Hydrogen enjoying unprecedented momentum as one of the pillars in energy transition

As the annual Offshore Energy Exhibition & Conference (OEEC) in Amsterdam is approaching with only two months left to go, we will be looking into some of the topics to be discussed during the conference. Hydrogen, which has been described as a game-changer, a holy grail, and a key pillar in energy transition, is one of these topics.

Although researched for decades, an interest in hydrogen has been renewed in the last several years due to its emerging role in the transition from fossil fuels driven to a low-carbon economy.

As the world is working to reduce and eventually eliminate its reliance on fossil fuels and switch to renewable sources of energy, new and alternative sources are being researched and hydrogen technology is often being referred to as the game-changer in the energy transition process.

Hydrogen can be produced from renewable electricity and from fossil fuels and used as fuel for power or in the industry as feedstock. It can be stored and transported in liquid or gaseous form and it can be combusted or used in fuel cells to generate heat and electricity. It is being explored as a clean fuel alternative for aviation, shipping, and heavy freight.

Depending on how it is produced, hydrogen comes in several forms. Grey hydrogen is produced from natural gas, but this type is not considered in the energy transition process due to the resulting carbon dioxide emissions.

The other two forms include blue and green hydrogen. Blue hydrogen is also produced from natural gas but the resulting emissions are captured using the carbon capture technology and stored underground. Finally, the cleanest version is green hydrogen, which is produced from the electrolysis of water using renewable power like wind and solar. As a result, the end product is emissions-free.

Most of the hydrogen produced now comes from fossil fuels. Given that this is a relatively mature technology, it is hydrogen in combination with the carbon capture and storage (CCS) that requires the most attention in the context of the energy transition.

As a result, both carbon capture utilisation and storage and hydrogen have been gaining momentum lately with projects using both of these elements now in development. Some of these include the UK’s Acorn project and H2H Saltend.

“Hydrogen is today enjoying unprecedented momentum. The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future”, Fatih Birol, Executive Director of the International Energy Agency (IEA), said.

One of the reasons behind this momentum lies in the urgency of climate change and the pledge by countries worldwide to reach the net-zero goal by 2050. This urgency calls for the exploration of all viable options that could help the world reach that goal.

As one of the countries that pledged to become carbon neutral by mid-century, Japan stands out in that it has committed to extensively pursuing hydrogen as an alternative energy source and to investing hundreds of millions of dollars to achieve this.

What is more, Japan is working to create a commercial hydrogen fuel supply chain by 2030 and has already entered into cooperation with the UAE to consider developing an international hydrogen supply chain. The country aims to produce 3 million mt/year of hydrogen by 2030 and 20 million mt/year by 2050.

This, in combination with rapidly decreasing prices of renewable energy, has created a major opportunity for hydrogen to play a key role in the energy transition.

In its Hydrogen Insights report from July 2021, Hydrogen Council, a global CEO-led initiative of energy, transport, industry, and investment companies with a vision to develop the hydrogen economy, said that a total of 359 hydrogen projects had been announced globally so far with Europe as the leader and Australia, Japan, Korea, China, and the USA following as additional hubs.

The total global associated hydrogen investment through 2030 will amount to $500 billion, the council said.

The council also stated in the report that the announced clean hydrogen production capacity stands at 11 million tons of hydrogen by 2030. Out of this, 70 per cent of the production capacity comes from renewable energy sources, while the other 30 per cent is low-carbon hydrogen generated by fossil fuels combined with CCS.

Just last week, the UK government also signalled its commitment to hydrogen by launching its plan for a hydrogen economy, which is set to support over 9,000 UK jobs and unlock £4 billion in investments by 2030.

This strategy drives forward the commitments in the Prime Minister’s 10 Point Plan for a green industrial revolution by setting the foundation for how the UK government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030.

The UK government believes that this new energy source could be critical to meet its targets of net zero emissions by 2050 and cutting emissions by 78 per cent by 2035. It is a key pillar of capitalising on cleaner energy sources as the country moves away from fossil fuels.

However, a hydrogen-based economy does have its challenges, including technology development and productions costs, infrastructure investments, as well as storage, transport, and distribution. In an effort to meet some of those challenges, the UK government also launched a public consultation to look at ways to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly. 

To find out more about the UK’s hydrogen strategy and whether it will pave the way for the decarbonisation of the shipping industry, read the article below:

Also, check out the programme for this year’s Offshore Energy Exhibition & Conference in Amsterdam to be held on 26-27 October 2021 and secure your seat by registering here.