The future of hydrogen is green

The energy transition will be able to count on hydrogen produced sustainably and in ever-greater quantities, according to a new study by IRENA which also outlines the scenario concerning exports.

Hydrogen, a crucial resource for the energy transition, is set to be increasingly abundant and sustainable: in 2050 two thirds will be produced from renewable sources. The production potential could amount to twenty times the world’s energy requirements.

All this will be made possible by technological innovation and economies of scale, which in most parts of the world will see production costs plummet: from the current five dollars a kilo to less than a dollar in the best-case scenario, or just over a dollar in the most pessimistic forecasts. What’s more, a quarter of the hydrogen produced in the world will be exportable, therefore making it possible to extend supply across all continents.

These were the conclusions of the new report into hydrogen that has just been published by IRENA (the International Renewable Energy Agency), the intergovernmental organization that was created to support countries in their transition to a sustainable energy future.

The future of hydrogen is so important because of its huge potential as a clean energy carrier in sectors that are harder to electrify, such as the chemical industry, steel production, heavy transport and mining.

Hydrogen, therefore, promises to be the ideal solution to develop alongside electrification in the current energy transition. For this reason, it is now the subject of a large number of research projects around the world, while IRENA has published numerous papers on this topic, including the new report.

The document explores both hydrogen production and trade, focusing on some particular geographical areas: members of the OECD (the Organisation for Economic Cooperation and Development) and some other countries where the prospects for hydrogen appear to be particularly promising, such as Chile and Morocco.

On the production side, the report dedicates ample space to green hydrogen, i.e., hydrogen produced from water through electrolysis powered by renewables: this is in fact the only form that is genuinely sustainable.

The large-scale rollout of this technology will be possible thanks to the low prices forecast for 2050: $0.72 per kilo in the United States in the best-case scenario, $0.75 in Spain, $0.89 in Italy, $0.90 in Brazil and $0.67 in Chile. Even the most pessimistic forecasts estimate the cost to be around $1.30 per kilo, roughly a quarter of the current price.

Finally, the report offers some recommendations to help political decision-makers facilitate the development of the green hydrogen industry. These include creating a hydrogen market with appropriate regulations, establishing an international standard for the definition of green hydrogen and incentivizing the production with investments along the entire value chain. Above all, it is necessary to accelerate the development of renewables in order to ensure the allocation of a sufficient share of electricity for the production of green hydrogen.