A report from Deloitte*1 highlights how important green hydrogen is likely to become in the world in ten years, twenty years, and in thirty years’ time. The researchers suggest in 2050 green hydrogen could create a 1.4 trillion US dollar market each year.
Clean hydrogen is gaining more and more support, so much so that it is reckoned that its place in the global market is expected to exceed the trade in natural gas by 2030.
As clean hydrogen becomes more economical to produce and as it potential is recognised as a sustainable fuel it could well be the answer for governments across the world to reach net zero by 2050. This break-through fuel could be the way to meet long term low greenhouse gas emission development strategies and the answer to hitting the National Determined Contributions and the overarching goal to hold the increase in emissions to 1.5% above pre-industrialised levels.
So what is green hydrogen?
When it is burnt as fuel, hydrogen does not emit greenhouse gases at the point of combustion and therefore it is being widely viewed as a means of phasing out fossil fuels in long haul transportation, flying, sea tankers and high volume industrial uses BUT not all hydrogen is green. Carbon emissions when making hydrogen are often seen as the stumbling block for its potential use. How it is produced is key. Green hydrogen is created through electrolysis of water so there are no emissions AND where the electricity involved in this process is generated by renewables then the hydrogen produced can be counted as zero-carbon generating i.e. green hydrogen.
…and blue hydrogen?
Blue hydrogen is produced by natural gas where carbon is captured. This fuel can be labelled ‘clean’ when the carbon capture and methane emissions meet stringent conditions but going forward there may be difficulties with blue hydrogen.
Hydrogen reservations
There are other questions which probably come to mind to when considering hydrogen as a fuel. How safe is it? Isn’t it expensive? And is there the right infrastructure in place, in the right quantity and in plenty of locations to make its use truly viable?
UK’s Hydrogen Strategy
The government’s policy paper about its hydrogen strategy talks about the way to develop low carbon fuel with a target of producing 10 GW by 2030. There is a suggestion that of a possibility for hydrogen to be providing 20 – 35% of the country’s total energy consumption by 2050 – where using renewable sourced electricity and battery storage isn’t appropriate, for example winter peaks in demand and the coinciding lower output from PV systems.
Storage of Power and Energy Security
Hydrogen storage is possible on a large scale. So with green hydrogen, storage of renewable power is possible making it a common sense partner with energy sources reliant on wind and sun – working in parallel with renewable energy sources, hydrogen storage provides a reliable and stable supply when fluctuating renewable power is unable to meet demand.
‘Rough’ is Britain’s largest gas storage facility. The reservoir is under the North Sea in Humberside and has stored gas since it opened in 1985. The prospect of repurposing it for hydrogen is being looked at with the potential of storing nearly 50% of the UK’s hydrogen storage needs.
Summary of Deloitte researchers’ economic scenario
• The Deloitte models forecasts initially that the clean market in power will be mainly blue hydrogen, however because carbon emission rules are set to become stricter then green energy will surpass its use by 2030. In the following twenty years, from 2030 to 2050, the prediction is a 50% growth in the green hydrogen world market to $1.4 trillion per year and by 2050 the annual export revenues will be more than $280 billion. At the level of investment estimated to be required to meet the 2050 target, 2 million jobs a year may be created and these could possibly be focused in emerging and developing economies because wind and sun renewables are land hungry; the Deloitte report suggests the opportunity for arid regions of the world to be used for renewable creation and a future levelling out of economies.
The funding need, proposed in the model by 2050, is almost two trillion dollars in the green hydrogen market and they see how it could be concentrated in North and Sub-Saharan Africa, and Central and South America.
• Heavy industries are predicted to use most green hydrogen by 2030 and in 2050 the biggest users expected to be shipping and other hard-to-electrify transporters. In order to reach net zero carbon emissions in 2050 worldwide, clean hydrogen production would need to be 600 MtH2eq (85% of all the electricity used all around the world in 2019!) To achieve this production level, global investment of $360 billion is calculated to be required. A sum considerably less than the billions invested in oil and gas last year…and by 2050, renewable hydrogen has the potential to reduce carbon emissions by at least twice the gigatons produced globally in 2022.
• The cost of green energy renewables is predicted to fall as solar and wind have, through mass production, economies of scale, increasing demand and with continuous technological advances but nonetheless the report stresses how the hydrogen energy sector need policies and support now, and at least for the next decade, to enable it to develop at the necessary scale to achieve what they see it is capable of.
What Is Olympus Power Doing With Green Hydrogen?
Olympus Power are excited about the prospect of investing in this future clean fuel and are already looking at making green hydrogen on industrial parks where we install funded solar.
*1 https://www.deloitte.com/global/en/about/press-room/new-deloitte-report-emerging-green-hydrogen-market.html