Green hydrogen to outcompete fossil fuels by 2040

IMAGE CREDIT:
Image credit
iStock

Green hydrogen to outcompete fossil fuels by 2040

Green hydrogen to outcompete fossil fuels by 2040

Subheading text
Hydrogen made from renewable power will compete on price with producing gas from fossil fuels within two decades.
    • Author:
    • Author name
      Quantumrun Foresight
    • January 29, 2022

    Post text

    The cost of green hydrogen will drop 64% by 2040, according to the research firm, Wood Mackenzie Ltd.

    Hydrogen context

    Today, most hydrogen is used for oil refining and is made from natural gas (as a by-product). This production process releases about 830 million tonnes of carbon dioxide per year, equivalent to the output of the U.K. and Indonesia combined. However, by using energy from renewables, it becomes possible to cheaply produce hydrogen from water via electrolysis, thereby creating hydrogen without the carbon dioxide; this is where ‘green hydrogen’ gets its name. This green hydrogen can then be stored and transported internationally and ultimately used to power vehicles or entire electrical grids.

    Disruptive impact

    This development could be a game-changer since energy sectors worldwide are already facing many challenges as they pivot from non-renewable to renewable and clean energy sources to meet emerging international emissions standards. For example, much of the existing energy infrastructure (from energy grids to gas pipelines) will have to be retrofitted and extended to account for the different properties and behaviors of energy sources growing in popularity, particularly, hydrogen. 

    These efforts will require a considerable upfront investment in environmental studies, technologies, and staff upskilling efforts. Energy sector workers who’ve worked with non-renewable energy sources like gas and coal will require additional training to transition to working safely and effectively with cleaner energy sources, like green hydrogen. 

    This shift will occur throughout the 2020s, as countries like Germany, Australia, and Japan invest billions of dollars into local green hydrogen production and importing infrastructure.

    Applications for hydrogen production

    Green hydrogen can be used to:

    • Fuel vehicles designed to run on hydrogen, especially heavy-duty vehicles like transport trucks.
    • Entire factories and heavy refineries could be powered by green hydrogen, which would significantly decarbonize the heavy industries.
    • Countries with lots of sun but limited oil and gas reserves (like Australia and Chile) have the potential to become energy exporters to G7 countries.

    Questions to comment on

    The growth of green hydrogen production is likely a net positive for the current carbon-intensive energy industry, as it gives gas refineries (for example) an option to be retrofitted to hydrogen production or import/exportation, instead of being mothballed entirely by solar and wind.

    That said, would it not be more efficient to power cities and vehicles purely through electricity generated by renewables, instead of first converting renewables into hydrogen, which is costlier to move around?

    Community forecast feedback

    View the community's ratings after you leave your own below.

    Average year

    All readers

    Average year

    Qr readers

    --

    Average vote

    All readers

    Average vote

    Qr readers

    --

    Average vote

    All readers

    Average vote

    Qr readers

    --

    Average vote

    All readers

    Average vote

    Quantumrun readers

    --
    --
    --

    Average vote

    Company readers

    Insight references

    The following popular and institutional links were referenced for this insight: