By 2035, green hydrogen would probably contribute less than 1% of the world’s total energy, though the European Union might do so a little sooner, around 2030. In particular, the EU’s 2030 goal of producing 10 million tons of green hydrogen domestically will be unachievable unless policymakers can encourage growth previously unheard of in the energy technology sector. A breakthrough to higher green hydrogen shares by 2040 is more likely, but there are still many unknowns, which raises the risks of today’s investments. But history shows that emergency-like policy actions could lead to noticeably higher growth rates, speeding up the discovery and making it more likely that hydrogen will be available in the future.
It has recently sparked a surge in interest and is essential to many scenarios involving net-zero emissions: Green hydrogen and its derived e-fuels are produced using electrolysis, a process that separates water molecules (H2O) into hydrogen and oxygen. “Many discussions and studies on hydrogen have centered on issues of demand-related applications, markets, and industry sectors.””Electrolysis is a supply technology that is still in its infancy and needs to experience rapid innovation and deployment in order to fully realize its potential for climate change mitigation; however, to date, no study has examined the bottleneck of potential expansion pathways for electrolysis,” The Potsdam Institute for Climate Impact Research (PIKAdrian )’s Odenweller, the study’s lead author, explains.
Green hydrogen advancement is not a given; forceful policy change is necessary.
The majority of electrolysers produced today are small and individually made, but global capacity must increase 6000–8000 times by 2050 in order to support climate neutrality scenarios that are compliant with the Paris Agreement. This is much bigger than the 10-fold increase in renewable energy that is also needed and is easy to get and cheap.
Using a computer simulation of how energy technologies spread and thousands of “potential worlds,” the research team looked at how likely and possible it would be to increase electrolysis capacities.
“It is by no means a given that green hydrogen will be widely successful. Falko Ueckerdt, a co-author of PIK, says: “There is strong evidence of both short-term scarcity and long-term uncertainty in terms of the availability of green hydrogen, even though electrolysis capacities are expanding at a rate that is as rapid as that of wind and solar powers are expanding at a rate that is as rapid as that of wind and solar power.” “Both prevent money from being invested in infrastructure and hydrogen end uses, which lowers the potential of green hydrogen and jeopardizes climate goals. However, even though this might make green hydrogen a risky investment from a policy standpoint, historical precedents also imply that emergency-like policy measures could encourage noticeably higher growth rates, hastening the breakthrough and raising the likelihood of future hydrogen availability. An example of this would be the mobilization of the US military during World War II; the deployment of high-speed rail in China or France’s nuclear power program; or the market-driven deployment of highly modular IT innovations with minimal coordination needs (e.g., internet hosts or smartphones).
Investing political capital while weighing the remaining risks and new information
According to the authors, understanding of hydrogen will expand quickly in the upcoming years, from cost to availability. Beyond what has been seen for energy analogs like wind and solar, promoting quick investments into green hydrogen supply chains that enable unusually high growth rates of electrolysis would expand the feasibility space. As a result, the vicious cycle of uncertain supply, insufficient demand, and inadequate infrastructure might be broken, and the system might instead function as a positive feedback system where each element supports the other. Stronger policy support that fosters shared expectations of rapid growth could help resolve both short-term scarcity and long-term uncertainty, which are two sides of the same coin, “explains co-author and University of Wisconsin-Madison professor Gregory Nemet.
According to the study, policies that jump-start a quick rollout of Gigawatt-scale electrolysers in the upcoming few years could help to unlock significant innovation and scaling effects and enable green hydrogen to meet demand in sectors inaccessible to direct electrification. It could maintain the window open for achieving a broader and more significant role for hydrogen in a climate-neutral energy system in conjunction with increasing the production of renewable electricity.
However, PIK co-author Gunnar Luderer warns that there is still a chance that policymakers will overestimate green hydrogen’s potential: “Even if things go well in the near future, there won’t be enough hydrogen available to replace fossil fuel use on a large scale. Incentives for hydrogen should be prioritized by policymakers in industries without alternatives, like heavy industry (like steel) or power supply during periods of low wind and solar electricity production. However, the development of other readily available clean options like heat pumps and electric transportation cannot be postponed because of hydrogen. We must scale up all essential zero-carbon technologies aggressively in order to effectively reduce greenhouse gas emissions and limit climate risks. “
