BY HISHAM EL-GRAWANY, EGYPT MARKET MANAGER, ENERGY SYSTEMS, DNV
As recently as three years ago, clean hydrogen energy was on the fringes of the energy-transition conversation – an outlier solution, at least for the short or medium term. Today, it is rapidly moving into the mainstream, and for many, it is essential to a net-zero energy future. As the world is heading for hydrogen, the route is uncertain and many questions remain.
To meet the targets of the Paris Agreement, the world needs to transitionfaster to a deeply decarbonized energy system. In addition to energy efficiency gains, this will require greater renewable power generation and electrification, and the scaling of technologies to remove the carbon from fossil fuels.
Hydrogen will be needed to connect and enable these paths.
DNV’s recently released a new research report- Rising to the challenge of a hydrogen economy, which explores the outlook for emerging hydrogen value chains, from production to consumption. The research found that the challenge is not in the ambition, but in changing the timeline: from hydrogen on the horizon to hydrogen in our homes, businesses, and transport systems.
Findings from the research, based on a survey of more than 1,000 senior energy professionals and in depth interviews, indicate that some energy professionals identify a lack of investment in infrastructure as the joint-highest risk their organizations face in relation to hydrogen – and a significant majority (78%) say repurposing existing infrastructure will be crucial to developing a large-scale hydrogen economy.
Some 84% of senior energy professionals who responded to the survey believe that hydrogen has the potential to be a major component of a global, low-carbon, energy system, while 73% say Paris Agreement targets will not be possible without a large-scale hydrogen economy.
Profitable business opportunities are the biggest driver of involvement in hydrogen, while infrastructure and costs are two of the biggest hurdles. Repurposing existing infrastructure has a key role to play, and the right regulations are deemed to be the most powerful enabler, followed by carbon pricing specifically.
The research also revealed the following:
By 2025, 44% of energy companies globally involved in hydrogen expect it to account for more than a tenth of their revenue, rising to 73% of companies by 2030. This is up significantly from just 8% of companies today.
On the other side of this new energy value chain, 33% of hydrogen consumers expect hydrogen to represent more than a tenth of their organization’s energy or feedstock spending by 2025, rising to 57% by 2030. This is up from just 9% today.
Profitable business opportunities are the biggest driver for those involved in the hydrogen economy, while infrastructure and cost are two of the biggest hurdles.
73% say Paris Agreement targets will not be possible without a large-scale hydrogen economy. Some 80% say the hydrogen economy needs effective carbon-pricing regulations before it can scale-up.
Hydrogen has a new status in 2021 as an important, viable and rapidly developing pillar of the energy transition. Yet ambitions and the rate of change in the hydrogen economy are demanding, and the industry needs to prepare. Read the complete finding here.