The project cost $25 million and is the first attempt outside Japan to power an entire Panasonic factory with 100% renewable energy.
However, the weather conditions here make it the perfect place to test Panasonic’s HX system, the first attempt outside Japan to run an entire factory on 100% renewable energy.
The upgrade cost £20m ($25m), but that’s not the only thing that makes it such a bold move. What’s striking is that in addition to 372 kilowatts of solar capacity, the Cardiff plant will feature 215 kilowatts of hydrogen fuel cells using locally produced green hydrogen, a «clean» form of hydrogen produced by electrolysis using energy from renewable sources.
The big business of green hydrogen
The industry is still in its infancy, and in the UK the sector was characterised as being “plagued by uncertainty” due to concerns around the supply and demand of green hydrogen. The company chosen to supply the product is the British company Protium. As revealed to Forbes , the hydrogen will be produced in its Pioneer 1 pilot project, formed in partnership with the University of South Wales in the nearby steel town of Port Talbot.
Pioneer 1 is currently a small-scale facility that Protium says can produce 40 kilograms of green hydrogen per day. Can it meet the challenge?
The «hydrogen society»
Panasonic Corporation CEO Masahiro Shinada dismissed the idea that the Cardiff project is a gamble. He said big companies need to express confidence in green technologies if the world is to reduce emissions that are causing global warming.
«A carbon-neutral society cannot be established by Panasonic alone,» Shinada told the outlet. «We need to partner with other industries to decarbonise our supply chains. So with this Cardiff site, we are inviting the opportunity to realise a hydrogen society.»
Shinada said the UK’s commitment to green hydrogen production was a factor in the company’s choice of Cardiff as the site for its first fully green plant outside Japan. He also pointed to the UK’s commitments to heat pump manufacturing and installations, with the Labour government pledging £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 a healthier planet,» the CEO explained. In his view, society reaching net zero is «inevitable» despite the challenges, including «the difficulty of balancing supply and demand.» He added: «This pilot means we can learn how to do that supply chain and get a more reasonable cost for green hydrogen.»
Where is green energy headed?
There is some skepticism among researchers about the scalability of green hydrogen as a green energy winner, over alternatives such as wind and solar plus battery storage. The scientific journal Nature summarized these concerns in a 2022 editorial , warning that hydrogen requires large amounts of electricity to separate it from other elements — electricity that could otherwise be used to directly power homes, businesses and vehicles. “All of this means that hydrogen must be used judiciously, to address emissions that cannot be eliminated in other ways,” the article said.
Analyst Justin Mikulka , communications director at the charity Oilfield Witness, said: «It sounds like an interesting approach in Wales, but I’d bet there are better ways to store energy than using hydrogen and fuel cells, unless they have so much excess wind power that they need to use it for something.»
Explaining that electricity accounts for around 75% of the cost of green hydrogen, he continued: «When electricity is really cheap, like in Australia, the economics of green hydrogen work quite well. I would be interested in hearing the costs of your project.»
The new hydro-generation?
Whether or not it is in Wales’s interest, Panasonic’s interest in green hydrogen is linked to Japan’s determination to push the technology forward as the country struggles to decarbonise its energy sector. This is partly a result of demands from Japan’s powerful car industry.
Automakers such as Toyota have halted moves to make electric cars and bet heavily on hydrogen to power their vehicles, even as rival China has overtaken Japan as the world’s largest exporter, largely thanks to Chinese investment in supply chains and batteries.
To some extent, this explains why, among developed nations, Japan is considered a laggard when it comes to renewable energy generation and electrification, with at least 70% of electricity still generated from fossil fuels, most of which it imports, compared with less than 40% in the UK.
Experts at a leading Japanese economic think tank told Forbes that other reasons for Japan’s slow progress on renewable energy include geography and economic forces: While solar deployment is accelerating, the country’s powerful fishing lobby continues to make it difficult to locate the kind of offshore wind farms that helped Europe slash its emissions.
For these reasons, Japan is throwing money into the global green hydrogen market, while pledging to spend $107 billion on hydrogen supply chains over 15 years. So far, the results are mixed, and green hydrogen remains prohibitively expensive compared to blue hydrogen, which is derived from fossil gas.
But the big players are still investing in green hydrogen. India, the world’s most populous nation, aims to become a green hydrogen superpower and is trying to mobilize $129 billion of investment in the sector by 2030. Germany, China and Chile, among others, are in the process of building their own green hydrogen supply chains.
Panasonic’s bet on hydrogen in Cardiff is undoubtedly part of a broader international project to accelerate a specific kind 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.
