Grey, Blue and Green hydrogen - could these be data centres' sustainable future?

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Key drivers:

• Green hydrogen, produced using renewable energy, is emerging as a clean, zero-emission alternative to fossil fuels for powering data centres.
• Compared with grey and blue hydrogen, it avoids carbon emissions entirely and offers strong potential for decarbonising backup and continuous power systems.
• While cost, efficiency, and infrastructure challenges remain, real-world trials by major operators show hydrogen’s promise in delivering resilient, low-carbon energy.
• RED Engineering is already designing data centre infrastructure to integrate hydrogen and renewable systems, helping clients build sustainable, future-ready facilities.

The digital world is growing faster than the energy that powers it. As data centres multiply to keep up with streaming, AI, and cloud services, their energy appetite grows - often fed by fossil fuels. Pressure is mounting for these facilities to decarbonise, with the focus shifting to alternative energy sources capable of providing reliable, low-carbon power.

Renewable energy, efficient cooling, and smarter design are all part of the solution - but there’s another technology gaining traction, one that could reshape how mission-critical infrastructure is powered: hydrogen.

Not just any hydrogen - green hydrogen. But what is green hydrogen, and why is it generating such interest across energy and infrastructure sectors?

Produced using renewable electricity, it promises zero-emission energy that can be stored, transported, and deployed on demand. It's being tested in industrial plants, transport fleets, and now, data centres, with Microsoft already trialling hydrogen fuel cells as backup power. Others are following suit.

But is green hydrogen really the future? What is the difference between blue and green hydrogen? And what role could they play in building more sustainable, resilient data centres? At RED, we're already designing infrastructure for this new energy landscape. Here's what you need to know.

What is green, blue and grey hydrogen?

What is green hydrogen, and how does it compare to blue and grey forms? Hydrogen is the universe’s most plentiful element, but on Earth, it’s rarely found in its pure state and must be produced. The industry uses a colour-coding system to indicate the environmental impact of each production method.

• Grey hydrogen is the most common form today. It's produced by steam methane reforming, a process that extracts hydrogen from natural gas. It's cheap and widely available, but it releases significant carbon dioxide during production. Around 95% of the hydrogen used globally is grey, making it far from a clean energy solution
• Blue hydrogen uses the same production process as grey hydrogen, but captures and stores the carbon emissions before they reach the atmosphere. In theory, this makes it lower-carbon. In practice, the effectiveness depends on the quality of carbon capture technology and how the captured CO₂ is managed. It's a transitional option, helping reduce emissions in the short term while industries move toward fully green hydrogen.
• Green hydrogen is produced by electrolysis - splitting water into hydrogen and oxygen using electricity and a device called an electrolyser. When that electricity comes from renewable sources like wind or solar, the entire process is emissions-free. No fossil fuels. No carbon by-products. Just clean hydrogen and oxygen. This is the gold standard.

There’s also white hydrogen, which occurs naturally in underground deposits. Scientists are still exploring how to access and use it at scale. For now, it's not a viable option for commercial energy production, but it's an area of growing research interest.

Is green hydrogen good for the environment?

How green is hydrogen - really? The answer depends on how it's produced, transported, and used.

When produced via electrolysis using renewable electricity, green hydrogen is genuinely zero-emission at the point of use. Burn it, and the only byproduct is water vapour. Use it in a fuel cell, and it generates electricity with no carbon output. This makes it ideal for applications where batteries fall short, from generating heat for industrial operations and powering long-distance transport to providing reliable backup energy.

But producing it takes more than sunshine or wind. Green hydrogen requires water - typically around 9 litres per kilogram of hydrogen. It also requires renewable electricity at scale, and energy to compress, store, and transport it efficiently. These factors mean its environmental credentials depend on careful lifecycle planning.

What are the benefits of green hydrogen? Lifecycle assessments show it can cut emissions by roughly 80-95% compared with grey hydrogen, depending on factors like the source of electricity and production efficiency. 

Plus, unlike blue hydrogen, it avoids uncertainties around methane leakage and inefficient carbon capture methods - giving businesses and regulators confidence in its environmental credentials. It's no silver bullet, but it's a powerful tool in the clean energy toolkit.

Efficiency, challenges, and barriers to adoption

Despite its promise, green hydrogen adoption faces real obstacles. Efficiency is a major factor: converting renewable electricity into hydrogen, then back into electricity via a fuel cell, involves multiple energy losses. By the time you've completed the full cycle, you may retain only 30-40% of the original energy, compared with batteries’ 90%+ efficiency.

Then there's cost. Electrolysers are expensive. So is the infrastructure needed to produce, store, and distribute hydrogen at scale. Though prices are falling with technological advances and scale, green hydrogen is still more expensive than grey hydrogen and, in many cases, fossil fuels. 

Safety is another consideration, as hydrogen is highly flammable and prone to leaks, requiring careful design, rigorous standards, and specialised materials. It's not insurmountable, but does require extra resources and careful management.

Finally, there's the infrastructure gap. Existing energy systems are built for electricity, gas, and oil, so scaling hydrogen requires new pipelines, storage facilities, refuelling stations, and grid integration. Governments and industry are investing, but we're still in the early stages.

Despite these barriers, momentum is building. Research and development is accelerating. Policy support is growing. And early adopters are proving that green hydrogen can work at scale.

Real-world applications

Data centres, where uptime is critical, are some of those early adopters. Microsoft has piloted a 1.5 MW system in Wyoming, running servers for 48 hours on renewable hydrogen, while its Dublin site has tested powering smaller-scale systems with locally produced green hydrogen.

NorthC Datacenters in the Netherlands has fully replaced diesel backup with hydrogen fuel cells at its Groningen site, and intends to expand hydrogen use as its main power source. 

Honda in Japan is using repurposed automotive fuel cells for data-centre backup power, while in Germany, Rolls-Royce Power Systems and Ineratec are using hydrogen-based e-fuels in existing data centre backup generators - a transitional low-carbon solution that works with existing engine infrastructure.

At RED, we’ve previously explored these applications in our insight The Roadmap to Zero‑Carbon and Water‑Negative Data Centres, highlighting how hydrogen, fuel cells, and energy recovery can support reliable, low-carbon operations for both data centres and the wider built environment.

Can hydrogen power the cloud?

So, is green hydrogen the future of data centre power? In the short term, hydrogen works best as a low-carbon backup power solution. Fuel cells deliver reliable emergency power without the emissions, and as production scales and costs fall, more operators can consider hydrogen as a viable, low-carbon backup solution. For operators committed to sustainability, it's an attractive option - particularly in regions with strong renewable energy grids and supportive hydrogen policies.

Looking further ahead, Hydrogen has potential as a continuous power supply. Fuel cells can operate around the clock, and if green hydrogen becomes available at scale and competitive prices, it could supplement or even replace grid power in certain scenarios - especially for remote or off-grid data centres, or in regions where renewable electricity is abundant but intermittent.

Hydrogen also addresses one of the biggest challenges of renewables: storage. Solar and wind output fluctuate, producing electricity only when conditions allow. Green hydrogen can absorb excess energy during periods of high renewable generation, store it, and convert it back into electricity when demand peaks - helping balance grids and making renewable-heavy energy systems more reliable.

But scalability remains a question. Building the infrastructure to produce, store, and distribute green hydrogen at data centre scale requires sizeable investment. Safety standards must be met. Supply chains must be established. And the technology must prove itself reliable under real-world conditions, day in and day out.

Hydrogen's role in a sustainable digital future

At RED Engineering Design, we're already designing facilities with these considerations in mind. Our MEP systems expertise and focus on sustainable infrastructure mean we can integrate hydrogen fuel cells, renewable energy systems, and future-ready power systems into data centre designs from day one, ensuring our clients are equipped to meet evolving energy demands and sustainability goals.

Any discussion about decarbonising power systems ultimately circles back to what is green hydrogen - and how it can stabilise grids, store surplus energy, and strengthen renewable integration.

Ultimately, hydrogen will not replace renewables; it will strengthen them. It stores excess solar and wind energy and delivers it when it’s needed most, providing a zero-emission boost to the grid.

Looking to future-proof your infrastructure with hydrogen and other sustainable innovations? RED Engineering can help you create resilient, efficient, and environmentally responsible data centre facilities. Contact our team today!