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Checking in on the hydrogen sector | Podcast

What’s the outlook for low-carbon hydrogen in 2024?

Green hydrogen energy, by now well-regarded as a critical component in the energy transition, is still faced with significant challenges. It’s anticipated to significantly contribute to energy needs, with projections suggesting it could supply up to 35% of the UK's energy by 2050, and there's a push in the US to dramatically reduce hydrogen production costs. The sector is experiencing rapid growth with many projects in development but reaching the final investment decision (FID) stage is a key hurdle, especially in the current economic climate of high interest rates and inflation. The sector is trying to manage high initial costs and a tendency for investments to favour blue hydrogen, which is currently more cost-effective.

To discuss the hydrogen market, and the policy and financial decisions to be made to accelerate the rollout, David Banmiller is joined by Murray Douglas and Vicky Paley. Murray is responsible for Wood Mackenzie’s global hydrogen and ammonia research, while Vicky heads up project delivery at Protium Green Solutions.

Together they look at the updates in legislation, permits and overall government policy we’ve seen in the last six months and can expect this year. The US, for example, has set definitive treasury rules to give a bit more clarity to the industry.

The sector also needs significant investments in hydrogen transportation and storage. The cost of hydrogen production remains a critical issue, particularly for electrolytic hydrogen, with electricity being a major cost component. There's a drive for cost reductions through technological advancements and economies of scale, but challenges like grid charges and integrating renewable energy sources continue.

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Read more of Murray's view of the year ahead in Hydrogen: 4 things to look for in 2024