Hydrogen trends and opportunities: Highlights and key take-outs
Moderator
Utku Ünver, Partner, Istanbul (on secondment to Pekin Bayar Mizrahi)
Speakers
Rebecca Abou-Chedid, Partner, Washington, DC
Sarah Devine , Partner, Washington, DC
In this webinar Hydrogen trends and opportunities, Utku Ünver, Rebecca Abou-Chedid and Sarah Devine discussed how hydrogen may be one of the most effective solutions to generating energy in the context of decarbonization and thus presents a critical opportunity to address global climate change on a mass level . They underlined that although most hydrogen-generated energy today is fossil fuel-based and hydrogen production is not yet cost-effective, the subsidy of governments to support carbon-free “green” hydrogen, the development of hydrogen production capacity, storage and transportation markets will be important for international hydrogen value-chains to emerge.
Sarah Devine discussed the high energy density of hydrogen, which contributes to its many derivative uses, including power generation, heating, electricity generation, as fuel for transportation. Hydrogen can be used in many industries, such as refining petroleum, producing fertilizer, petrochemical production, and steel production. It also can be used in all modes of transportation by powering zero-emission vehicles. She added that, as such, hydrogen facilitates decarbonization, especially in industries where a high level of energy is used. Mining, which uses massive energy in extraction and heavy transportation for deliveries; shipping and aviation, both of which need large amounts of fuel, may be the leading industries to benefit from the mass energy created from breaking of hydrogen.
With an expected demand growth of 9% in 2023, Rebecca Abou-Chedid explained the colours of hydrogen, which are based on hydrogen’s source, output and by-products. She described that black, brown and gray are generated by breaking down coal or natural gas with the by-product carbon being released into the atmosphere, blue is generated by using these same resources but the carbon is stored, while turqoise means the source is natural gas and solid carbon is the by-product, which can later be used as plastic, tires or construction material. Rebecca Abou-Chedid underlined that, among these alternatives, the real game changer from a renewable energy perspective is green hydrogen which is generated by using wind or solar energy in a carbon-free way. The challenge today is that cost-effective hydrogen production is very carbon-intensive, thus it requires subsidization from governments to be transformed into being carbon-free at all levels from extraction and production to the technology needed to move it in the mid-stream and to deliver it downstream. She concluded that this situation is similar to the initial stages of the solar energy sector thirty years ago.
After describing the fundamentals of hydrogen, the speakers then discussed how emerging markets are expected to be integrated into its ecosystem. The speakers explained that emerging markets can be the main exporters of hydrogen to Europe and North America, with sun and water-rich South America, South Africa and Australia as potential exporters of the blue and green hydrogen, and countries in the Asia-Pacific regionas developers and exporters of hydrogen production technology.
In the context of emerging markets, Utku Ünver talked about Turkey’s renewable energy agenda and stated that although hydrogen was first mentioned as a renewable energy source in the Energy Efficiency Law in 2007, a legislation outlining procedures for producing green hydrogen is not yet in place. As a recent step, Ministry of Energy published a hydrogen strategy and roadmap, describing hydrogen as a key component in achieving Turkey’s net-zero carbon target in 2053. Two main aims are set in this paper; reduction of cost of green hydrogen production and increasing installed capacity for electrolysis by initiation of new incentives and certification programs. Absence of regulations slows establishment of hydrogen power plants in general, but the first plant is recently opened in Balıkesir province of Turkey and legislation and incentives are needed for advancement in establishment of more.
It was mentioned that in Europe, the European Union’s “Fit for 55” and “Repower EU” programs put much focus on hydrogen and energy transition. Europe, along with US and China, is taking a leading role in hydrogen space by initiating development of international infrastructure, electrolysis productions in sub-Saharan Africa and financing green hydrogen projects in Egypt. With Germany taking the lead to meet its large-scale industry’s energy needs with more renewable energy, we may see pipelines carrying Africa’s hydrogen into Europe in the near future and increased electrolysis production utilizing its platinum resources.
All three speakers concluded by discussing the prospects and challenges for hydrogen competing with other renewable energy sources in the foreseeable future. Challenges include the need for standardization of its definition categories globally by international organizations; development of the infrastructure needed for its production and its distribution on a global level; and the need for development of hydrogen-specific infrastructure which is different from that which currently exists. On a final note, the panelists concluded that the best approach for optimizing hydrogen’s benefits was to fit hydrogen into the picture with other “green” resources.
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