06.10.2021 | PwC study on hydrogen

Demand could boom as of 2030

By 2050, the global demand for hydrogen will grow strongly – from currently 76 to 500 mega-tonnes per year – provided that the required H2 infrastructure is in place. This is the finding of a study conducted by the World Energy Council (WEC in collaboration with Pricewaterhouse Coopers (PwC) and the Electric Research Institute (EPRI). 

Various energy scenarios and strategy developments were assessed and 38 experts from 23 different countries were interviewed for the study "Hydrogen on the Horizon: Ready, almost set, go?". These countries represent 61 per cent of global energy production and contribute about 70 per cent of the global gross domestic product. 

The study estimates a hydrogen share of 6 to 27 per cent in worldwide energy consumption by the year 2050. This range is quite wide. The share depends on hydrogen production costs, the necessary infrastructure, as well as the technological degree of maturity. It varies based on the climate goals set by the countries around the world. If global warming is limited to 1.8 degrees centigrade by 2050, significantly more hydrogen will be needed as opposed to a limit of 2.3 degrees centigrade. 

Not yet cost competitive

According to the study, the following factors are stifling the establishment of hydrogen in the energy system: 

  1. In comparison to other energy sources, the costs to produce green, CO2-free hydrogen are currently not competitive in most areas of application and at most locations. This is likely to remain unchanged without any massive support for its production. However, important political players are sending out encouraging signals to the market: With the appropriate policies and a more mature H2 technology, green hydrogen could become cost competitive as soon as 2030.
  2. Since the hydrogen economy is at an embryonic stage of development, it faces the "chicken and egg problem" between supply and demand, both lacking secure volumes from the other to help establish the value chain.
  3. The numerous hydrogen technologies are at different levels of maturity. 
  4. The discussion around the various hydrogen production methods (details here) are an obstacle for important innovations and practical, cost-efficient technologies.
Developing infrastructure now

As of 2030, the study authors expect a possible surge in demand. In their view, the current decade must be used to develop the necessary infrastructure for production, transport, import, marketing and use of hydrogen. In “E&M daily”, Folker Trepte, Head of the Energy Business at PwC, says "We must act  now, in Germany, the EU and on a global scale to create an effective structure for hydrogen." That is the only way to succeed in fulfilling strong growing demand with the appropriate supply and to achieve the Paris climate goals. 

Partnerships important

The hydrogen strategies of the surveyed countries diverge strongly: Countries in southern regions (Near East, North Africa) that can produce green hydrogen at low costs want to export large quantities to countries with high demand and low production potential. In contrast, Asia and Europe are focusing on demand in order to decarbonise the CO2-intensive industrial and transport sectors. According to the study, these strategies reflect price prognoses: In Australia, Chile and many African states, hydrogen production costs are significantly lower than in the densely populated areas in Europe or Asia. As a result, international hydrogen partnerships are a key to support the global breakthrough of H2.  

You will find the study here

Link to the WEC website

 

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