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We need to supercharge green hydrogen to accelerate the march to net zero

Green hydrogen holds the key to transform renewable power

1 minute read

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Last year, the COP26 conference gathered countries together to align on a pathway to net zero and look to avert a climate crisis – but it cannot just be talk. The world needs real solutions that can be delivered once the conference has concluded to ensure we can achieve meaningful global impact this decade.

Every technology will play its part in decarbonising global energy systems. We have seen renewable generation such as wind and solar, supported by short-term storage, become standard in recent years, transforming perceptions of the potential for 100 percent clean energy.

Green hydrogen: a key driver for net zero economies

These technologies will continue getting cheaper, but they cannot get the job done alone. Green hydrogen holds the key to transform renewable power into the solutions we need for every sector. It will also help get us through extreme events triggered by climate change because it is a way to store renewable electricity for later use and decarbonise persistent sectors such as transportation and industry.

Given the right market and policy environment, green hydrogen has the potential to act as a key driver for the net zero ambitions of many nations who participated in COP26.

Governments are already weighing their ability to become one of the first hydrogen-powered countries. Several have placed green hydrogen front and center of energy policymaking, including the UK government’s pledge to deliver 5GW of hydrogen production capacity by 2030.

California’s Low-Carbon Fuel Standard has spurred early momentum in the US, and the Biden administration has made hydrogen a key element in its plans to fight climate change. Hydrogen was surely one enabler of the UAE’s recent pledge to become the first of the Persian Gulf's petrostates to reach net zero by 2050.

Green hydrogen is being deployed at scale across the world. We must now work together to ensure its commercialization matches the pace at which economies are accelerating towards net zero.

Overcoming the cost barrier

The principal barrier to implementation is cost. Green hydrogen is currently up to three times more expensive than hydrogen produced from fossil fuels.

As a global innovator, Bloom Energy has been focused on reducing the cost curve of green hydrogen around the world. In collaboration with Heliogen, we are harnessing solar energy to power our solid oxide high-temperature electrolyzers with electricity and steam. Reducing the amount of electricity required lowers the single biggest production cost considerably, making our electrolyzers 30 percent more efficient than low-temperature alternatives.

The green hydrogen tripod

Rapid technology development and commercialization is crucial to grow a green hydrogen economy, but this is just one leg of the tripod. We also need the right policy framework and a strong demand-side market to achieve a subsidy-free end state for green hydrogen.

We know the private sector can drive technology development from early stages to commercialization. Bloom’s heritage is built on taking a state-of-the-art fuel cell technology designed to perform with 99.99999 percent reliability on Mars and providing cost-efficient on-site power generation for businesses such as Walmart and Google.

However, to really accelerate the green hydrogen economy, governments need to use the right policy levers to support infrastructure development and stimulate strong demand.

Rallying the ecosystem

With the right market frameworks, we can drive down costs across an entire ecosystem.

Consider the examples of wind and solar. In less than a decade, they have grown from supplying less than one percent to 10 percent of electricity in Brazil, 15 percent in Europe, and 24 percent in the UK. Offshore wind costs have plummeted more than 60 percent since 2012, and onshore wind can now be cheaper than fossil fuels. Solar PV – described as “the most expensive way of reducing carbon emissions” as recently as 2014 – has expanded globally as costs have plummeted by 85% over the past decade.

In each case, a strategic mix of policies, investment and technological innovation led to rapid cost declines and accelerated deployment worldwide, creating an innovation ecosystem and stimulating deployment at scale.

Leaving aside the socioeconomic imperative to decarbonise, think how many industries directly benefit from offshore wind – the power sector certainly, isolated industrial sectors perhaps. These are limited touch points, yet offshore wind is now accepted by many countries as a vital pillar for delivering net zero.

Now consider the touch points for green hydrogen: transport, aviation, maritime, heavy and light industry, power, oil and gas – every aspect of society. Green hydrogen brings more constituents together than any other potential low-carbon technology.

Shaping the market

With actors embedding net zero pledges into their supply chains and operations at an eye-popping rate, the demand for green hydrogen is potentially huge, spanning fuel-intensive sectors across corporations, cities, and regions around the world.

The Global Cement and Concrete Association, for example, representing 40 of the world’s biggest producers and about 80 percent of the cement industry outside China, recently pledged to go net zero by 2050. Meeting this pledge without offsetting demands a mainstream green hydrogen industry.

The business case for hydrogen becomes even clearer as more regions and countries shift to 100% renewable power. For California to meet its 100% renewable target, the state is forecast to need 45GW to 55GW of long duration storage by 2026.

The potential for growth across a broad range of markets is immense, and we must put the effort in now to boost market confidence and cultivate strong demand. A crucial element of this will be the right policies and stimuli to shape the market, create confidence and encourage investment.

Co-create, demonstrate, disrupt

With global net zero ambitions supercharging the potential of green hydrogen, we need policymakers to put in place the regulation to act as the connecting tissue between supply and demand.

We have the technology, and we know it works. But transformation cannot come from innovation alone. We need collaboration between a large ecosystem of players who may not usually work together.

Current challenges of deploying low carbon hydrogen at scale include transportation from the production side to the demand side, besides bridging the gap from the supply to demand side, here is where governments can really step in and support the deployment of large-scale midstream infrastructure such as pipelines which are the cheapest method of transporting hydrogen.

As green hydrogen producers, users and innovators, we must come together to showcase green hydrogen in multiple industries and settings, bring costs down, and illustrate its potential for scalability.

The opportunity is before us. To fully realise the economic and environmental opportunities presented by green hydrogen, we must support each other as we innovate and supercharge its potential. If we stand together, governments will create effective market frameworks that drive confidence and demand, allowing the supply chain to accelerate efficient new technologies and create jobs and growth. Only then will green hydrogen live up to its potential and play its role in achieving a global net zero economy.

This sponsored content was built in partnership with Bloom Energy and does not necessarily reflect the views of Wood Mackenzie group of companies, its employees or management.