The time is now right for the build-out of the hydrogen economy, with supporting factors such as public opinion and the falling cost of technology all falling into place, a panel of industry leaders agreed this morning at the 2021 Baker Hughes annual meeting.

Marco Alvera, CEO of Italian energy infrastructure company Snam, said: “I recently moved from being a big sceptic to being a big fan… I think the time is now because the world is the taking net-zero seriously.”

He noted that countries representing 60pc of emissions have committed to net-zero and that this is only possible if we “electrify everything” and use “green molecules”.

“I recently moved from being a big sceptic to being a big fan” Alvera, Snam

“We are now at a point where we see hydrogen [being] able to reach cost-competitiveness with certain fossil fuels,” he said, in certain applications and parts of the world. He said Snam is engaging with a range of companies “with the clear target of making hydrogen at $2/kg in the next five years”.

“Now there is a much broader need for molecules, there is a much bigger consensus that we cannot electrify everything,” said Alvera. “There is a lowering of the cost of renewables—the next step is to lower the cost of electrolysers.”

Public opinion

Seifi Ghasemi, CEO of American industrial gases company Air Products, said the fundamental change underpinning the establishment of hydrogen is public opinion.

He said the younger generation, especially, is pushing companies and governments to “start right now, for the end game”, noting the endgame involves energy coming only from wind, solar and hydro.

“Those three sources produce electricity. About 40pc of that electricity will be used directly for driving light transport like cars, light trains, heating, air conditioning, cooking and lighting. The other 60pc of that electricity produced by those renewable sources will be used to break down water,” said Ghasemi.

“Hydrogen could be the primary source of energy for heavy transportation like buses and trucks, and trains, ships, planes and heavy industry such as steelmaking. That is the endgame.”

While countries are taking divergent paths at the moment, there is consensus around the ultimate destination, so “we need to start putting in the infrastructure to move in that direction”, said the CEO of the world’s biggest producer of grey hydrogen. “And that is what is happening, I think the momentum is there and people are taking action.”

Ghasemi cautioned that there is still a long way to go; even if $2/kg were achieved at a hydrogen facility, transportation and other costs mean it would cost far more at the point of consumption—perhaps $9-10/kg.

Value proposition

Paddy Padmanathan, president and CEO of Saudi Arabian power company Acwa Power, said the push for hydrogen results from the consensus that “there is a whole range of stuff that electricity cannot supply”.

“We are going to have to find something else—and that is urgent. But we are now able to generate that electricity at way lower cost than we were ever able to produce electricity in the past, anywhere, using any fossil fuel.

He said that using this “very cheap, renewable and carbon-free electricity” to produce green hydrogen “is a hugely compelling value proposition, and it serves this massive need that we have not been able to fulfil”.

“Hydrogen could be the primary source of energy for heavy transportation… and heavy industry such as steelmaking. That is the endgame” Ghasemi, Air Products

“It is absolutely the right place, at the right time, with all the right tools coming together to kickstart the hydrogen economy,” added Padmanathan.

Pablo Barrera, EVP strategy & communications at Norwegian chemical company Yara International, said that the “urgency is realised… across the whole value chain”. He noted hydrogen enjoys “strong commitment” from the EU and 126 countries have committed to net-zero. “That is why I think the timing is right.”

“We see a big push [for net-zero] in many parts of the world, so it is not just a European agenda. I would say that it is now beyond the point of no return. Decarbonisation has passed the tipping point, and I see hydrogen playing a critical role.”

He added that he is “extremely encouraged” by how the whole value chain is aligned, from regulators and producers to investors and consumers.

Barrera, speaking from his perspective from fertiliser giant Yara, added: “Green ammonia is a fantastic gateway into the hydrogen economy.”

Mobility case

The mobility sector, and heavy vehicles in particular, is expected to be a major source of demand for hydrogen. While fuel-cell passenger vehicles remain expensive and have not yet caught on, the use case for heavy transport is much more obvious.

Craig Knight, CEO of global supplier of hydrogen fuel-cell powered commercial vehicles Hyzon Motors, pointed out that interest has now become more committed.

“The previous bouts of enthusiasm for hydrogen were at times when oil was very expensive and people were looking everywhere for any solution to the high-oil situation,” said Knight. “It was not a commitment to hydrogen at all.”

Replacing diesel power with a battery-electric solution in heavy trucks faces significant hurdle—the weight and size of the batteries reduces payloads. Hydrogen fuel cells get around this problem and may well emerge as the long-term solution.

“What we are dealing with is a commitment to using hydrogen as a key energy vector to address some of those hard-to-abate sectors,” said Knight.

“This has impetus from major corporations, it has impetus from governments and very importantly... it has impetus from the younger generation—who are the ones that are going to live with the mess we leave behind if we do not start dealing with our carbon addiction.”

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Author: Alastair O’Dell<BR>Senior Editor