Georgia starts producing green hydrogen

An innovative project envisaging green hydrogen production is launched in Georgia. More and more countries are becoming interested in green hydrogen which is considered as the purest alternative of traditional, fossil energy. Georgia, having a large potential of development of renewable energy projects, plans to use this opportunity and position with green hydrogen at the world market.

The Memorandum of Understanding on development of the green hydrogen project was already signed between the Ministry of Economy and Sustainable Development of Georgia, Georgian Oil and Gas Corporation (GOGC), Batumi Municipality City Hall and the German Bank "KfW".

It is stated in the information disseminated by the Ministry of Economy and Sustainable Development that "Intention of the Parties to develop a green hydrogen pilot enterprise as well as its entire value chain (including demand and supply) with joint efforts is expressed in the signed Memorandum". It is also noted that the government pays particular attention to hydrogen energy development prospects in Georgia.

GOGC was involved in this process from the birth of the idea to the signature of the Memorandum. George Chikovani, General Director of GOGC, gives a detailed explanation of the idea of green hydrogen, why its production is critically important for the country and the prospects it gives to Georgia at the international energy market. Mr. Chikovani responds to all questions related to this topic in the interview.

The Memorandum of Understanding on development of the green hydrogen project – what does it imply and who are signatories of the Memorandum?

First of all, I would like to tell you that this is an innovative project of the future, which is implemented on initiative and with active support of the Ministry of Economy and Sustainable Development. The Memorandum is the result of long-term diligent work and efforts.

In the modern world, green hydrogen is an important topic due to the climate change. It is not a new technology. Work on it has been carried out for many years. In the recent period, focus was made on its lower price and increase of efficiency and considering the existing forecasts and tendencies, green hydrogen will become a competitive alternative to traditional, fossil fuel. Green energy is obtained by electrolysis. Renewable energy sources: wind, sun and water, i.e. hydropower, are used for obtaining it. Hydrogen production expenses mainly include power energy and electrolizer (a unit used for hydrogen production) expenses. 

Georgia has a large, unused potential of development of renewable energy projects. It has resources to position itself on the world market with green hydrogen. Work in this direction began in our country before the Pandemic. Afterwards, spread of COVID-19 hindered the process. Later, the work was resumed and the idea of launching a pilot project in Georgia came up with an active cooperation of KfW. Finally, the Memorandum was developed and signed between the Ministry of Economy and Sustainable Development, GOGC, Batumi Municipality City Hall and KfW.

What benefit will this Memorandum bring to the energy sector of Georgia?

This will be the first project in this direction. Awareness will be raised in connection with green hydrogen and we will gain experience. We will be able to implement other hydrogen-related projects through this project.

Why is facilitation of hydrogen energy development important for the country? What role will it play in ensuring the energy security of the country?

Hydrogen has many advantages compared to natural gas. First of all, it is pure and more importantly, Georgia has a possibility to produce it. This means that our country can gain income by this project. Green hydrogen will help us to strengthen energy security and replace imported fuel, as we have rich resources of renewables. 

The EU pays a lot of attention to green energy production. Georgia as the member state of the "International Energy Community" considers the international tendencies. Many states have already undertaken a commitment to replace natural gas with alternative energies by 2050 to a large extent. Developed countries are ready to gradually transit to hydrogen and thus, hinder climate changes. It has many prospects of use: power generation and reserving, it is used as an alternative and pure energy for vehicles, it is planned to transit plants and enterprises to hydrogen energy, to use it for heating buildings etc. Europe is taking serious steps in this direction. This is the investment into the future for them. Georgia can not only produce hydrogen for domestic use, but also to export it. The demand is constantly increasing, because as I have already mentioned, many states are trying to replace natural gas with hydrogen.

What preliminary works and what steps were envisaged to be done and taken before signature of the Memorandum?

Various international and local seminars and meetings were permanently held where the world tendencies were discussed and the role of Georgia was identified on the international map of green hydrogen. We studied the hydrogen working mode and its use in municipal transport. We hope that this innovative project will give an impetus to initiation of other projects too. If we do not start thinking about the future now, we will not be ready for challenges and opportunities.

At the initial stage, how can the country use the green hydrogen produced as a result of this project?

At the initial stage, we consider Batumi municipal transport for use of hydrogen. Its use in the municipal transport will become a vivid example to demonstrate to the society how useful, pure and safe green hydrogen is for the modern world.

How do you intend to implement this project?

Under the terms and conditions of the Memorandum, this project will be funded with the support and assistance of KfW on the basis of a grant and cheap loan and I would like to express special gratitude for it.

What will be the next steps and what will be the final result?  

Hydrogen Council composed of local and foreign experts is created on initiative of the Ministry of Economy and Sustainable Development. They are working on creation of hydrogen development strategy. As a result of work of the Council, the respective legislation will be changed and improved, steps will be taken allowing local and foreign investors to see and evaluate the business potential for green hydrogen development in Georgia.

The preliminary works will last about a year. One year later, we will specifically know the amount of produced hydrogen, standard of use and we will move to the production and implementation stage.