Hydrogen is scaling up to meet an expansive vision of its role in a Net Zero world. Almost every week another basis study is produced by a government or NGO, a financial player, strategy consultant, or one of the energy majors. Every single report concludes that hydrogen should account for 15% or 20% of global energy consumption by 2050. To achieve that, we must multiply the amount of H2 produced by a factor of ten, shift the process to green or carbon-capture, and create the infrastructure necessary for distribution.
Alongside the Net Zero vision, cash support is driving scale. Funding commitments by governments have skyrocketed to more than $70 billion. Total project investments world-wide are rising by almost a billion a week. The spending plans vary dramatically, but they span Europe, Australia, Korea, Japan, and elsewhere. China now boasts the world’s largest deployment of hydrogen-powered trucks and buses. It will spend a further $5 billion on fuel-cell vehicle deployment by 2024.
The most tangible expression of this massive up-scaling of hydrogen is the number of large-scale projects announced over the past two years. The Hydrogen Council has tracked more than 350. Like states’ commitments, the projects are spread widely, with more than 80% of new projects located in Europe, but China alone has announced more than 50 large-scale hydrogen projects in total.
Total hydrogen investment through 2030 will reach $500 billion, including $130 billion directly associated with announced projects, $120 billion of additional direct investment needed to reach stated government targets, and $250 billion implied investment from original equipment manufacturers and suppliers.
Some of the projects focus on expanded electrolysis capacity, since the size and scale of hydrogen refineries must increase exponentially to meet the vision’s demand. Current installed capacity world-wide is about 300 MW. The ambition, though, is for a scale of about 80 GW. The EU alone has set a 40 GW target for 2030 (up from less than 0.1 GW today). Already several projects have been announced and promise a total of about 3 GW. The world’s total capacity to refine green H2 is on the verge of significance.
Downstream, at the other end of the value chain, hydrogen is beginning to play an important role in some sectors, especially transport. Hydrogen fuel cells are powering more than 20,000 cars, trucks, and buses around the world, and more than 30,000 forklifts. In Paris, a fleet of more than 100 former diesel taxis are now fuelled by hydrogen, with another 600 soon to switch to green H2.
Earlier this year Air Liquide, a partner in the Paris taxi project, completed construction of the world’s largest Proton Exchange Membrane electrolyser, powered entirely by renewables to generate green hydrogen. Sited in Canada, its capacity has doubled to produce up to 8.2 tonnes per day from the 20 MW facility.
Scaling up is essential. Only with high volumes – of electrolysis, vehicles, and other hydrogen applications – will it be possible to achieve reasonably competitive price levels. Only when scale is achieved can hydrogen become a new energy vector to transfer surplus renewable power to importing countries in the form of liquid hydrogen or ammonia, replacing – in the second part of decade – what LNG has done for the past 40 years. Only when hydrogen alternatives are affordable will take-up be sufficient to reach Net Zero.
These goals require us to act on our ambitions through development of projects on a realistic and replicable scale, each backed by a sustainable business model. By carefully planning and executing the next major projects, we will show tangible results before 2030 and sooner, creating the impetus to carry on scaling up.
Scaling up by the numbers
- 75 countries representing over half the world’s GDP have Net Zero ambitions
- More than 30 countries have released hydrogen roadmaps
- Governments have committed more than $70 billion in public funding
- 359 large-scale hydrogen projects have been announced
- 85% of global projects originate in Europe, Asia, and Australia
- The total funding requirement of these projects and commitments exceeds $500 billion through 2030
- Projects worth $150 billion have passed a final investment decision
- Scaling translates into projected costs of as little as $480 per kW by 2025, to a minimum of $230 by 2030