Research into rising hydrogen economy


DNV has released a report Rising to the challenge of a hydrogen economy based on a survey of more than 1, 100 senior energy professionals involved in the growing hydrogen economy and several in-depth interviews with industry leaders. Published on 1 July, the focus of the research was to present an outlook from across organizations, ranging from production to consumption, on the expectations, challenges and enablers that the industry is facing in the process of moving into the mainstream of net-zero energy solutions.  

The research showed that in the past 12 months the attitudes to hydrogen economy have improved significantly and now in 2021 it is holding the status of a feasible, rapidly developing component of energy transition. Rachel Ruffle, CEO Northern Europe at RES, pointed out that the role of hydrogen has expanded from decarbonizing only the electricity, to the whole of energy sector, including heavy industry using grey hydrogen.

However, many industries expected to become hydrogen-consuming, need clear strategies from the supply-side, whereas the supply-side needs similar roadmap from the industrial users, so that the production can be matched with demand. As described by Bsibsi from Tata Steel Europe: “On both sides, and with regulators, policymakers, and all other stakeholders, there is a need to coordinate and collaborate”. The great expectations that respondents have for hydrogen are partly due to profitable business opportunity it represents. The current level of investment, government support and industry commitment will be essential to meet these expectations, both in terms of enabling net profit and net zero transition.

The report went on to outline key challenges and enablers to scaling the hydrogen economy. Infrastructure and cost were mentioned as the main obstacles, while the right regulations were deemed the most powerful enabler. Regulatory regimes were described as having power to both make the change possible as well us hold back the development of hydrogen. Another way of enabling the transition that was mentioned, was building economics around hydrogen by application. As hydrogen is closer to making economic sense in some applications than others, it is important to apply hydrogen in areas where it is best-suited.

The last section of the report concerned challenging questions and uncertainties around the future of hydrogen. This chapter looked at the role of blue hydrogen, globalization of hydrogen and hydrogen pricing. The majority of respondents agreed that both blue and green hydrogen need to work in synergy to enable scaling the hydrogen economy. However, there was a stark divide on the matter of globalization as 42% of respondents thought the hydrogen trade will become a globalized market, whereas 52% stated that it will be a mix of regional markets without significant import/export trade. Similar divide in responses was on the matter of whether prices will be driven by market forces (41%) or regulated rate of return (43%).

The research concluded that as surveyed energy professionals anticipate hydrogen to form 10% of their company’s revenue/spending by 2025, it signals a significant role for hydrogen much sooner than expected. It might be the case that the timeline is shifting and the hydrogen is no longer on the horizon, but it is stepping into our daily life. The governments and industry are increasingly able to rise to that challenge.