Green industries are about to be flooded with billions in investments from governments eager to rebound from COVID-19 and fight climate change. This month, Europe unveiled its hydrogen strategy including:
- Plans increase production capacity six-fold by 2024
- Installing 40 gigawatt of electrolyzers by 2030, up from 250 megawatt of global capacity today.
With over 70% share of global GDP linked to hydrogen country roadmaps, hydrogen has made a triumphant return to the frontlines as a critical energy vector. What’s the big deal? Hydrogen can account for 24% of global final energy demand and 5.4 million jobs by 2050, playing a sectoral integration role to support the decarbonization in industry, transport, power generation and buildings.
It’s not just governments who are looking at hydrogen to reach 2050 climate goals, corporates are also repositioning to play a role to maintain relevant in a fossil fuel free future. As a result, incumbents are engaging innovators and are actively participating.
In this insight, just ahead of our third edition of the Cleantech Interactive, Hydrogen Innovation and Global Decarbonization on July 21-22nd, we look how corporates are engaging with hydrogen innovators.
Why do corporates care?
Using existing natural gas infrastructure (and potentially carbon capture) offers an opportunity to avoid stranded gas assets, allows players to utilize existing pipeline infrastructure and generation network to maintain relevance in a world which otherwise is looking towards electrification. In May, five leading gas players (Cadent, National Grid, NGN, SGN and Wales & West Utilities) proposed a $1.1 billion plan to unlock for 5 year plan for UK hydrogen/biomethane gas network.
Big oil has collectively pledged billions towards sustainable hydrogen production. Like the gas corporates, grey/blue hydrogen (natural gas/CCUS) is seen as great intermediary rather than going full on renewable, avoiding the potential for stranded fossil fuel assets. However, as players like Shell look to become large electricity companies they are heavily pursuing a future using renewables for green hydrogen production. Repsol plans to develop a facility that will use carbon dioxide and green hydrogen to generate net-zero emission fuels for use in the transportation sector and Shell’s NortH2 project in the North Sea area will see 3-4 gigawatts of wind energy for hydrogen production before 2030, for 750 MW electrolyzer capacity.
Industrial Players (steel, cement):
Industrial players such as Paul Wurth and ArcelorMittal have all stated that the molecule has a key role within their long term-decarbonization strategies, using hydrogen-based furnaces, turbines for electrolysis for high temperature heat applications, or for industrial feedstock. Due to long life cycles of industrial heat, process and power assets, decisions on whether to commit to hydrogen are being made today. Steel EPC Paul Wurth is actively working with innovator Sunfire on a large-scale, high-temperature electrolyzer project, MULTIPLHY.
Industrial gas companies, automotive players, electric utilities and material/component suppliers all have existing roles in hydrogen, but will look also look to adapt to some of the new opportunities created in the sustainable hydrogen market