H. GULATI, AVEVA, Lake Forest, California
With $500 B in the investment pipeline, the hydrogen (H2) economy has taken off in 2022. More than 350 large-scale H2 projects have been announced, including 28 giga-scale H2 production projects. Data-led development will help us build a responsive and resilient clean H2 energy sector.
The world has shown its determination to slash greenhouse gas emissions and bring global warming levels down to 1.5°C on the road to tackling climate change. Achieving these ambitions is the task ahead of us, and the global community will need to use every tool in its arsenal.
Technologies that utilize H2 to create energy show great promise. H2 gas can power households and factories and serve as fuel for cars, ships and planes when deployed effectively. In the process, it could play a vital role in reducing the use of fossil fuels and minimizing carbon emissions across several industries facing strict climate targets.
H2 may be the missing link in the clean energy transformation. H2 is the simplest and most abundant element on earth and burns clean when mixed with oxygen. Pound for pound, H2 can deliver nearly three times the amount of energy as fossil fuels. Green H2—created using renewable energy instead of fossil fuels—can be produced wherever there is water and renewable electricity. Not only is it helping to decarbonize the chemical, industrial and transportation sectors, but since it can be produced during peak cycles, green H2 can be a way of storing excess energy to be returned to the grid when demand rises.
A 2021 study1 produced for the sector’s major players estimates that H2 gas could help cut carbon dioxide (CO2) emissions by 20% between now and 2050 and satisfy 15%–20% of energy demand. There are now 359 H2 fuel projects in development worldwide, with a total investment pipeline worth $500 B. That includes $150 B in mature investments.
The digital road to the green H2 sector. More companies are beginning to seek a place in this new H2 economy. Producing green H2, however, will require a multipronged approach that maximizes efficiency gains at every step along the way through optimized value chains and consistent operations.
As a sector that has come of age in the digital era, the new H2 economy will naturally depend on advanced technologies—including data, advanced analytics and artificial intelligence (AI)—to achieve the scale necessary for an actual transformative effect. By applying digital learnings from other sectors, we can avoid costly mistakes that could have long-term legacy effects.
Let us look at four ways that technological advancements are making the most of the H2 transformation:
Green H2 is enjoying unprecedented political and business momentum, with an increasing number of policies and projects worldwide promoting and incentivizing its use. One example is a leading Australian power company working with the author’s company to build a new clean H2 project blueprint, using built-in templates and visualization tools to increase efficiency and improve collaboration, taking steps to advance towards its sustainability goals. This is just one of many examples of how companies turn to technology to help with a sustainable transition and shift to the responsible use of resources. Demand for H2 to power industrial processes has grown more than threefold since 1975, and supplying the gas is now a major business sector worldwide, according to International Energy Agency (IEA) reports. Both increased electrification and other fuel-switching strategies are expected to drive innovation and emissions reduction. Converging power and process can deliver energy efficiencies and cut industrial waste. Smart and green electricity with renewables and storage can shift how we power machines, processes and plants, tackling the use of resources across industrial value chains.
Unlocking the enormous potential of green H2 will help us reach our climate goals faster. To do so within a limited time window, it is vital that organizations arm themselves with the most advanced tools available.
We have been presented with the rare opportunity of building a new industry from the ground up. We must seize the moment to create the cleanest, greenest and most resilient energy sector.H2T
1 McKinsey & Company, Hydrogen Council, “Hydrogen insights: A perspective on hydrogen investment, market development and cost competitiveness,” February 2021, online: https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021.pdf
HARPREET GULATI has more than 23 yr of experience in the fields of process design, optimization, operations management, MES and enterprise supply chain. Dr. Gulati earned a PhD in chemical engineering from North Carolina State University and a BS degree in chemical engineering from IIT Technical Institute.