Hydrogen Need and Trend
Hydrogen is currently experiencing a increasing interest despite years of usage. This main focus is mostly driven by the so called “Green Hydrogen” promising a clean fuel for the service of the Energy Transition.
Now, in the Energy transition scenario, hydrogen comes as a natural vector of energy for many applications where the electricity is unable to supplant oil & gas.
Electricity can be a replacement for light transportation or buildings for example. But it is unlikely it will help in petrochemical or aviation. At the opposite, for many of these applications, hydrogen may be the right answer.
Hydrogen covers applications of the Oil & Gas which electricity cannot. Hydrogen is thus needed for use cases such as :
- Heavy transportation : buses, trucks, plane, ships, trains
- Industrial processes : cement, steel
- Domestic heating
- Energy storage
- Power storage
- Refining processes
- Ammonia production
Along with the growing need for hydrogen comes the trend we are currently experiencing. In fact, for many governments willing to invest billions in their economy to counter the covid crisis, hydrogen comes as the right fit. Investments in hydrogen serves both the energy transition and an economic recovery.
Governments have clearly identified the strategic interest of the business opportunity toward hydrogen. And many have started a race to develop: Technologies, Supply chains, Infrastructures, Supply, Demand.
Hydrogen Technologies
Hydrogen is an abundant gas, quite stable, with a behavior similar to natural gas, and the main advantage to be cleanly produced under certain conditions. Many processes exist to produce hydrogen, here is a list of the main one organized by color:
From these different types of production, 2 appear as mean of the energy transition : the Blue and the Green.
Indeed Blue Hydrogen will be the main instrument to initiate the hydrogen economy. It enables high volume of clean hydrogen production with today technology.
Also Green hydrogen production is the close future solution. It will allow us to produce large volume without dependency on carbon component, achieving a major step of the energy transition.
Consequently from the production of hydrogen, different types of transportation also exist:
- Trucks : for local area distribution of medium volumes
Simple to implement with an high flexibility - Pipeline : for local large distribution or long range transport
Blend in the natural gas grid for domestic applications
Existing infrastructure in industrial complexes - Ships : For export of hydrogen between countries like in the natural gas market
Huge volume transported at low cost
Flexibility of delivery ad Independent actors can operate
Secondly after the type of the transportation, another question is : in which state? In fact, hydrogen energy density is low in its gaseous state, thus prompting operators to look for liquid form of transport.
Today and 5 years Hydrogen market outlook
The current market of hydrogen is mostly about small-scale projects as demonstrators and pilots for production of green hydrogen. These projects target to produce in a 2 – 3 years vision with around 10 to 20MW capacity.
Pilots and demonstrators are critical projects for developing the technologies and thus benefiting from small public investments. However, second phase developments are already in the pipeline with closed financing in billions.
Today, we monitor around 110 of these initiatives in our project database www.projectsmartexplorer.com
Hydrogen market is the most growing market of all the Energy Transition applications, in front of solar and windmill markets. Soon, in the 2030 horizon, hydrogen market will be comparable with natural gas.
The hydrogen market growth is well represented by our extract Capex pipeline from www.projectsmartexplorer.com
In this chart, you can clearly observe the acceleration of today market to develop a brand new sector. To note, if the pipeline is going down after 2025, it is only because the future projects are yet to be announced.
Hydrogen market outlook in 2030 and 2050
Presently, we produce around 90 millions tonnes of hydrogen per year, mostly from grey production. In 2050, we will need to produce 520 millions tonnes of Hydrogen per year. With the break down of 310 millions from Green Hydrogen, and 210 millions from Blue Hydrogen. The demand breakdown is conservative but still far away from today capacities.
Consequently, this production means it will require in 2050 about 3,600 GW of electrolyzer capacity (300MW today) and 14,500 TWh of clean electricity production.
As a result of this need, it translates into a 66% growth year to year for the hydrogen market from today to 2030. Thereafter, a 23% growth year to year on the period 2030 – 2050.
In conclusion, Hydrogen is a complete new market developing, with technology bricks still in development. For actors of the energy industry it is the right moment to join as pilot projects and demonstrators are starting. It is also a great opportunity to transfer know how and take part of a growing market with long-term perspectives.
Are you ready to jump in ? We can help you do it
With our project database www.projectsmartexplorer.com we help companies around the world enter the hydrogen market through data and expertise. Do not hesitate to contact us if you are interested.
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