Can Europe have a successful hydrogen industrial strategy without a solar one?

Europe has always had a focus on driving industrial policy to support long-term, sustainable job creation. Think of the case of Airbus which has supported a European aerospace and defence industry that is 900,000 workers strong and boasts collaboration across 20 universities. Additional examples are found in the automotive sector that employs nearly 14 million workers across Europe, as well as the renewable energy industry which employs around 1 million workers across 27 of its member states. The newly formed EU Battery Alliance currently employs some 30,000 across 14 EU countries and is targeting over 1 million jobs by 2022 and represents evidence of Europe’s desire to create sustainable regional supply chains.

In the news over the last few months we’ve seen the launch of the European Clean Hydrogen Alliance as part of a broader strategy aimed at accelerating the decarbonisation of industry and promising the creation of over 1 million incremental jobs by 2030. This coordinated effort aims to bring together investors with governmental, institutional and industrial partners, building on the template of successful existing industrial alliances. However positive this initiative may sound, it encounters a key challenge at the offset: the incremental energy to produce hydrogen requires over 12 TW of PV and wind generation by 2050. This would require an investment of around $10 trillion! 

Thankfully for Europe, the wind energy industry is well placed to deliver the relevant portion of this demand due to a strong regional supply chain. However, the EU solar industry is not so well positioned, notwithstanding that PV delivers the lowest cost of electricity. At present, it relies too heavily on Chinese and Asian suppliers, which in turn are at the mercy of increasing geopolitical stress exacerbated by the COVID-19 pandemic. Adding to this problem, Asian manufacturers traditionally under-invest in R&D which is key to delivering tomorrow’s next-generation high energy density, low-cost PV solutions.

So we must ask the question: can Europe have a successful Clean Hydrogen Alliance without also establishing a Solar Alliance?

I would argue that the TIME IS NOW to launch an industrial policy to support European PV. After two decades from scale commercialisation of solar following Germany’s initial policy push, we are now ready to launch the next phase in PV with new-generation technology. This has the potential to ‘leapfrog’ Asian sector dominance which has led the way over the past decade in cost-reducing cell and module manufacturing. New sector leaders are emerging including companies such as Oxford PV (UK/Germany) in high-efficiency cells, Meyer Burger (Switzerland/Germany) in advanced process manufacturing, NorSun (Norway) in high-performance silicon and Nexwafe (Germany) in next-generation wafers, to name a few. Europe’s advanced technology and process manufacturing know-how can provide the pathway to PV energy densities that are 50% greater than those achievable with current monocrystalline silicon technology from Asia!

Europe now has the opportunity to develop the supply chain for next-generation solar with capabilities to serve the region and export globally. The elements are already in place; all that is required is focused commercial-industrial coordination of investors with governmental, institutional and industrial partners to build an industrial alliance around solar. 

Europe must view the energy transition as a whole to promote a coherent and complementary policy. This starts with solar PV as THE technology underpinning low cost energy and industrial competitiveness.