Hydrogen would meet 12pc of final energy use by 2050, according to new estimations from the International Renewable Energy Agency (Irena). The forecast considers the fact that low-carbon hydrogen will become more cost-competitive in the future, and the expansion of policies to limit the world’s temperature below 1,5 degrees.
Firstly, the forecast comes in Irena’s Geopolitics of the Energy Transformation report. The report forecasts that hydrogen global demand will nearly quadruple to around 410mn t/yr; from 120mn t/yr in 2020, by 2050.
Moreover, such an increase in demand will have a mix of renewable hydrogen supplying two-thirds and a third for blue. The difference between the two is that green comes from renewable electricity; while blue comes from gas, but has its carbon emissions captured.
In addition, grey H, the type of hydrogen that comes from fossil fuels will be entirely phased out, according to the report. By 2030, green H may become cost-competitive with blue H in China; India, and Brazil, where renewables are becoming cheap, versus expensive gas.
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New hydrogen players in the global market
The report notes. “The expected cost reduction in green hydrogen coupled with stricter climate mitigation policies means that investments in blue or grey hydrogen may end up stranded.” It also remarks. “Australia, Chile, Morocco, Saudi Arabia, and the United States are best placed to emerge as major clean hydrogen producers by 2050.”
Furthermore, the report notes that Australia, Saudi Arabia, and the US can retain their role as energy exporters; but countries such as Chile, Morocco, and Namibia could flip to become net exporters of energy; and “gain in geostrategic importance”.
Indeed, more than 30 countries now have hydrogen plans compared with only Japan in 2017. Consequently, the emergence of new players in the market will affect economic and political relations around the globe.
Finally, the report underlines that Japan, South Korea, and parts of Europe and Latin America will probably need imports to satisfy demand. It highlighted that Germany and Japan are already in talks to secure access to this type of fuel.
