Hydrogen could be the big missed opportunity in the energy transition

The scenario modeled by DNV in Hydrogen Forecast to 2050 predicts that the amount of hydrogen in the energy mix will be only 0,5% in 2030 and 5% in 2050. However, to meet the Paris Agreement targets , the use of hydrogen will be three times greater, and meet 15% of energy demand by 2050.

"Hydrogen is essential to decarbonize sectors that cannot be directly electrified, such as aviation, shipping and high-temperature manufacturing, and should therefore be prioritized for these sectors", said Remi Eriksen, group chairman and CEO of DNV. “Overall, current policies fall short of the importance of hydrogen to these industries. They will also need to support the scaling up of renewable energy generation as well as carbon capture and storage. , crucial elements for the production of low-carbon hydrogen."

Classification

According to the report, green hydrogen produced by electrolysis will be the dominant form, accounting for 72% of production by mid-century. This will require a surplus of renewable energy, to power an electrolyser capacity of 3 gigawatts – more than double the total installed solar and wind generation capacity today.

Blue hydrogen – produced from natural gas whose emissions are captured – has a more important role to play in the short term (about 30% of total production in 2030), but its competitiveness will decrease as the capacity of renewable energies renewables will increase and prices will fall.

costs

According to DNV forecasts, global expenditure on hydrogen production for energy purposes by 2050 will amount to USD 6,8 billion, to which will be added USD 180 billion for hydrogen pipelines and USD 530 billion USD for the construction and operation of infrastructure suitable for ammonia.

For cost reasons, more than 50% of hydrogen pipes in the world will be gas installations readapted for this use, with a conversion cost that should not exceed 10 to 35% of that of new constructions. Hydrogen will be transported by pipeline over medium distances within and between countries, but not significantly between continents. Global hydrogen trade will also be limited by the high cost of liquefaction for shipping, and by the low energy density of hydrogen. A derivative of hydrogen, ammonia, which is more stable and easier to transport by boat, will be marketed worldwide.

Uses

The main users of hydrogen will be industries using hard-to-eliminate high-temperature manufacturing processes, such as metallurgy (mainly iron and steel production) – which currently use coal and natural gas. Hydrogen derivatives, such as ammonia and methanol, will also be essential to decarbonize heavy transport (sea and air), but these fuels will not be used on a large scale until the 2030s.

Hydrogen will not be used in passenger vehicles, and its use in electricity generation will be limited. Hydrogen for heating buildings will not be used globally, but will be rapidly adopted in some regions that already have extensive gas infrastructure.

“Scaling up hydrogen value chains will require managing safety risks and public acceptance, as well as enforcing policies to make hydrogen projects competitive. We need to take a more holistic view and a systemic approach, in order to really enable operators to seize the urgent decarbonisation opportunities that hydrogen presents”, Mr. Eriksen added.

Geographical distribution

Hydrogen adoption will vary significantly from region to region, depending on the incentives offered. Europe is the frontrunner, where hydrogen is expected to make up 11% of the energy mix by 2050 thanks to favorable policies that will boost both hydrogen production and demand.

In the OECD-Pacific countries (Japan, South Korea, Australia and New Zealand) hydrogen will represent 8% of the energy mix in 2050; North American countries (7%) also have supply-side strategies, targets and financing, but their carbon prices are lower and their targets less concrete. Greater China (6%) is following suit, recently providing more clarity on hydrogen finance and prospects for 2035, as well as an expanding domestic emissions trading system. . These four regions will together consume two-thirds of global hydrogen demand for energy purposes by 2050.