In his introduction to this report, Remi Eriksen, Group president and CEO of DNV, writes as follows:
Welcome to DNV’s first standalone forecast of hydrogen in the energy transition through to 2050. While there are ambitious statements about the prominent role that hydrogen could play in the energy transition, the amount of low-carbon and renewable hydrogen currently being produced is negligible.
That, of course, will change. But the key questions are, when and by how much? We find that hydrogen is likely to satisfy just 5% of global energy demand by 2050 — two thirds less than it should be in a net zero pathway. Clearly, much stronger policies are needed globally to push hydrogen to levels required to meet the Paris Agreement.
Here it is instructive to look at the enabling policies in Europe where hydrogen will likely be 11% of the energy mix by 2050. Five percent globally translates into more than 200 million tonnes of hydrogen as an energy carrier, which is still a significant number. One fifth of this amount is ammonia, a further fifth comprises e-fuels like e-methanol and clean aviation fuel, with the remainder pure hydrogen. Hydrogen is the most abundant element in the universe, but only available to us locked up in compounds like fossil fuels, gasses and water. It takes a great deal of energy to liberate those hydrogen molecules — either in ‘blue’ form via steam methane reforming of natural gas with CCS, or as ‘green’ hydrogen from water and renewable electricity via electrolysis.
By 2050, more than 70% of hydrogen will be green. Owing to the energy losses involved in making green hydrogen, renewables should ideally first be used to chase coal and, to some extent, natural gas, out of the electricity mix. In practice, there will be some overlap, because hydrogen is an important form of storage for variable renewables. But it is inescapable that wind and solar PV are prerequisites for green hydrogen; the higher our ambitions, the greater the build-out of those sources must be.
Hydrogen is expensive and inefficient compared with direct electrification. In many ways, it should be thought of as the low-carbon energy source of last resort. However, it is desperately needed. Hydrogen is especially needed in those sectors which are difficult or impossible to electrify, like aviation, shipping, and high-heat industrial processes. In certain countries, like the UK, hydrogen can to some extent be delivered to end users by existing gas distribution networks at lower costs than a wholesale switch to electricity.
Because hydrogen is crucial for decarbonization, safety must not become its Achilles heel. DNV is leading critical work in this regard: hydrogen facilities can be engineered to be as safe or better than widely-accepted natural gas facilities. That means safety measures must be designed into hydrogen production and distribution systems, which must be properly operated and maintained throughout their life cycles. The same approach must extend to the hydrogen carrier, ammonia, which will be heavily used to decarbonize shipping. There, toxicity is a key concern, and must be managed accordingly.
It is no easy task to analyse the technologies and policies that will kick-start and scale hydrogen and then model how hydrogen will compete with other energy carriers. As we explain in this report, there will be many hydrogen value chains, competing not just on cost, but on timing, geography, emission intensity, risk acceptance criteria, purity, and adaptability to end-use. I commend the work my colleagues have done in bringing this important forecast to you, and, as always, look forward to your feedback.
Download the report: DNV 2022 Hydrogen Report