As more and more companies participating in the RE100 initiative will use 100% green energy by 2030–2050, green hydrogen is a key option in the long-term global energy transition. In view of the strong growth potential of the global hydrogen industry, Taiwan's semiconductor companies should have long-term plans for utilizing green hydrogen as a source of green energy, said Sabrina Yu, analyst and project manager at DIGITIMES Research.
According to the estimates of major international energy-related organizations such as IEA, hydrogen will account for 12–22% of the world's total energy demand in 2050. Compared to 2020, when hydrogen accounted for only 0.1% of the world's total energy demand, all organizations expect hydrogen to grow significantly in 2050.
The Global Hydrogen Review 2022 published by the IEA at the end of 2022 indicated that the cost of hydrogen production from natural gas is the lowest at this stage, at about US$1–2.5 per kilogram, and if CCUS technology is used, the cost will increase to US$1.5–3. Hydrogen production from the electrolysis of renewable energy resources is the costliest hydrogen production technology, at US$4–9.
DIGITIMES Research observes that the global capacity of electrolyzers totaled 13.8GW in 2022, and the International Energy Agency (IEA) estimates that by 2030, the global industry has planned 61.3GW of capacity, mainly from Europe and China. However, there remains a huge gap between the planned capacity and the net-zero target of 850GW, providing an opportunity for the industry to enter the green hydrogen market.
Hydrogen production is still not a priority for Taiwan's hydrogen industry, as most of the hydrogen is now imported from other countries. But hydrogen electrolysis is an unavoidable path for green hydrogen development in the future, said Yu, who believes Taiwan's industry can manufacture key components of electrolyzers or play the role of system integrator (SI).
Yu pointed out that Taiwan is currently 10 years behind the international development of green hydrogen, but companies that are in demand for green energy, such as the semiconductor companies in Taiwan, can adopt green hydrogen by installing electrolyzers in Science Parks, where their fabs are located.
Taiwan can also start manufacturing key components used in the process of hydrogen production to accelerate the buildup of the green hydrogen ecosystem locally, said Yu. The other possibility is integrating offshore wind power with electrolyzers in conjunction with green hydrogen production.
As the European Union is launching the Carbon Border Adjustment Mechanism (CABM) to impose a carbon tax on imported industrial products with high carbon emissions. It is expected that more industries, including the semiconductor manufacturing supply chains, will be subject to the carbon tax in the future. Hence, it justifies greater attention from the semiconductor supply chain companies to take green hydrogen as an option more seriously, said Yu.
Although Taiwan has listed green hydrogen as one of the 12 key strategic goals of its climate policy, it only has just taken its first step in developing hydrogen infrastructure. More interest from the demand side would certainly help incentivize the supply side. The state-run enterprise China Petroleum Corp. (CPC) and Linde-LienHwa, a specialized gas joint venture between Linde Plc and Taiwan's LienHwa Industrial Holdings, have announced plans to build hydrogen refueling stations in Kaohsiung and Tainan respectively in 2023. They are also evaluating the construction of liquid hydrogen receiving station.
The source of hydrogen supply in Taiwan is mainly based on international cooperation and assessment of hydrogen imports, with a lack of planning and investment in the hydrogen production side (either blue and green hydrogen) and in the infrastructure side of hydrogen refueling station demonstration. Yu emphasized that planning and investment in green hydrogen production are crucial development priorities that both government and enterprises cannot afford to neglect.
Analyst's Bio
Sabrina Yu received her Technology Management MBA from the National Tsing Hua University and a bachelor's degree in Business Administration. She has more than 10 years of research and project management experience at Taiwan-based Chung-Hua Institution for Economic Research (CIER) and AECOM. Currently, her research areas mainly focus on Net Zero/ESG, renewable energy, energy storage, and carbon reduction technologies.
Credit: DIGITIMES
