I continue my Hydrogen journey. Recently I have leaned heavily on six great sources of Hydrogen knowledge to relate to the complexities with the Hydrogen story, as part of the Energy Transition we are all undertaking.
Absorbing reports from the IEA, IRENA, Bloomberg NEF, the Hydrogen Council DNV GL, and finally, Australia’s National Hydrogen Strategy has helped me understand and relate to all the complexities within what Hydrogen offers in solutions. There have been countless others contributing their reports, views, or articles that I have read, tried to absorb, and relate too.
I set out to get a better picture of Hydrogens’ potential through some thoughts I offered in a recent post of applying a three-horizon lens to the understanding of any energy transition, and the one for Hydrogen has still to be finalized. Here in this post, I continue to frame the complexities within the challenges.
The more significant battle is all about shifting to clean energy sources thoroughly, and that should be our overriding focus.
The Paris Climate Agreement signed by one hundred and ninety-five countries in 2016 shifted the playing field dramatically. Hostilities were suddenly rethought, re-forged into new alliances, into different options. Competitive forces suddenly were collaborative forces but perhaps not wanting change at the same pace. The next climate conference, the 26th session of the Conference of the Parties (COP 26) to the UNFCCC, has been delayed until next year, November 2021, will be a very tough one to bring accountability, alignment, and reaffirmation of the Paris agreement. The outcome will determine if we do achieve the momentum and targets set and manage our climate to avoid its continued warming.
We need to achieve a clean energy global pathway by dramatically reducing the emissions of greenhouse gases, especially carbon dioxide. We are in a race to save our planet, carbon dioxide is building up to unacceptable levels; that are building up harmful toxins filling our lungs, creating an unhealthy living environment, for those, especially in our cities. Pollution is building, temperatures are rising, and we need to offer a future for generations to come. Clean energy becomes essential to resolving pollution, stopping harmful emissions.
You would think this need for a quick and fast shift in our energy sources is a no-brainer, but when you have so much at stake, the chosen territory to fight over is full of obstacles, pitfalls, and hostility. It took a hundred years to build the infrastructure and energy dependencies and today, we are in a “climate crisis” to rapidly make changes away from fossil fuels, our main polluters.
We only have thirty years to undo and lay in a new, radically different energy pathway.
How will it play out?
- There is, on one side, mainly the “established territory players for energy fuel” having significant invested and vested interests. They have over one hundred years of providing our energy sources by extracting and producing fossil fuels, do they give up the ground quickly?
- We are heading rapidly, for all Coal, Oil, and Gas producers. to a point that they are all facing their “Darwin moment.” The theory of evolution by natural selection, first formulated in Darwin’s book “On the Origin of Species” in 1859, is the process by which organisms change over time as a result of changes in heritable physical or behavioral traits.
- The producers of fossil fuel will be where only the fitter and adaptive will survive and will still have to dramatically adapt to what they offer in a rapidly adjusting environment requiring “clean energy”.
- Over a very limited time horizon the coal, oil, and gas producers will be forced to yield to overwhelming pressures to decarbonize? What solutions do they deploy to offset their assets still lying under the ground or sea? One solution is Blue Hydrogen, Hydrogen being phased into their power generating solutions helps by the deployment of different carbon-capturing techniques.
- As we shift to renewables we are in for a significant number of debates. How will the Paris Agreement stand up to the spirit of commitment against many vested commercial interests and needs?
- There is a growing argument that many of the current discussions, tensions, and reluctance around switching away from fossil fuels to renewables will linger until we have a universal carbon tax.
- Hydrogen is not competitive today, will it have the technical, political, and operational solutions to be seen to be a real commercial alternative, has it the ‘gas’ to drive change?
Until this, fossil fuels will likely continue to be the primary source of energy and simply hang on to what they have achieved as a recognized, proven energy provider?
The Hydrogen Pressure is On.
There is growing pressure within the necessary research and development on Hydrogen to find feasible solutions that are game-changing ones, highly competitive to existing alternatives. Ones that can quickly scale and significantly reduce existing cost designs, to change the current dynamics and speed the momentum for switching to Hydrogen.
Customers will be the eventual determinators of judging better values within any energy change. The final consumer will also need to relate to the Hydrogen story and what it means to them, in real alternatives, in options that are safe, reliable, and of sustaining value that improve their lives.
The competing forces caught up in this energy transition will see change as a battle between those wanting change sooner rather than those wanting this as late as possible, needed so they could reengineer their existing businesses, away from fossil fuel investments into alternative energy sources. Hydrogen is caught right in the middle of this battle. The competition will be intense, determined to safeguard existing options and vested interests, based on established fuels, slowing the energy transition.
Hydrogen might be about to have its day.
The Hydrogen Council released a report “A path to hydrogen competitiveness: a cost perspective,” published in January 2020. They are suggesting that approximately USD 70 billion is required for Hydrogen to become competitive.
They offer a very ambitious vision and see that Hydrogens’ positioning is far from automatic as there are many more established lower-cost carbon alternatives. Hydrogen needs scale and cost parity to compete effectively. It also requires considerable ramping up of hydrogen technology to achieve another equality with energy alternatives that are well-established and offering solid business case returns.
We are faced with multiple clean energy choices, that are all expensive
Today investment in clean energy sources is varied and expensive to build new infrastructure solutions. There are real choices, not just in different Hydrogen choices, the investments in clean energy are many. The need to build out solutions based on the alternatives of Solar PV, Hydro-power, Biomass/biogas, Solar thermal, Onshore and offshore wind, and Geothermal energy all require investment.
All of these are clean energy sources that can provide solutions that complement part of existing, invested infrastructure as well as compete in adaptive ways, that takes away the reliance on fossil-based solutions to give clean energy based on renewable ones.
Then besides the suggested significant investments, Hydrogen needs to create the market and convince policymakers to support the push towards factoring into the energy mix Hydrogen. I think we are at a critical moment.
The Energy Transition is one of our most pressing challenges to resolve.
Hydrogen to have a real chance of success needs to put in place the synergies and remove the barriers quickly. Is the momentum there?
Hydrogen is a robust and viable solution to the global decarbonization challenge, no question, but there are many “ifs and buts” to bring its potential into main-stream energy use. The issue of getting it to the point of validation at a large enough scale is where increasing competitiveness, political support, and growing market creation occur. It needs to complement alternative energy sources and, indeed, outcompete other low-carbon and conventional alternatives.
Of course, it does go beyond “head-to-head comparison” extracting Hydrogen has a real source of abundance, water, that can provide the energy security for many new countries, allow for a set of new energy players in energy supply and technology breakthrough that can create new jobs, and the eventual different approaches will generate new business options.
We know Hydrogen is potentially viable, is it scalable?
As we struggle to manage the rising environmental impact of global warming, Hydrogen is viable; it now needs to become scalable to offer solutions to decarbonize industry. It’s potential is now necessary to be realized as urgently as possible.
I do wonder about the push for such a change, is there enough ‘gas and intensity’ of purpose to drive the Hydrogen story within the Energy Transition? It needs massive investments and is fighting on multiple fronts, yet it seems like my next post outlines we are in a growing battle of the different hydrogen solutions adding more complexity to the challenges of Hydrogen.