Hydrogen can enable renewable to provide an even greater contribution to the low-carbon transition but governments and companies need to take “ambitious and real world actions” to unlock the full potential of the gas, according to a new report from the International Energy Agency.
The report – ‘The Future of Hydrogen’ – said this is a “critical year for hydrogen” as now is the time to scale up technologies to help bring down costs to allow the gas to be more widely used.
Hydrogen is a leading option for storing energy from renewables and “looks promising” to be the lowest-cost option for storage, IEA said.
It added that hydrogen and hydrogen-based fuels can transport energy from renewables over long distances from “regions with abundant solar and wind resources, such as Australia or Latin America, to energy-hungry cities thousands of kilometres away”.
However, producing the gas from low-carbon energy is currently costly.
IEA said the cost of producing hydrogen from renewable electricity could fall 30% by 2030 as a result of declining costs of clean power and the scaling up of hydrogen production.
Fuel cells, refuelling equipment and electrolysers – which produce hydrogen from electricity and water – could all benefit from mass manufacturing, the report added.
The development of hydrogen infrastructure is slow at the moment and so holding back widespread adoption.
“Hydrogen prices for consumers are highly dependent on how many refuelling stations there are, how often they are used and how much hydrogen is delivered per day,” IEA said
“Tackling this is likely to require planning and coordination that brings together national and local governments, industry and investors.”
The report also warned that as most of the current hydrogen supply is from natural gas and coal there will need to be ways to capture the CO2 emissions produced in the process and a scaling up of supplies from clean electricity.
Current regulations will also need to change to release the potential offered by hydrogen.
“Government and industry must work together to ensure existing regulations are not an unnecessary barrier to investment,” IEA said.
The report made seven recommendations to scale up hydrogen production.
First, a role for hydrogen must be established in long-term energy strategies.
Second, policies must be put in place to stimulate commercial demand for the the gas in order to scale-up supply chains and drive down costs.
Third, first movers must be protected from investment risk. Targeted and time-limited loans, guarantees and other tools can help the private sector to invest, learn and share risks and rewards.
Fourth, support must be given to research and development to help bring down costs.
Fifth, unnecessary barriers to development must be removed and standards harmonised.
Sixth, international cooperation mist be promoted and progress towards long-term goals tracked.
Seventh, the focus should be on four key objectives to further increase momentum over the next 10 years.
They are: make the most of existing industrial ports to turn them into hubs for lower-cost, lower-carbon hydrogen; use existing gas infrastructure to spur new clean hydrogen supplies; support transport fleets, freight and corridors to make fuel-cell vehicles more competitive; and establish the first shipping routes to kick-start the international hydrogen trade.