Serene Esuruoso on the barriers that need to be overcome for the hydrogen economy to be a reality

Climate Action caught up with Serene Esuruoso, Associate at the Carbon Trust, to discuss the barriers that need to be overcome for the hydrogen economy to be a reality.

What would you say is the main barrier to the hydrogen economy from becoming a reality, and why?

When thinking about hydrogen, there is a tendency for different stakeholders to take a binary view about how hydrogen should be produced or which parts of the economy it should be used in, leading to a highly divisive discourse. This is currently resulting in a lack of impartial evidence to support decision making around hydrogen and therefore a lack of clarity on how best to advance the sector that will deliver the best overall outcome.

A key activity that should be undertaken now is understanding what the most appropriate and suitable role for hydrogen is to contribute to a net zero energy system. This will depend on a number of factors including local resources, consumer acceptance, infrastructure availability and more. Future business models and the Government’s upcoming UK Hydrogen Strategy will also have an impact.

The end goal should be to create a hydrogen economy that enables the UK to reach net zero in the most cost-effective way. Taking a whole systems view will allow us to see more clearly and join the dots across the economy to enable this cost-effective transition.  

Why is the development of the hydrogen economy different and more complex compared to the success story of renewable power generation and battery-electric vehicles?

Unlike renewable power generation, hydrogen does not have an existing distribution infrastructure or an underlying market to bring together supply and demand in an effective way. Additionally, the supply chain (including production) is also at an earlier stage of development compared with renewables and battery-electric vehicles. While hydrogen’s applicability across the economy presents a great opportunity for deep decarbonisation, these factors makes it very complex to roll out.

In addition, hydrogen’s ability to act as an energy vector rather than an energy producer or consumer means there are many options available along each stage of the value chain. There are a multitude of production routes, different modes of transporting hydrogen and a wide variety application across a range of end-use sectors. Hydrogen can even be stored and used to generate power again, and the modular nature of hydrogen production technology means that it can be collocated with end-uses on a small scale, or large-scale production plants can be installed. Each additional option creates a challenge alongside the potential it offers.

Different countries are taking different approaches to the development of the hydrogen economy. Germany and Japan have stated that they intend to be net importers to serve different demand centres, whereas Chile and Australia have plans primarily to focus on hydrogen production and export. There are also countries such as the UK which can both produce and consume hydrogen, creating additional complexities on a national and international scale. A combination of enabling infrastructure, varied demand and a low cost of renewable energy creates opportunities for hydrogen supply and use simultaneously. Countries in this situation face the additional challenge of ensuring they don’t lock into a scenario that could lead to a sub-optimal outcome in the long-term.

In what sector do you think low carbon hydrogen has the biggest potential and why?

In many end use cases, hydrogen is one of several viable routes to decarbonise demand. The exception to this is heavy industry (particularly high temperature processes), where the lack of alternatives available to displace carbon intensive fuels typically used makes hydrogen a clear choice. For this reason, low carbon hydrogen has the biggest potential to start off in this sector.

Industrial-use of hydrogen can act as a high-demand anchor point, which opens up the possibility to achieve economies of scale on a regional basis. This then can be used to supply other end use cases such as transport and heating. The increasingly decentralised nature of the UK’s energy system has already seen a shift to a diversification of production. The regional route to scale for hydrogen will build on that, creating a heterogeneous energy system across countries such as the UK.

In what ways would a strategy underpinned by a whole systems approach get the full benefits from Hydrogen?

For countries to get the full benefits from hydrogen, a whole systems approach is critical. The nature of hydrogen means that it can have a role and/or an effect on virtually every part of the energy system (and beyond). It’s therefore important to maintain a wide perspective and consider as much of the system as possible when developing a hydrogen strategy.

As we transition to an increasingly distributed, low carbon system, we will continue to see a greater interaction between previously siloed energy networks, vectors and sectors. Understanding the opportunities and most valuable applications for hydrogen through the lens of the full system with regards to geographies, end use sectors, other technologies and more will support our ability to roll out the hydrogen economy in a least-regrets way that aligns with a net zero future.

What policies/frameworks/pathways will be vital in stimulating the demand side whilst simultaneously bringing down production costs?

A whole system view that considers the entire value chain will be required to enable all parts of the hydrogen economy to scale effectively. Delivering on the ambitions for hydrogen will require substantial developments in technology, energy market dynamics and economics, policy and regulation, and in consumer behaviour.​ This requires a socio-technical and whole systems approach to serve as the basis for a framework to guide decision making and unlock the hydrogen economy in the most effective way.