According to Goldman Sachs, a prominent bank and think tank, hydrogen plays a critical role in the transition to a net-zero carbon emission scenario, and hydrogen generation has the potential to generate a niche market worth more than $1 trillion per year.
Michele DellaVigna, Goldman Sachs’ commodities equity business sector leader for the EMEA area, stated in a recent media interview that the world cannot achieve net-zero carbon through renewable energy alone and that hydrogen can replace natural gas to manage seasonality and intermittency.
He cited previous research released by the bank in early February, which anticipated that by 2050, the worldwide market for hydrogen generation may be worth more than $1 trillion. The market is currently valued at roughly $125 billion. This study report was co-authored by DellaVigna. He also believes that stock investors should seek methods to profit from the predicted growth of clean energy and that there are two effective ways to invest in hydrogen.
Investors can put their money into electrolyzer firms that produce pure hydrogen, or they can put their money into conglomerates like gas companies, energy service companies, and oil & gas corporations that use hydrogen in their operations.
He based his forecasts for the hydrogen market on the vast range of uses for the fuel, which can be utilized in a variety of industries including heavy transportation, heating, and heavy industry.
He also underlined the need for green hydrogen generating technologies in achieving a net-zero carbon planet. The idea is to produce hydrogen without emitting carbon dioxide. Electrolysis, in which an electric current divides water into oxygen and hydrogen components, is one of the finest techniques for producing green hydrogen. However, in order for the process to be considered “clean,” the power utilized in it must originate from renewable sources such as wind or solar.
Natural gas, which emits CO2, is used to create blue hydrogen. This carbon must be sequestered and collected. “Whether we do it with electrolysis or carbon capture, we need to make hydrogen in a clean way,” DellaVigna argues.
He estimates that these solutions will allow hydrogen to grab at least 15% of global markets, amounting to more than $1 trillion per year in the near future. He also claims that hydrogen will soon be able to replace natural gas.
