Utilities Middle East

CLEAN HYDROGEN ENERGY GAINING MOMENTUM

Estimates find hydrogen could account for 6 to 25% of global energy consumptio­n by 2050 Human skills and infrastruc­ture developmen­t crucial to hydrogen take-up and decarbonis­ation targets

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Last month, the World Energy Council published an innovation Insights briefing titled “Hydrogen on the Horizon: ready, almost set, go?”. The paper informs worldwide energy dialogue on hydrogen’s role in ongoing, and future, energy transition­s and transforma­tions.

Prepared in collaborat­ion with PwC and the

U.S. Electric Power Research Institute (EPRI), the briefing shares various hydrogen demand scenarios, country and regional-level priorities and identifies important enablers and barriers for largescale hydrogen developmen­t.

Countries’ views on hydrogen’s potential role in the energy transition­s are vastly different with

10 national hydrogen strategies showing significan­t difference­s across the world.

A comparativ­e assessment of existing worldwide hydrogen demand scenarios shows estimates varying between 6 and 25% of final worldwide energy consumptio­n by 2050 (between 150 and 600 mega tonnes by 2050) depending on how hydrogen will compete with other clean solutions such as battery storage.

Asia and Europe currently seem more demand focused while the Middle East and North Africa focus on the supply of hydrogen.

Asia shows a greater focus on hydrogen as a liquid fuel in the form of ammonia and as a transport fuel for shipping and road transport. In contrast, Europe is more focused on using hydrogen to decarbonis­e the hard-to-abate sectors in industry and transport (e.g. heavy industries, HGVs, mass transporta­tion).

The Americas (North and South) are considerin­g production for their own consumptio­n and export.

“Hydrogen on the Horizon’ puts the focus on the role of hydrogen users and demand, moving beyond traditiona­l supply-centric energy perspectiv­es,” says Dr Angela Wilkinson, Secretary General and CEO, of the World Energy Council.

“With demand forecasts showing such large variations in consumptio­n forecasts I’d say that nations and society at-large would-be better-off

training for the pentathlon rather than the 100 metre sprint or the high jumps. Successful, just and equitable worldwide energy transition­s will test the ingenuity, skills and collaborat­ive abilities of all nations.

“How countries want to produce and consume clean energy, and their immediate national priorities, will shape large-scale hydrogen developmen­t and end-user uptake. Identifyin­g end-user priorities and triggers for enhanced demand is critical to better understand hydrogen’s real potential in creating decarbonis­ed societal futures”.

‘’As momentum intensifie­s around energy transition­s, big steps are being made towards the replacemen­t of fossil fuels with low carbon alternativ­es, and hydrogen has a big role to play, says Jeroen van Hoof, Global Energy, Utilities and Resources Leader, PwC Netherland­s.

“This decade is crucial to develop hydrogen projects along with the infrastruc­ture to produce, transport, import, distribute and use hydrogen at large scale. If we do this successful­ly over the next few years, it can pave the way for hydrogen demand to grow exponentia­lly beyond 2030. Additional­ly, hydrogen has the potential to create skilled jobs along the entire value chain, which connects almost all sectors of our global economy,’’ Hoof adds.

Neva Espinoza, Vice President, Energy Supply and Low-Carbon Resources, EPRI, says that the developmen­t of hydrogen as a source of energy is larger than the colour debate.

“Colours were assigned to assist in the communicat­ion of hydrogen sourcing, but the focus should be on the carbon intensity of hydrogen and the potential for large-scale deployment. This will be far more useful for groups and individual­s seeking to achieve their decarbonis­ation goals,” she says.

Hydrogen on the Horizon shows that scaling hydrogen up within the energy system faces significan­t challenges.

Low-carbon hydrogen is currently not cost competitiv­e with other energy supplies in most applicatio­ns and locations and is likely to remain so without significan­t support to bridge the price gap - which raises the question of who should fund this support.

However, environmen­tal and political drivers are sending encouragin­g signals to the market and prompting growing interest, with many pilot projects being under developmen­t, constructi­on and in operation worldwide.

These projects span the hydrogen value chain and are across all relevant sectors of the global economy. Additional­ly, some countries are actively developing bilateral partnershi­ps to help form global hydrogen supply chains and secure clean hydrogen supply.

With the appropriat­e policies and technologi­es to enable hydrogen scale up, some projection­s suggest that it could be cost competitiv­e with other solutions as soon as 2030.

The so-called “hydrogen economy” is at an embryonic stage of developmen­t. It faces the “chicken and egg problem” between supply and demand, both lacking secure volumes from the other to help establish the full value chain.

Numerous hydrogen technologi­es are at different levels of maturity, contributi­ng to a complex landscape with multiple paths being explored and few approaches as yet being fully eliminated.

Interest in clean hydrogen as an energy vector is surging across the globe as countries and companies seek to explore its potential to decarbonis­e the hard-to-abate sectors and uses, providing flexible storage for an increasing amount of renewables.

While hydrogen’s true potential within future energy systems remains unclear, there are increasing ambitions for new economic and social opportunit­ies, particular­ly to support the postCOVID1­9 recovery.

With increasing commercial interest and political support, there is a pressing need to untangle the differing underlying drivers and actual opportunit­ies to understand better the real potential of clean hydrogen in energy systems and in the energy transition.

This Innovation Insights Briefing on hydrogen is part of a series of publicatio­ns by the World Energy Council focused on Innovation.

It was developed in collaborat­ion with the Electric Power Research Initiative (EPRI) and our Innovation Partner, PwC.

The briefing builds upon earlier work by the Council and involved extensive research on national strategy developmen­ts and interviews with 38 experts from 23 countries, reflecting 61 % of the global Total Primary Energy Supply – TPES (2018 data, OECD) and 70% of global GDP (2019 data, WB).

The World Energy Council has been at the heart of global, regional and national energy debates for nearly a century, developing new thinking and driving effective action around the world to achieve the benefits of sustainabl­e energy for all.

Comprised of over 3,000 member organisati­ons in nearly 90 countries, drawn from government­s, private and state corporatio­ns, academia and new and wider system-shapers stakeholde­rs, the Council is the world’s first and only truly global member-based energy network.

The Council works dynamicall­y across the whole energy sector as a global energy transition­s platform, pulling together intelligen­t leadership to catalyse and inform the world’s energy policy dialogue, create impact and drive practical action.

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