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Hydrogen is unique among energy carriers due to its ability to
unify. Geographically, the breadth of interest in hydrogen as an
energy carrier is worldwide. There are—so far—no issues of
geopolitical conflict or complexity involved. Countries across the
world see hydrogen as either a tool to meet ambitious
decarbonization goals or an opportunity for export. High
solar-resource hydrocarbon exporting countries in the Middle East,
highly industrialized energy-importing countries in Asia and
Europe, gas-rich countries like Russia, coal-rich countries like
Australia - all show positive interest in hydrogen. Hydrogen could
develop into a globally traded energy source, like oil and gas. But
also, it can be produced domestically, reducing dependency on
imported fuels. Hydrogen is not a primary energy source, it is an
energy carrier. It can be produced by breaking apart hydrocarbons
(coal, gas, and oil) or by splitting water with electricity.
Hydrogen produced from hydrocarbons requires permanent
sequestration of carbon to be low carbon. Hydrogen produced from
electrolysis is today more costly, however with scale, costs will
fall rapidly. By 2030, electrolysis costs could fall by more than
than 50% as the technology improves and renewable energy becomes
cheaper (see figure 1). As a result, many utilities are looking at
hydrogen and other renewable gases to green their pipelines.
Figure 1: Evolution of the production cost of renewable
electricity based hydrogen
Interestingly, hydrogen brings together the interests of
traditional fossil fuels (such as oil, coal, and gas) with
renewable energy generators. Electricity, and more importantly
renewably produced electricity, triggers political interest and
allows for political and consumer acceptability. But production
from hydrocarbons - with carbon capture - will be necessary to
offer the volume of hydrogen required. In this regard, hydrogen
allows the continued use of hydrocarbons even in a low-carbon
world. Accordingly, IHS Markit has seen a growing number of oil,
automotive, and other companies along the supply chain proactively
investing in hydrogen technologies (see Figure 2).
Figure 2: IHS Markit hydrogen supply chain
While bringing some people together, hydrogen also offers
businesses an opportunity to differentiate themselves. Whether and
how companies invest in hydrogen will provide investors with key
insights into corporate strategy and views on the energy landscape.
This will be important as a growing number of pensions, sovereign
wealth funds, and banks are tying climate ambitions and performance
to their investment decisions. Partnerships and technology sharing
will be key, as will successfully navigating a landscape with
shifting political winds and commodity prices. Hydrogen will ease
the energy transition by bridging people's demand for energy with
the fluctuations of renewable generation and the inconveniences of
battery storage. For example, on cold days natural gas pipelines
provide an enormous amount of "peak heat" that would overwhelm the
electrical grid if converted to load (see Figure 3). Utilizing
existing pipeline infrastructure, hydrogen could provide that peak
heat at a lower cost than other low-carbon solutions. Hydrogen can
also reuse natural gas storage, allowing storage of renewable
energy across seasons. Building on that, the ability to have stored
hydrogen readily at hand allows for its use in high-temperature
processes and long-haul transportation.
Figure 3: Roles for gas in a very low carbon energy
system
Hydrogen's future potential is large and real. Society will need
tools other than electrification and renewables in its
decarbonization toolbelt. Hydrogen is a well-understood alternative
energy carrier with a multi-billion dollar industry already
producing, transporting, and storing hydrogen. Economically, it is
already competitive in heating applications and will compete with
battery electric vehicles in the heavy goods vehicle and bus
egments in the 2020s. As decarbonization schemes increasingly bear
fruit, hydrogen's role in the economy will grow. IHS Markit
anticipates that, in regions aiming for net-zero carbon, hydrogen
could provide as much energy as natural gas today, 20% to 25%. In
other regions with lower targets, hydrogen could still account for
10% of the final energy balance. Today, momentum is building for
hydrogen. Polices in California, Europe, China, and East Asia
embrace hydrogen as a mechanism to decarbonize transportation while
reducing urban air pollution. Fuel cell trucks will soon join cars
on retail markets, and refueling stations (true gas stations) are
spreading across three continents. Utilities are building
hydrogen-compliant generation and distribution systems. To supply
these projects, developers are bringing online an unprecedented
number of electrolyzer projects and expanding the supply of
renewable natural gas available for reformation to hydrogen (see
Figure 4). The pace of technological change is accelerating, and
companies are taking significant steps towards commercialization in
a market where billions of dollars will be at stake.
Figure 4: Electrolysis capacity additions (MW) and maximum
plant size (MWe)
Since 2021 it has been observed a strong reduction of stacked OSVs. The increasing demand has encouraged companies… https://t.co/TcqJsN4JMp
Jul 05
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