Governments, energy providers, and environmentalists have all been working together in recent years to promote the use of clean hydrogen energy on a larger scale.
A report by the International Renewable Energy Agency (IRENA) entitled “Geopolitics of the Energy Transformation: The Hydrogen Factor” was released in January 2022, and it proclaimed hydrogen as the “missing piece of the clean energy puzzle” and explained how this transition would affect geopolitics and the global economy. An emerging clean hydrogen energy source, according to IRENA, is expected to transform global trade ties, boost energy independence in countries throughout the world and move geopolitical influence away from oil and natural gas heavyweights, such as Russia, and the United Arab Emirates (UAE).
Hydrogen Energy’s Long-Term Prospects
Despite major obstacles to the widespread use of green hydrogen, pricing estimates indicate that these obstacles may be overcome.
The price of green hydrogen is predicted to decrease below the price of blue hydrogen by 2030 in places with significant renewable energy output, and by 2050 in the majority of other locations. This comes at a time when blue hydrogen is increasingly being attacked for its damaging, if inadvertent, the release of fugitive methane emissions and lack of international norms or control.
IRENE’s study of 164 nations and the EU found that 55% of respondents preferred green hydrogen, while fewer than 5% preferred grey or blue hydrogen in their national hydrogen plans..
Is There a Chance for a More Secure Energy Future?
International Renewable Energy Agency (IRENA) predicts that a green hydrogen-powered global energy economy will result in increased energy independence and resilience, reducing import dependency, mitigating price volatility, and increasing the flexibility and resilience of the energy system through diversification. Global energy markets have recently been plagued by an overpowering feeling of rivalry rather than collaboration, and traditional energy supplies are increasingly being used as weapons.
Energy security and geopolitical tensions might be reduced by lowering the oil and gas market’s dependence on imports, according to experts. In spite of the fact that almost 80 percent of countries are net oil importers, any country has the ability to manufacture green hydrogen if it has the necessary resources and investment. Hydrogen diplomacy is on the increase in Germany and Japan as a result of the growing importance of hydrogen in national resilience, according to IRENA. The establishment of Hydrogen Diplomacy Offices in Ukraine and Nigeria, for example, was announced by the German government in January 2021 in order to foster new economic relations and provide a reliable supply of green hydrogen. What will come of our hydrogen diplomacy efforts with Ukraine is currently in limbo.
Energy exports are set to take off in several nations that are now importers of oil and gas. Wind and solar power have the most promise for developing countries in Africa, the Americas, and Oceania. Exporting green hydrogen is already a priority for countries that rely heavily on imports.
IRENA forecasts a major change away from the energy ties of the 20th century as the high cost of delivering hydrogen energy defines new bilateral trade routes. Political dynamics will move in tandem with changes in economic ties.
The Next Step
Clean hydrogen’s worldwide scale-up faces significant hurdles. To become green hydrogen powerhouses, developing nations must make significant investments in infrastructure, have readily available cash, and have access to required technology. IRENA’s analysis found that hydrogen commerce will face “very likely” hazards due to a lack of decarbonized power, pricing issues, and an unpredictable investment climate for potential exporters by 2050. With the growing dominance of low-cost electrolyzers in China, many regions will be vulnerable to new geopolitical pressure.
The hydrogen economy, like oil and gas, will be less lucrative. “[The] chances of extracting economic rents equivalent to those created by fossil fuels, which presently account for roughly 2% of global GDP, [would be restricted].” Global energy production will increase the competitiveness of the green hydrogen economy. When it comes to compensating for lost income, oil exporters will have a difficult time finding alternative energy sources. The influence of oil and gas firms in favor of a blue hydrogen future, rather than a green one, is an additional hurdle to scaling up.
