Hydrogen to play a key role in decarbonisation of the utilities sector
Published: 03:05 PM,May 07,2022 | EDITED : 07:05 PM,May 07,2022
BUSINESS REPORTER
MUSCAT, MAY 7
In an evident and dramatic policy shift around the world recently, several countries are now actively pursuing decarbonisation strategies, raising the profile of zero-carbon fuels. As the utilities sector goes through the energy transition, the increasing use of zero-carbon fuels such as green hydrogen is likely to be a significant factor in the quest to decarbonise.
The drive to tackle global warming through decarbonisation has picked up momentum in recent months, with net-zero targets announced by the UAE, Saudi Arabia, and Bahrain (2050), as well as China (2060), Japan, South Korea, and Canada (all 2050), and the Biden administration recommitting the US to the Paris Agreement.
Global demand for hydrogen currently stands at around 8–10 exajoules (EJ), most of which is consumed in the chemical sector; this figure looks set to grow. The EU published its hydrogen strategy last summer aiming for six gigawatt (GW) of capacity by 2024, ramping up to 40 GW by 2030. Germany, Spain, Portugal, Netherlands, Finland, Sweden, Poland, and Canada all published a national hydrogen strategy in the last year.
The Hydrogen Council’s “Hydrogen for Net Zero” report shows that hydrogen can provide the lowest-cost decarbonisation solution for over a fifth of final energy demand by mid-century, while another estimate says that the world is going to need 1000 GW of electrolyser capacity by 2050 to meet demand forecasts.
Currently, approximately 95 per cent of worldwide hydrogen production comes from fossil fuels, according to the International Renewable Energy Agency (IRENA). However, hydrogen from renewable sources has the potential to play a key role as the energy industry tackles various critical challenges including how to channel large amounts of electricity from renewable sources to sectors for which decarbonisation is otherwise difficult, including industrial, transportation and niche applications.
Despite clear demand drivers and several opportunities on the horizon for hydrogen, the International Energy Agency (IEA) says demand for low-carbon hydrogen remains low, limited only to road transport and falling short of Net Zero Emissions by 2050 Scenario requirements. It says that more efforts are needed to create demand, and reduce emissions associated with hydrogen production.
Ferdinand Varga, Managing Director and Senior Partner of Boston Consulting Group, the Strategic Insights Partner of the World Utility Congress said: “One of the most forward-looking energy supply for industries is low-carbon fuels, specifically hydrogen. Meeting the future demand for hydrogen will not be easy, as production and supply of it might require subsidisation of its production to close the gap with other forms of low--carbon fuels—and most importantly, an adequate supply of cheap renewable power. Discussion on how hydrogen will play a key role in the decarbonisation of the utility sector will help to provide a path forward on when, where, and how players should participate in it.”
The economic case for green hydrogen has improved dramatically with costs for solar and wind dropping, as well as the scale up of electrolyser capacity and associated supply chain. With the green hydrogen project pipeline burgeoning in the last year, there will be significant demand pressure on electricity supply, where costs remain high.
The role of hydrogen in the future of the utilities sector will play an important role at the World Utilities Congress, with a dedicated spotlight session titled ‘What will it take for hydrogen to become the low-carbon champion?’
The World Utilities Congress will take place on May 9-11 in Abu Dhabi’s ADNEC, where more than 10,000 global utilities professionals will attend to learn details on critical topics driving the future of low carbon power and water supplies.
MUSCAT, MAY 7
In an evident and dramatic policy shift around the world recently, several countries are now actively pursuing decarbonisation strategies, raising the profile of zero-carbon fuels. As the utilities sector goes through the energy transition, the increasing use of zero-carbon fuels such as green hydrogen is likely to be a significant factor in the quest to decarbonise.
The drive to tackle global warming through decarbonisation has picked up momentum in recent months, with net-zero targets announced by the UAE, Saudi Arabia, and Bahrain (2050), as well as China (2060), Japan, South Korea, and Canada (all 2050), and the Biden administration recommitting the US to the Paris Agreement.
Global demand for hydrogen currently stands at around 8–10 exajoules (EJ), most of which is consumed in the chemical sector; this figure looks set to grow. The EU published its hydrogen strategy last summer aiming for six gigawatt (GW) of capacity by 2024, ramping up to 40 GW by 2030. Germany, Spain, Portugal, Netherlands, Finland, Sweden, Poland, and Canada all published a national hydrogen strategy in the last year.
The Hydrogen Council’s “Hydrogen for Net Zero” report shows that hydrogen can provide the lowest-cost decarbonisation solution for over a fifth of final energy demand by mid-century, while another estimate says that the world is going to need 1000 GW of electrolyser capacity by 2050 to meet demand forecasts.
Currently, approximately 95 per cent of worldwide hydrogen production comes from fossil fuels, according to the International Renewable Energy Agency (IRENA). However, hydrogen from renewable sources has the potential to play a key role as the energy industry tackles various critical challenges including how to channel large amounts of electricity from renewable sources to sectors for which decarbonisation is otherwise difficult, including industrial, transportation and niche applications.
Despite clear demand drivers and several opportunities on the horizon for hydrogen, the International Energy Agency (IEA) says demand for low-carbon hydrogen remains low, limited only to road transport and falling short of Net Zero Emissions by 2050 Scenario requirements. It says that more efforts are needed to create demand, and reduce emissions associated with hydrogen production.
Ferdinand Varga, Managing Director and Senior Partner of Boston Consulting Group, the Strategic Insights Partner of the World Utility Congress said: “One of the most forward-looking energy supply for industries is low-carbon fuels, specifically hydrogen. Meeting the future demand for hydrogen will not be easy, as production and supply of it might require subsidisation of its production to close the gap with other forms of low--carbon fuels—and most importantly, an adequate supply of cheap renewable power. Discussion on how hydrogen will play a key role in the decarbonisation of the utility sector will help to provide a path forward on when, where, and how players should participate in it.”
The economic case for green hydrogen has improved dramatically with costs for solar and wind dropping, as well as the scale up of electrolyser capacity and associated supply chain. With the green hydrogen project pipeline burgeoning in the last year, there will be significant demand pressure on electricity supply, where costs remain high.
The role of hydrogen in the future of the utilities sector will play an important role at the World Utilities Congress, with a dedicated spotlight session titled ‘What will it take for hydrogen to become the low-carbon champion?’
The World Utilities Congress will take place on May 9-11 in Abu Dhabi’s ADNEC, where more than 10,000 global utilities professionals will attend to learn details on critical topics driving the future of low carbon power and water supplies.