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‘Policies do not match hydrogen’s importance’ – DNV report finds
‘Policies do not match hydrogen’s importance’ – DNV report finds

‘Policies do not match hydrogen’s importance’ – DNV report finds

Hydrogen is at risk of being the great missed opportunity of the energy transition, a new report by DNV has found.

Speaking to H2 View exclusively off the back of the release, the energy consultant and certification body said, “The pace of change of hydrogen is there, it’s just not enough for Net Zero.”

Released today (June 14), the report  calls for governments to make urgent, significant policy interventions to ensure hydrogen does not fall short in decarbonising the economy.

The report, titled Hydrogen Forecast to 2050, has predicted that the amount of hydrogen in the energy mix by 2050, will only be 5%. It claims in order to meet the Paris Agreement climate targets, hydrogen uptake will need to triple to meet 15% of energy demand.

Remi Eriksen, Group President and CEO of DNV, explained, “Hydrogen is essential to decarbonise sectors that cannot be electrified, like aviation, maritime, and high-heat manufacturing and should therefore be prioritised for these sectors.

“Policies do not match hydrogen’s importance. They will also need to support the scaling of renewable energy generation and carbon capture and storage as crucial elements in producing low-carbon hydrogen.”

Speaking exclusively to H2 View, Hari Vamadevan, UK Vice-President for DNV, said, “I think the most important thing to notice is when it comes to the energy transition, almost all our actions require scale and pace of change.

“The energy transition is a series of mini transitions, which hydrogen is one aspect of a much bigger transition. The pace of change is too slow, and the scale is insufficient. That’s also valid for hydrogen.”

The UK Vice-President also told H2 View that recent events in Europe have accelerated hydrogen uptake further, while admitting, there is still more to be done.

Vamadevan said, Just from last year to this year, the EU has come an awfully long way. I would say the UK has shown more commitment to hydrogen. But even after the latest energy security white paper, after the Ukraine crisis and the sanctions, it’s also accelerated hydrogen from where it was last year. So, one thing is clear, the pace of change of hydrogen is there, it’s just not enough for Net Zero.”

Vamadevan, however, remained positive about the current scaling and roll out of hydrogen that has been witnessed in recent years.

“I think the DNV forecast looks at current commitments and I think it’s worth noting those current commitments to take us from a negligible position with hydrogen in the energy mix, to 0.5%  by 2030 and then 5% by 2050.  That is a fairly phenomenal investment,” he said.

According to the DNV, global spending on hydrogen production between now and 2050 will top $6.8 trillion, with an additional $180bn to be spent on hydrogen pipelines and $530bn on building and operating ammonia terminals, only meeting 5% of the energy demand.

Vamadevan said that demand commitments from governments will make a dramatic impact in project scaling. He explained, If you create the demand, business will create supply, for sure.  I think those demand side commitments from the government really make a big deal to removing some of the uncertainty of hydrogen.”

However, Vamadevan believes the most effective way to pay for the energy transition as a whole, is to decoupling GDP growth from the cost of energy.

He said, “Energy efficiency means that you decouple the growth of GDP with the cost of energy. A real key part of paying for the energy transition is that decoupling.

“Today we’re spending 3.2% of global GDP on energy. In 2050, we’ll be spending 1.6%. That delta is $2 trillion a year and almost $70 trillion by 2050. So that is how you pay for the energy transition.”

The report has also predicted that electrolysis is set to be the dominant production method of green hydrogen by the middle of the century, accounting for 72% of output. However, the method will require surplus renewable energy to power 3,100GW of electrolyser capacity, more than double the total installed capacity of solar and wind at present.

Despite this, the Hydrogen Forecast to 2050 report, notes that blue hydrogen, produced from natural gas with emission capture, has a significant role to play in the short term, and will account for 30% of total production by 2030.

Although Vamadevan believes that there needs to be less debate about what colour hydrogen we will be using. He told H2 View business is pretty good at developing technology to supply it to meet the blue, the green, and even pink hydrogen varieties.

“In the next decade it will be blue hydrogen that can scale quickly with CCS, which also decarbonises gas. And then you’ll see green hydrogen and other forms of low carbon hydrogen, like pink hydrogen, picking up.” he said.

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