Consensus over hydrogen at COP26 can dramatically speed up the energy transition

November 1, 2021, 8:31 PM UTC
Renewable energy can be stored as hydrogen to be easily used across our existing energy infrastructure.
David Paul Morris—Bloomberg/Getty Images

We are on the cusp of an energy revolution that could see hydrogen play a key role in the way we bring fully decarbonized energy to our homes, offices, and factories.

In 2004 when I was working at Enel, I went to Japan and studied hydrogen. I wrote a report saying, “I love this technology, but it will never work. It’s too expensive.” I was a skeptic, but I was converted four years ago by my team here at Snam. I wrote a story with them that showed how powerful hydrogen can be in the battle against climate change, and how necessary hydrogen is to wean the world off hydrocarbons and put it on a path to net zero.

The fact that renewable electricity is now so cheap to produce is a game changer. Not only does it allow renewables to gradually replace fossil fuels in power generation, but it enables clean energy to reach new sectors in which direct electrification is either too costly or difficult.

For the energy transition to succeed, we need to move vast amounts of intermittent solar and wind energy from where it is ample and cheap to where it is consumed. This is where hydrogen steps in, not as a primary energy source but rather as an energy carrier.

Green hydrogen, which is produced by splitting water with green electricity, is by far the most cost-effective and efficient way of moving energy over long distances, especially when using the existing gas infrastructure. The additional cost of using green hydrogen instead of fossil fuels is minimal. Manufacturing a car with steel made from green hydrogen adds less than 1% to the cost.

Hydrogen is also far easier to store over long periods of time. It is often the cheapest and sometimes the only option to fully decarbonize heavy industry, long-distance mobility, and winter heating. It also provides the resilience and flexibility the energy system so badly needs to avoid extreme price volatility and blackouts.

By 2050, clean hydrogen will make up as much as 25% of our net-zero energy mix, according to Bloomberg New Energy Finance (BNEF), generating a $20 trillion infrastructure investment opportunity, new technologies, companies, jobs, and ultimately a cheaper energy system than we have now.

So as the policymakers, media, scientists, and businesses make plans in Glasgow, here are my four suggestions to speed up the development of hydrogen by a decade, saving 40 gigatonnes of emissions and $2.5 trillion in abatement costs.

1. Let’s define what “clean” hydrogen really is. Some methods of producing hydrogen emit significant quantities of CO2. We need a global organization to define and certify what counts as “clean,” expressed in terms of grams of CO2-equivalent emissions along the value chain for every kilogram of hydrogen produced. This will enable clean hydrogen to be traded across markets and different colors of hydrogen to compete, reducing cost and increasing liquidity and security.

2. We can create visible demand. Governments, regions, cities, and companies should announce clear hydrogen targets. This could be backed up with measures such as including mandatory quotas for certain sectors, or incentives to cover the extra cost of using green hydrogen compared with existing fuels.

3. We can leverage development. Green investment should be funneled to those countries with more space, sunlight, or wind. These are often developing countries, so at the same time, this would allow developed nations to make good on their promise to mobilize $100 billion a year in climate finance.

To cut the time required for this money to be deployed, a collaboration between international financial institutions and the private sector should build standardized, replicable, and bankable projects. For instance, as existing coal plants are phased out, they could be transformed into renewable/hydrogen hubs, generating soon-to-be-cheaper energy.

4. A system of eco-labeling would enable consumers to signal their willingness to pay for green products, which will boost the development of the market.

So when the dust settles in Glasgow, hopefully, hydrogen will have secured its place as a game-changing fuel of the future.

Marco Alverà is the CEO of Snam and the author of The Hydrogen Revolution.

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