Infrastructure the greatest hurdle for a hydrogen economy, says DNV

Hydrogen pipesDNV’s report rising to the Challenge of a Hydrogen Economy draws on a survey of more than 1,100 senior energy professionals and in-depth interviews with industry executives, on emerging hydrogen value chains, from production to consumption

The DNV's report suggests that more than just ambitions, the hydrogen pledges, plans, and pilots of recent years have now evolved into concrete commitments, investments and full-scale projects.

Around 84% of senior energy professionals believe that hydrogen has the potential to be a major component of a global, low-carbon, energy system, while three quarters (73%) say Paris Agreement targets will not be possible without a large-scale hydrogen economy.

Ditlev Engel, CEO of Energy Systems at DNV, said, “To meet the targets of the Paris Agreement, the world needs to transition faster to a deeply decarbonised energy system. In addition to energy efficiency gains, this will require greater renewable power generation and electrification, and the scaling of technologies to remove the carbon from fossil fuels. Hydrogen will be needed to connect and enable these paths.” 

A strong majority of energy companies (71%), only began their involvement with hydrogen within the past five years, while 55% only commenced within the past three years. For many in DNV’s survey (45%), hydrogen accounts for less than 1% of their organisation’s revenue today.

By 2025, 44% of energy companies involved in hydrogen expect it to account for more than a tenth of their revenue, rising to 73% of companies by 2030. This is up significantly from just 8% of companies today.

Hydrogen has a new status in 2021 as an important, viable and rapidly developing pillar of the energy transition. Yet ambitions and the rate of change in the hydrogen economy are demanding, and the industry needs to prepare,” said Engel.

Three quarters (74%) of energy professionals say that the outlook for a hydrogen economy improved significantly in the past 12 months, while two thirds (67%) expect this will continue in the next 12 months.

Energy professionals are aware of the significant challenges involved. Some 71% believe current hydrogen ambitions tend to underestimate the practical limitations and barriers, while 43% believe that the majority of national and organisational hydrogen goals are realistic.

Profitable business opportunities are the biggest driver of involvement in hydrogen, while infrastructure and costs are two of the biggest hurdles. Repurposing existing infrastructure has a key role to play, and the right regulations are deemed to be the most powerful enabler, followed by carbon pricing specifically. Some 80% say the hydrogen economy needs effective carbon-pricing regulations before it can scale-up.

 

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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