After many false starts, hydrogen power might now be about to bear fruit
It’s a gas
The economics, then, seem to be pointing in the right direction for hydrogen to become, if not dominant, then at least an important part of the mix. The Hydrogen Council, a lobby group based in Brussels, thinks the gas could be satisfying 18% of the world’s energy demand by 2050. The share prices of firms that make fuel cells, electrolysis equipment and the like have consequently been marching upward.
Many of the assumptions made in various forecasts rely, however, on governments providing prodigious subsidies to develop the technology. BNEF says subsidies of around $150bn over the next ten years might be needed to make hydrogen competitive. In reality, the IEA reckons that total government spending on hydrogen in 2018 was just $724m.
Official interest is certainly picking up, though. On June 10th Germany announced a €7bn subsidy programme aimed at making it the “world leader” in the technology. A leaked draft of the European Union’s post-covid stimulus plan contains an ambition to install 40GW of green hydrogen capacity by 2030. China hopes to see 1m fuel-cell-powered vehicles on the roads by the same year. Japan, long a fan of hydrogen, wants its price to fall by 90% by 2050. As to retooling vast swathes of the global energy system to accommodate this change, Dr Bhavnagri calculates that replacing natural gas with hydrogen would mean tripling or quadrupling the world’s gas-storage infrastructure, at a cost of perhaps $600bn.
In the end, hydrogen’s impact will be limited by the basic fact that it is, ultimately, just electricity in disguise. It remains an inescapably inefficient option. For some applications, though, its advantages—its energy density, its ability to burn and its compatibility with existing infrastructure—could make it an attractive fit despite that drawback. To paraphrase another famous advert, then, the hope is that hydrogen might prove to be the Heineken of clean energy: able to refresh the parts of an economy that electrification cannot reach. ■