With investors having the capital and manufacturers having the technologies, the time is now for “decisive action” to catalyse hydrogen investment, according to a report.
In late September, Arup, in collaboration with the Global Infrastructure Investor Association (GIIA), launched a report into how greater investment can be enabled in the hydrogen sector. It drew on the findings from a survey of GIIA members, which found 90% believe hydrogen is set to play “some sort of role” in the future energy system and 70% expect it to be important for some applications by 2030, yet just 16% are either engaged in, or have concluded deals for, hydrogen-related infrastructure.
This shows the disparity between the current investment activity and potential for future growth, meaning policy and regulatory intervention is “urgently needed” to catalyse private sector investment in the coming months and years and realise hydrogen’s necessary role in decarbonising the economy.
It went on to outline the enabling support mechanisms required from the public sector, beginning with a clear-time bound plan from governments to provide the certainty the private sector needs to make investment decisions. While strategies and targets for hydrogen deployment are a “good start”, they only go so far, with tangible actions needed to create a credible market for hydrogen products and infrastructure.
It also emphasised that all low carbon production methods should be on the table and evaluated on their methods. For example, hydrogen production from fossil fuels with carbon capture and storage (CCS) offers a chance to scale up supply quickly while the supply chains for green hydrogen expand and capital costs reduce from economies of scale and innovation.
It further mapped out the need for price certainty to encourage growth in the supply of hydrogen and demand pull to assure producers there will be a market for their hydrogen; a focus on applications where there are low risks of future regret and marginal costs of carbon abatement are high; and an increase in public sector funding for research and development across all stages of the supply chain as a means of fostering competition and increasing efficiencies. It suggested innovation in hydrogen end-use applications is prioritised, allowing more hydrogen-consuming technologies to find their way to market.
Finally, it called for regulations to be sorted to enable blending into gas networks. It called for this to be pursued as a matter of urgency with regulations and safety cases developed to facilitate this, while government also must articulate a clear path for gathering the evidence required to decide whether to convert to 100% hydrogen supply in the future and how it will be achieved.
