Angela Wilkinson became the secretary general of the World Energy Council (WEC) last November. She is a leading global energy futures expert, a former energy executive for Shell and British Gas, an Oxford scholar and a published author.

Her multi-disciplinary career, including time with the OECD in Paris, made her the perfect fit to manage the international network of organisations, which brings together stakeholders from government, the private sector and civil society to determine the ‘how to’ part of creating or evolving better energy systems.

Wilkinson is just the sixth secretary general since the WEC was formed 97 years ago. She spoke to Petroleum Economist at the end of the organisation’s World Energy Week in October, as she approached her first anniversary in the role.

Please set out the WEC’s position on hydrogen.

Wilkinson: We do not advocate for hydrogen or any particular technology or energy source. But we have been tracking hydrogen and hydrogen-based fuels as a new clean energy vector and complement to electrification for the last ten years. We are also old enough to remember the new hydrogen economy hype from the 1970s.

This time something seems to be different. The technical and economic feasibility really seem to be changing—costs are falling—and government interest is ramping up with China, Europe and others looking to establish global leadership positions.

For us, the role of hydrogen is as a clean, affordable and flexible energy vector—it is not an energy source. It is not about the colour—green, blue, purple or anything else. We include the potential for clean and affordable hydrogen production pathways from natural gas, oil and coal—with carbon capture, utilisation and storage, offsets or some other technology—as well as from excess renewables generation.

The future of hydrogen is about different users and multiple uses. Energy system developments are now being shaped by the increasing pull of digitally empowered customers and demand-side dynamics and competition. There is, however, still a dominance of supply-side thinking, about marginal costs of new production. But we have also got to think about how to transport and store hydrogen, as well as who and what will be the main users and uses of hydrogen. The Council is directing its attention to the new demand-side of the equation.

What was the main takeaway from World Energy Week relating to hydrogen?

Wilkinson: The hydrogen session at World Energy Week was a deeper and more nuanced conversation about ‘how to’ better develop the new clean hydrogen economy. The conversation contained less hyperbole about big production numbers. That is not to say big numbers are not interesting, but it is the ‘how to’ story that underpins the interest for us.

Our long-term energy scenarios, which we updated last year, suggest an important tipping point of 2-4pc hydrogen in the global energy mix by 2040. The poll during World Energy Week was more bullish, at 4-10pc. The difference seems to be down to differences in regional visions about the scale of the circular carbon economy and the prospect of investment and innovation in enabling a rapid fall in the costs of carbon capture and storage (CCS).

Europeans seem to be increasingly favouring green hydrogen. Is this helpful to the development of the hydrogen economy?

Wilkinson: To the Green Deal hydrogen enthusiasts of the EU27, the vision is that the rest of the world is going to gear up its production of renewable energy exports to serve Europe. I [ironically] love the idea that we should only talk about importing green hydrogen into Europe—as though there is no demand anywhere else, by anybody, for anything.

Within the EU, the assumption is that demand for hydrogen is going to be driven by the mobility sector. But the hydrogen story is not just about producing electric fuel cell vehicles at scale. And if we look at other regions, the uses of hydrogen broaden very quickly in response to the connected challenge of more access to affordable and reliable energy—and, importantly, climate-neutrality. Oil and gas producers everywhere are looking at hydrogen as a backbone for a next era of industrialisation.

For example, some countries are considering how investment in hydrogen could not only contribute to decarbonising energy use and transport, but also help accelerate the development of a new model of human and economic development—the circular carbon economy—at both city- and national-levels. This involves a very different perspective, of producing hydrogen from excess renewables power to use to improve grid reliability.

There are so many different applications—multiple uses, multiple production pathways and very different ambitions and aspirations, from players within and beyond the energy sector.

There could be different timelines for the development of the various uses of hydrogen. How do you see the development of the new, clean hydrogen economy?

Wilkinson: In parts of North America, Europe and Asia, there is a lot of existing energy infrastructure, such as pipelines, in place that could lend itself very easily to repurposing for the circular carbon economy. And there are a lot of offshore and underground reservoirs that we could use to store carbon—for example, there are a lot of geological subsurface structures in the Middle East that we can use for the hydrogen economy.

When talking about hydrogen for vehicles, the question becomes: 'how quickly can you build the recharging stations?' The problem is this requires new capex, not repurposing existing capex. The difference between short- and long-term timescales is very poorly discussed.

The technology costs of CCS are falling to less than $20/t, which is competitive with EU emissions trading system carbon prices. We also had a session on that at World Energy Week—there seems to be a big difference of opinion between MIT [Massachusetts Institute of Technology] and the Saudi Arabians over what is possible and whether the Middle East will invest in becoming a technology exporter. I do not know the answer, but I know we need to bring these different sides together and have better conversations. Hydrogen is either ‘big and easy’ or ‘too hard to do’ but somewhere in the middle is the future.

The WEC launched Hydrogen Global last year. What are you trying to achieve and how much traction has it gained?

Wilkinson: Hydrogen Global is a voluntary platform for people who want to trigger demand for hydrogen. It is a complement to the many producer platforms, such as the Global Hydrogen Council and many others, where technology producers talk to each other about production costs and efficiency. We are concerned about how a global level playing field and regional value chains will develop, and want to facilitate the development of broader ecosystems including users of hydrogen.

We have a whole programme of activity on hydrogen, but Hydrogen Global provides a signal to the market that we need to trigger demand and consider demand competition dynamics. Hydrogen Global brings the users together with the producers in a different conversation. There are about ten signatories so far, but it is about opening up the conversation, not necessarily the number of seats at the table.

What are most pressing conversations for the signatories to Hydrogen Global?

Wilkinson: There are multiple uses for hydrogen, so we need to take account of demand-side competition. There will be demand from the energy industry but also from adjacent sectors—there will be industrial, built environment and transport uses. Hydrogen Global tries to bring these different demand-side perspectives together in a conversation about what it means for supply. The conventional logic is to discuss supply first and only eventually talk about the end-user, many steps down the linear value chain.

We have highlighted, however, that value creation is moving closer to the end-user and a new leadership mindset has emerged—a shift from supply-side thinking to demand-driven solutions and customer-centric energy systems.

It is time to flip the old linear logic of the Sankey diagram on its head and look at demand formation and innovation, and then think about what it means for supply. The world has made several attempts to get the hydrogen economy going from a supply-centric perspective. Let us be clear—it failed. The bubble of hydrogen hype will burst unless we bring in the demand side to the energy transition talks.

The WEC has conducted various research projects related to hydrogen. What conclusions did it draw?

Wilkinson: We have been doing work on hydrogen for a decade. Three years ago, we published a report looking at different production technologies in Asia, North America and Europe and investigated the state of play in terms of technological and economic feasibility of different production pathways. This year, we have published a new report that maps national hydrogen strategies which governments have established or are putting in place. The report highlights that the emphasis tends to be on ambition rather than the ‘how to’ achieve the goal.

Now, we are digging into the regulatory developments that are required to facilitate regional and global value chain development—this is where we move into mapping demand-side dynamics and competition across different sectors of the economy.

How is the WEC influencing the development of the hydrogen economy?

Wilkinson: Our conversations are always around the ‘how to’ build and transform energy systems rather than what is the ideal energy mix or what is the preferred shape of the energy system. If hydrogen is going to be 10pc of the global energy mix by 2040, how do we facilitate the development of the hydrogen value chain in a way that balances security, affordability and equity and environmental sustainability while keeping the playing field level and open to new players, especially in developing economies? How do we make sure the rules of the game are not set by the leading international interlocutors? Who else is going to help ensure new players such as Morocco and Chile can engage in shaping the new rules of the game?

We do not want to rely on the assumption that hydrogen demand will be shaped only by personal vehicles because that could make the costs of hydrogen unbearable in some societies, because transport is a high-end market. We need hydrogen solutions that work in much lower-cost markets. Our job is to set an agenda that enables user needs and interests to be at the table alongside technology producers. We can convene different countries and companies and create a safe and courageous space for more open-minded strategic conversation and better-quality exchange of practical know-how. We can help trigger collaborative innovation in forming new energy ecosystems that include the promise of clean hydrogen value chains that work to the benefit of all of society.

We need to think about the promise of the clean hydrogen vector in the same way we think about the promise of the renewable power revolution—anything else would be bonkers. To successfully manage global energy transition, the world will need 'clean heat, clean molecules, and clean electrons'.

We clarify the case for hydrogen as we do for the future of the grid. Countries, companies and trade associations each advocate for their vision. Each claims to know what the future will hold and what is best for everyone else—and that is usually based on their preferences and technology choices. It is necessary for someone to be independent and cut through the fog of assumptions and dreamscapes. That is what we do, we pragmatically address the difficult energy questions about how to get to where societies want to be in the future.

What are the geopolitical implications of the emergence of hydrogen?

Wilkinson: There has always been a risk of geopolitics in energy, and the new geopolitics of clean energy is emerging and has to be navigated carefully. Hydrogen is clearly a geopolitical play. The geopolitics of oil and gas dominated for the past hundred years, and we are navigating the new geopolitics of clean energy just as carefully.

Energy geopolitics used to be all about oil and gas, but this has been broadening to non-energy resources. The renewables and battery storage revolutions are intensely material. There is also the geopolitics of digital technology and data, including cybersecurity challenges, to consider.

What role do you see for oil and gas companies in the hydrogen economy?

Wilkinson: According to the conversations at World Energy Week, there is a huge opportunity for responsible upstream players to be leaders in clean hydrogen, circular carbon economy models and new integrated energy business models. The future of energy is open to multiple transition pathways.

There is no reason for oil and gas companies to avoid the necessity of the role for oil and gas, alongside renewables and nuclear power, in the global energy transition discourse. It is important to take on board what environmentalists are saying but not necessarily to let them set the pace and direction of global energy transition.

People and communities, including those impacted by energy transition, need to be engaged and we need to open a safe space for a more honest conversation about the full costs of whole system transition and how societies can manage the risks associated with the faster stranding of assets. Oil and gas companies are suffering a crisis of identity, but societies will need them to demonstrate responsible leadership in securing more energy and climate-neutrality in the new post-crisis context of affordability and social justice.

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Author: Alastair O’Dell<BR>Senior Editor