“If you can do it in Wales, you can do it anywhere,” joked the Japanese ambassador to the UK, Hiroshi Suzuki, at the unveiling of Panasonic’s newest green energy project in Cardiff, Wales, on Tuesday.
The famously rain-soaked nation might not be the most obvious choice to site a facility that relies heavily on solar power, but as Suzuki pointed out, this makes it a trial by fire (or rather, water) for Panasonic’s HX system—the first attempt outside Japan to run an entire Panasonic factory on 100% renewable energy.
But that’s not what makes the £2o million ($25 million) upgrade such a bold move. The eye-opening part is that, along with 372 kilowatts of solar capacity, the Cardiff plant will rely on 215 kilowatts of hydrogen fuel cells using locally-produced green hydrogen, a “clean” form of hydrogen produced via electrolysis using power from renewable sources.
That’s a big deal. The green hydrogen industry is still in its infancy, and in the UK the sector has been characterized as “riddled with uncertainty” owing to concerns around supply of and demand for the product. The firm chosen to supply the hydrogen is UK firm Protium, which revealed to me in an email that the hydrogen will be produced at its nearby Pioneer 1 pilot project, formed in partnership with University of South Wales at the nearby steel town of Port Talbot. Pioneer 1 is, at present, a small-scale facility that Protium says can produce 40 kilograms of green hydrogen per day. Can it really deliver on the hydro-hype?
‘Hydrogen Society’
Pushing back on the idea that the Cardiff project might be a gamble, Panasonic Corporation CEO Masahiro Shinada told me that major firms need to express confidence in green technologies if the world is to cut the emissions that are causing global heating.
“A carbon neutral society cannot be established by Panasonic alone,” Shinada said. “We have to partner with other industries to [decarbonize] our supply chains. So with this Cardiff site, we’re inviting opportunity to realize a hydrogen society.”
Shinada told me that the UK’s commitment to green hydrogen production had been a factor in encouraging the firm to choose Cardiff as the site of its first fully green-powered site outside of Japan. He also pointed to UK commitments to heat pump manufacturing and installations, with the Labour government having pledged £3.4 billion ($4.3 billion) in the recent Autumn budget to accelerate clean heat in homes.
“This is part of our vision for a healthier society and planet Earth,” Shinada explained. That society would achieve net zero was, in his view, “inevitable” despite the challenges, which include “the difficulty of balancing supply and demand.” He added: “This pilot means we can learn how to make that supply chain, and achieve a more reasonable cost for green hydrogen.”
Which Way, Green Energy?
Among researchers, there is no shortage of skepticism regarding green hydrogen’s scalability as a green energy winner, versus alternatives such as wind and solar plus battery storage. Science journal Nature summarized these concerns in a 2022 editorial, warning that hydrogen requires large quantities of electricity for it to be separated from other elements—electricity that could otherwise be used to directly power homes, businesses and vehicles. “All this means that hydrogen should be used judiciously, to address emissions that can’t be eliminated in other ways,” the editors wrote.
One analyst I spoke to, Justin Mikulka, who is now director of communications for NGO Oilfield Witness, commented: “This sounds like an interesting approach in Wales, but I’d bet that there are better ways to store the energy than using hydrogen and fuel cells, unless they have so much excess wind energy they just need to use it for something.” Explaining that electricity accounts for some 75% of the cost of green hydrogen, he went on: “When electricity is really cheap, like in Australia, the economics of green hydrogen work pretty well. I’d be interested in the costs for their approach.”
This being the case, given the current high prices of electricity in the UK, cost could be a determining factor that makes or breaks the nascent British green hydrogen sector.
Nevertheless, Panasonic’s move is being viewed as a boost for green industry in Wales, and for the wider economy. Commenting on the launch, Wales first minister Eluned Morgan said: “Creating green jobs that tackle the climate crisis is a top priority” and that Panasonic’s decision “aligns with our vision for Wales as a globally-responsible nation, dedicated to safeguarding the future for generations to come.”
The New Hydro-Generation?
Whether it’s in Wales’s best interests or not, Panasonic’s interest in green hydrogen is very much in line with Japan’s determination to develop the technology, as the country struggles to decarbonize its energy sector. This is partly a consequence of the demands of Japan’s politically powerful car industry: automakers like Toyota have stalled moves to shift to EV production, and have placed a major bet on hydrogen to power their cars, despite rival China now having overtaken Japan as the world’s biggest car exporter—principally thanks to Chinese investment in EV and battery supply chains.
This goes some way to explaining why, among developed nations, Japan is viewed as a laggard when it comes to renewable energy generation and electrification, with at least 70% of electricity still being generated by fossil fuels, most of which it imports, compared to less than 40% in the UK. Experts at a leading Japanese economics think tank, who asked not to be named, told me another reason for Japan’s slow progress on renewables is also a consequence of geography and economic forces: while solar power deployment is now accelerating, the country’s powerful fishing lobby continues to make it difficult to site the sort of offshore wind farms that have helped Europe drastically cut its emissions.
And so Japan is throwing money at the global green hydrogen market, having committed to spending $107 billion on hydrogen supply chains over 15 years. So far this has had mixed results, and green hydrogen remains eye-wateringly expensive compared to blue hydrogen, which is derived from fossil gas.
But big players continue to invest in green hydrogen. India, the world’s most populous nation, is aiming to become a green hydrogen superpower, and is attempting to mobilize $129 billion of investment in the sector by 2030. Germany, China and Chile, among others, are all in the process of building out their own green hydrogen supply chains.
Panasonic’s hydrogen-powered wager in Cardiff, then, is assuredly part of a broader, international project to accelerate a specific type of global green energy economy. But it could also be framed as an undeniably confident vision of a green future. Whether it succeeds could depend on how effectively Panasonic and its partners can sell that vision.
For more on how green hydrogen works, see this Forbes explainer.
