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Hydrogen plays key role in decarbonization of utility sector

Arnes BiogradlijaBy Arnes Biogradlija09/05/20224 Mins Read
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Several governments are currently actively pursuing decarbonization plans, elevating the prominence of zero-carbon fuels, in an obvious and dramatic policy change throughout the world recently. The increased usage of zero-carbon fuels like green hydrogen is going to be an important role in the attempt to decarbonize as the utility sector undergoes the energy transition.

The push to combat global warming through decarbonization has gained traction in recent months, with the UAE, Saudi Arabia, and Bahrain (2050) announcing net-zero targets, as well as China (2060), Japan, South Korea, and Canada (all 2050), and the Biden administration recommitting the US to the Paris Agreement.

The global demand for hydrogen is presently approximately 8–10 exajoules (EJ), with the chemical sector accounting for the majority of consumption. Last summer, the EU released its hydrogen plan, with a goal of six gigawatts (GW) of power by 2024 and 40 GW by 2030. In the past year, Germany, Spain, Portugal, the Netherlands, Finland, Sweden, Poland, and Canada have released national hydrogen strategies. According to the Hydrogen Council’s “Hydrogen for Net Zero” report, hydrogen can fulfill nearly a fifth of final energy consumption at the lowest cost by mid-century, while another estimate claims that the world will require 1000 GW of electrolyzer capacity by 2050 to meet demand estimates.

According to the International Renewable Energy Agency, over 95 percent of global hydrogen generation now originates from fossil sources (IRENA). However, as the energy industry tackles various critical challenges, such as how to channel large amounts of electricity from renewable sources to sectors where decarbonization is otherwise difficult, such as industrial, transportation, and niche applications, hydrogen from renewable sources has the potential to play a key role.

Despite strong demand drivers and multiple possibilities for hydrogen on the horizon, the International Energy Agency (IEA) reports that demand for low-carbon hydrogen remains modest, restricted to road transport, and falling short of the Net Zero Emissions by 2050 Scenario criteria.

More efforts are needed to boost demand and minimize emissions related to hydrogen generation, according to the report.

“One of the most forward-looking energy supplies for companies is low-carbon fuels, notable hydrogen,” stated Ferdinand Varga, Managing Director and Senior Partner of Boston Consulting Group, the World Utility Congress’ Strategic Insights Partner. Meeting future demand for hydrogen will be difficult, since its production and delivery may require subsidies to bridge the gap with other low-carbon fuels—and, most critically, a sufficient supply of inexpensive renewable energy. Discussions on how hydrogen will play a vital role in the utility sector’s decarbonization will aid in determining when, where, and how players should engage.”

With solar and wind costs falling, as well as the scaling up of electrolyzer capacity and the accompanying supply chain, the economic case for green hydrogen has improved considerably. With the recent expansion of the green hydrogen project pipeline, there will be tremendous demand strain on the energy supply, which is still expensive.

The slow rate of renewable capacity development, which may offer dependable, cost-effective power for electrolyzers, is one barrier to the clean hydrogen future. Another factor is the limited funding available for hydrogen generation projects thus far, as well as slow demand from carbon-intensive industries like transportation.

“The world is quickly moving towards a decarbonized energy and utility industry, driven by net-zero promises to combat global warming,” said Christopher Hudson, President of dmg events, the World Utilities Congress organizers. There is a strong argument for hydrogen, which offers various options in the future, but world leaders will need to work together to guarantee that the sector’s long-term growth keeps pace with increasing demand in order to achieve the needed decarbonization goals.”

At the World Utilities Congress, the significance of hydrogen in the future of the utility industry will be highlighted in a dedicated spotlight session titled “What will it take for hydrogen to become the low-carbon champion?” The event will feature a focused conversation with Gareth Wynn, TAQA’s Chief Communications Officer, on the role of hydrogen in the utilities sector’s energy transformation.

As the globe strives to expedite the energy transition in the face of global warming concerns and net-zero obligations, hydrogen will be debated in global leadership panels on meeting growing power demand and prospects for utilities.

The World Utilities Congress will be held in Abu Dhabi’s ADNEC from the 9th to the 11th of May, with over 10,000 worldwide utility experts expected to attend to learn more about crucial themes affecting the future of low-carbon electricity and water supply. The Congress will be sponsored by TAQA and will be attended by H.H. Sheikh Khaled bin Mohammed bin Zayed Al Nahyan, member of the Executive Council and Chairman of the Abu Dhabi Executive Office.

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