When you engage Olympus Power for alternative energy needs, we assess the needs of your business – the energy usage profile, the grid connectivity you have, the market for exporting power and capacity to store it.
Currently solar energy makes the best sense for a lot of businesses, for the return on energy savings and reduced CO2 emissions. However, we are investigating a new market for large industrial parks in particular – and that is green hydrogen.
How big is the hydrogen market?
A report just out from Deloitte highlights how important green hydrogen is likely to become in the world in ten years, twenty years, and in thirty years’ time. The research suggests that in 2050 green hydrogen could be a $1.4 trillion (USD) market.
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 its 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.
What is green hydrogen?
When it is burnt as fuel, hydrogen does not emit greenhouse gases at the point of combustion. 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 producing 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. Green hydrogen is ALSO where the electricity involved in this process is generated by renewables, so that the hydrogen produced is zero carbon-generating i.e. green hydrogen.
What is blue hydrogen?
Blue hydrogen is produced by natural gas, and the carbon emitted from the process is captured. This fuel is labelled ‘clean’ when the carbon capture and methane emissions meet stringent conditions. However, we believe that in the future there may be difficulties with blue hydrogen and meeting the conditions needed.
Is the UK ready for green hydrogen power?
There are other questions we are investigating before we will offer hydrogen as a viable fuel in the UK market. Will systems meet safety requirements? What savings can be made for our clients? And is there the right renewable power infrastructure in place, in the right capacity and in plenty of locations to make its use truly viable?
The UK hydrogen strategy
The UK government’s hydrogen strategy policy paper details development of low carbon fuel with a target of producing 10 GW by 2030. It suggests the possibility for hydrogen to be providing 20 – 35% of the country’s total energy consumption by 2050, in particular where using renewable sourced electricity and battery storage isn’t appropriate. For example when winter peaks in demand coinciding with lower output from solar power systems.
Storage of hydrogen power and energy security
We can see that hydrogen storage is possible on a large scale. With green hydrogen, the storage of renewable power makes it a common sense partner to energy sources reliant on wind and sun, that fluctuates in production. Working in parallel with renewable energy sources, hydrogen storage could provide a reliable and stable supply for industrial and commercial premises when fluctuating renewable power is unable to meet their constant usage.
‘Rough’ is Britain’s largest gas storage facility, under the North Sea in Humberside. The prospect of repurposing it for hydrogen is being looked at by Centrica with the potential of storing nearly 50% of the UK’s hydrogen storage needs.
Summary of Deloitte hydrogen research 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, green energy will surpass its use by 2030. From 2030 to 2050, the prediction is a 50% growth in the green hydrogen world market to $1.4 trillion per year, with the annual export revenues more than $280 billion by 2050. At the level of investment estimated to meet the 2050 target, 2 million jobs a year may be created with these focused in emerging and developing economies. Wind and sun renewables need large land areas; the Deloitte report suggests the opportunity for the world’s arid region to house solar panels and turbines for a future levelling out of economies.
Funding for this proposed model calls for almost two trillion dollars to be invested in the green hydrogen market by 2050, with concentration in North and Sub-Saharan Africa, as well as Central and South America.
Heavy industries are predicted to use most green hydrogen by 2030, and in 2050 the biggest users are expected to be shipping and other hard-to-electrify transportation. 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 required. 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 good news is, the cost of green energy renewables is predicted to fall as solar and wind have. This will come as mass production, economies of scale, increasing demand and continuous technological advances come to the market.
The report stresses how the hydrogen energy sector needs policies and support now, and for at least the next decade to enable it to develop at the necessary scale to achieve its potential.
When will Olympus Power offer green hydrogen systems?
Olympus Power is constantly looking to the future and what new advances in technology and policies make possible for investing in clean, sustainable energy. We are excited about the potential of green hydrogen, initially to industrial parks and large commercial clients in conjunction with solar arrays, where the systems can work together to create clean fuel for low carbon emissions.
We can’t currently predict when we will be able to offer green hydrogen systems, but we expect fast-paced development in the next 10 years and are watching the market closely.