope to achieve with EDP Renewables?

Ana Quelhas (35:11)

So we’re here for the long term. This is not a sprint, this is really a marathon. We’re here really for the long term. That doesn’t mean that we don’t need to start now and there’s no urgency. There is urgency, we need to start now. But this is taking a long time. There are still many, many challenges to overcome. Market, technology aspects, regulatory, like I mentioned a lot. So there are still many challenges to overcome, but in the next five years,

Hopefully we will be able to see some of these initial but commercial scale projects delivering hydrogen, renewable hydrogen in a decentralized form. So I don’t think for sure in the next five years or even by the end of the decade we will not be able to have a traded commodity with a very clear price discovery and just everybody buying and selling hydrogen will not be there, we will not have a liquid market, but we will have important sized projects already producing and delivering and having gone through the learnings of actually building and operating large scale projects with different technologies in different markets in different geographies. Hopefully by the next decade we will then be able to connect the dots and have infrastructure to actually trade the commodity and transport even in its derivative forms, both through maritime routes and pipelines, hopefully.

Wes Ashworth (36:49)

Yeah, and I want to reiterate a point that you’ve made throughout this, but thinking about that, obviously, there’s a lot of challenges behind it. There’s a lack of infrastructure. There’s a lack of policy clarity. There’s a lot of hurdles ahead. And this is still early on. As you mentioned, if you look at other renewables 30 years ago or those sorts of things and what needed to happen. But if we can just sum that up, why is it still important? Why is the work that you’re doing so important to continue to push through? Even though those hurdles exist, even though the lack of infrastructure and policy clarity and public support sometimes are lacking, why is this so important in the work that you’re doing to keep pushing ahead?

Ana Quelhas (37:28)

Sure, it’s like you said there are many many hurdles still many challenges to overcome but the reasons why we’re promoting the renewable hydrogen economy are fundamentally right and supported by a structural need to fully decarbonize. I guess at this point in time there’s no turning back. It’s not a question of if hydrogen will happen, it’s the question of when it will happen and how it will happen and we really need to all collaborate and join forces to make sure that this, when is sooner than later and the how is supported by sound instruments and educated decision making.

Wes Ashworth (38:11)

Yeah, well said. Before we fully wrap up, anything else you would like to share with the audience about the potential of hydrogen or EDP Renewables Future Projects or anything else you’d like to touch on?

Ana Quelhas (38:22)

Well, it’s very difficult to add something because I think we did a very good job in touching a lot of the topics, both technical aspects, regulatory framework, what we’re doing. So I think we covered a lot and also on the educational aspects of it. Mainly, just to add when it comes to the educational aspects of it, often misconceptions, that I think it’s becoming more and more informed in discussions, but still there’s a tremendous misconception about the price expectations for hydrogen. Especially in the beginning, everybody was talking about prices that are a dream. Like prices of $2 per kilogram or 2 euros per kilogram or even 3. This is far from being the reality.

And so we also need to educate the policymakers and the potential off-takers about the true numbers behind the costs of producing hydrogen. Otherwise, we are facing the risk of having policy instruments that are designed with the wrong assumptions and ultimately are not efficient in promoting anything.

So this is an important part of the education, understanding that it’s very difficult to get below $10 per kilogram if you’re talking about the renewable hydrogen project in small scale, even with good renewable resources. So it’s good to have an educated understanding about the true cost to have an educated conversation on hydrogen.

Wes Ashworth (40:09)

Yeah, well said and I agree completely. And that’ll wrap our conversation today. Ana, thank you so much for sharing your insights on the evolving hydrogen market, the challenges and opportunities in the energy transition and your vision for the future of hydrogen. It has been really fascinating to learn about the critical role hydrogen plays in decarbonization and how EDP is leading the charge. To our listeners out there, as always, thank you for tuning in to Green Giants, Titans of Renewable Energy.

If you enjoyed this episode, don’t forget to subscribe, share it with your network, and join us next time for more discussions with the leaders driving the renewable energy revolution. And we will see you soon.