As the world adjusts to the “new” normal that the pandemic has thrust on us, there is still the growing challenge of climate change and the questions of how both industry and the general public meet the challenges of a transition to a low-carbon future. Even with the significant damage the pandemic has caused to the global economy, energy demand is still expected to rise over the next 30 years, as the world population increases, along with global GDP and living standards. So world governments are faced with a dual challenge: meeting the increased demand for energy and at the same time charting a credible decarbonisation path to a low-carbon global economy.
A review of the total primary energy demand illustrates the current state of the global energy mix and how it is anticipated to change in the years to come. An analysis of 2020’s 3IEA’s World Energy Outlook1 and OPEC’s World Oil Outlook2 shows a significant increase in overall renewables (e.g. Solar, Wind, Hydro) from now through to 2030/45. However, it also suggests that oil, gas and coal will continue to play a significant role for the immediate future. These views of the future represent little in the way of new regulations issued by national governments to influence decision-making in the energy sector and will not result in achieving the Paris Agreement emission and temperature reductions.
It is difficult to postulate whether and what new regulations could come into being. However, many organisations, including the IEA, have made forecasts3 on what needs to occur in terms of changes in the global economy over the next 20 years or so. This projection suggests a large swing to renewables moving up to a 29% share of the primary energy demand, over the same period as above.
Additional to this fuel mix shift, there is also a general move where renewables will provide 50-60% of the electrical power generation pool, with solar being the most prominent of the renewable types. From a range of organisations who are analysing the future global energy landscape, there is broad agreement that renewables will become more prominent, which is probably not a great surprise. However, what maybe more of a surprise is the continued significant role that oil and coal may play through this period.
For the global economy to move forward and meet its climate change objectives, other options need to be considered for inclusion into a decarbonisation pathway to a low-carbon economy, as renewables alone cannot meet the demand.
There are many possible options but one that hold real promise - albeit currently clouded in uncertainty - is hydrogen.
Hydrogen has been considered many times over the years as a fuel source without it gaining any traction. This is somewhat puzzling, as hydrogen can play multiple roles in a de-carbonisation pathway, providing a welcome degree of flexibility. Furthermore, hydrogen has been used in industry for many years; as such, the requirements and risks around processing, transporting and storing activities are well understood. The many ways that hydrogen can potentially be employed in the drive to a low-carbon economy are extensive, but this may be part of the reason why uncertainty still exists on where to invest.
As we can see from Figure 5 to the later in this article, there are many ways to produce and consume hydrogen, but all manufacturing approaches are not considered equal when viewed from a climate change perspective. This is expressed in the “colour of hydrogen” and is an important factor when considering the role that hydrogen may play in the journey to a low-carbon environment.
The production of hydrogen using electrical power generated from renewables – Green Hydrogen – is the ultimate goal for many who are active in the decarbonisation arena, as it holds great attraction as a means of displacing many fossil fuels from the transport sector.
However, focusing on the near-term transition period, this doesn’t seem to be a prudent course of action. Given the direct impact that renewables electricity can have on powering electric cars, thereby displacing the use of traditional internal combustion engine cars, it would seem wasteful to convert this electricity to hydrogen, transport it to filling stations and then, through hydrogen fuel cells, convert it back into electricity.
Furthermore, due to the relatively small quantities that may initially be available and where it will be generated, perhaps a more modest use of green hydrogen should be considered in the years ahead. For example, more prudent applications in the short term could be in the following areas:
There are other possible uses for hydrogen, but these applicates may be better serviced by Blue Hydrogen.
Blue Hydrogen is created from fossil sources, where the carbon emissions are captured and stored. The potential advantage of blue hydrogen is that it is can be developed at scale and can either be produced from new purpose-built facilities or from current grey (natural gas) and brown (coal) hydrogen production assets. Both options offer significant carbon reduction possibilities, although not as much as green hydrogen; for example, blue hydrogen is reported to be up to 90% efficient at carbon reduction6.
Due to the production levels that can be achieved, there are a large range of benefits by adopting blue hydrogen:
Additional to this point, as many of these metals are only found in specific countries, it is possible that their supply could well be used in a geopolitical manner. So, hydrogen would also offer a pathway to energy security which shouldn’t be overlooked.
All these benefits are based on Carbon Capture Storage (CCS CCUS) technology being available and commercially viable. There are currently around 20+ projects being developed; however, governments and industry need to work together to clarify the regulator landscape and accelerate the deployment. Not only does CCS unlock Blue Hydrogen’s potential but may well assist other industry sectors reduce their carbon footprint, so the potential benefits are significant.
If the global community wish to meet key climate change goals such the Paris Agreement, then hydrogen development and utilisation needs to be embraced and fast-tracked. As part of this, we shouldn’t shy away from including Blue Hydrogen into the energy mix (which includes deploying CCS/CCUS options), as it can provide scale and enable increased investment in infrastructure. Concerns that are raised in some quarters that accepting Blue Hydrogen into the decarbonisation pathway could lead to stagnation, which could eventually move on to Green Hydrogen are, I believe, unfounded at this stage. Adopting Blue Hydrogen (and CCUS) would result in a rapid reduction in CO2 emission levels; that in itself would create quite an impact, in that these levels would not be reached so fast if they had not been adopted and embraced. Given the potential benefits, it seems an acceptable leap of faith for the world to to make, in order to build much needed momentum towards a low-carbon economy.
Alan McShane is Executive Director and Engineering Manager, Natural Resources, Willis Towers Watson. alan.mcshane@WillisTowersWatson.com
1 https://www.iea.org/reports/world-energy-outlook-2020 2 https://woo.opec.org/pdf-download/ 3 IEA Sustainable Development Scenario (SDS) - where a surge in clean energy polices and investment put the energy system on track to achieve sustainable energy objectives in full, including the Paris Agreement, energy access and air quality goals. 4 Siemens Energy Insurance Meeting – Nov 17-19, 2020., https://www.siemens-energy.com, https://www.ge.com/power/gas/, https://www.iea.org/reports/hydrogen 5 https://www.iea.org/reports/hydrogen 6 ioconsulting.com/what-colour-is-your-hydrogen/, https://about/bnef.com/blog/liebreich-separating-hype-from-hydrogen-part-one-the-supply-side/
