Use of clean hydrogen can help address the toughest third of global greenhouse gas emissions by 2050, but only if net-zero emission goals and policies are set
Following the lead provided by the UK and other leading industrial countries, the world has signed up to the global objective of net-zero carbon energy by 2050. This is inevitably a journey that will have several steps and milestones on the way and the current pandemic is accelerating this transformation, as it is changing many other areas of our global society. Addressing the climate change imperative is now understood and being acted upon by governments, corporations and individuals. Actually reaching some of the interim goals and attain 80% of the goal can be achieved through current technologies and systems, it’s the last 20% that will be tough. To reach the goal the world needs to adopt fundamentally new approaches to facilitate, the total elimination of the fossil fuel energy carrier that we have used relentlessly for the past 130 years. Hydrogen is emerging as perhaps the world’s most important new energy carrier.
Already the world’s leading economies and corporations are backing this energy transformation and investing substantially in the emerging Hydrogen economy which to deliver at global scale involves a completely new technical and value chains offering substantial investment opportunities as the traditional fossil fuel supply and value chains are systematically replaced over a 10 to 20 year period. Depending on the urgency we place on this conversion Hydrogen could provide between 45 to 75% of the world’s energy. This is an unprecedented opportunity and as technologists and investors demand our attention.
Over the decades we have proven that scale is the key factor that drives down capital and operational costs and improves performance we only have to look at computers, automobiles, aviation and renewable energy technologies to see this at work. Hydrogen is at the start of this trajectory. The world’s leading economies led by Japan, South Korea and Germany made early commitments to the Hydrogen economy. China is now rapidly catching up along with the USA, France and the UK. Collectively over $500bn has been committed to investing in actual projects over the next three years across the Hydrogen value Chain which comprises: Actual generation of Hydrogen using either chemical processes – grey Hydrogen – or the main focus Green Hydrogen produced using renewable energy (supported by the reducing costs of wind and solar generation); next the infrastructure required to store and transport Hydrogen from generation to point of use; thirdly that of the systems that convert the energy Hydrogen carries into electricity via and Fuel Cell or burning to create heat.
Over the next five to ten years the overall costs of Hydrogen will be reduced by 50 to 70% due to the economies of scale, making it directly competitive with fossil fuels which are essential for the world to afford this transformation. However, at some point, the counterfactual benefit of achieving net-zero carbon will become incalculable.
Duncan Valentine has the Hydrogen portfolio for Almax and advises the Renewable Energy Association a key adviser to Government. We are very well connected with suppliers and investors across the whole Hydrogen Value Chain and we look forward to working with our Clients to enable this transformation.