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 the energy transition.
This is according to the World Energy Council’s latest briefing report titled, Hydrogen on the Horizon: ready, almost set, go?.
The paper, prepared in collaboration with PwC and the US Electric Power Research Institute (EPRI), shares various hydrogen demand scenarios, country and regional-level priorities and identifies important enablers and barriers for large-scale hydrogen development.
The report highlights that the global hydrogen economy is still in the embryonic stage of development, with both supply and demand side lacking secure volumes to help establish the full value chain. This is compounded by the fact that countriesà¢€â„¢ views on hydrogenà¢€â„¢s potential role in the energy transitions are vastly different with national hydrogen strategies showing significant differences across the world. Also, numerous 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.
Dr Angela Wilkinson, Secretary General and CEO of the World Energy Council said: à¢€Å“Hydrogen on the Horizon puts the focus on the role of hydrogen users and demand, moving beyond traditional supply-centric energy perspectives. With demand forecasts showing such large variations in consumption forecasts Ià¢€â„¢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.
à¢€Å“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 hydrogenà¢€â„¢s real potential in creating decarbonised societal futuresà¢€.
A comparative assessment of existing worldwide hydrogen demand scenarios in the report shows estimates varying between 6 and 25 percent 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 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.
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 hydrogenà¢€â„¢s true potential within future energy systems remains unclear, there are increasing ambitions for new economic and social opportunities, particularly to support the post-COVID19 recovery.
Read the full report.