In May 2021, we brought together three experts in energy, decarbonisation, and hydrogen. In their keynotes and through a vivid panel discussion, Fortum’s EVP Per Langer, technology director from Elcogen, Matti Noponen and Antti Arasto, VP, Industrial energy and hydrogen, VTT, set the record straight on four often misunderstood facts around the societal and business potential of the ongoing hydrogen revolution.
1. Energy is scarce
False! Energy itself is not scarce. The earth receives the amount of energy we consume annually in less than two hours, and solar energy is already the cheapest electricity in many places. Prices of solar and wind energy are forecast to decline further across the globe in the coming decades.
When we work to develop a better energy system, we should not over-emphasize any single tool or look for a silver bullet but keep our eyes on the big picture. Energy efficiency is not just about using as little as possible, but a question of shifting our focus on how and when we use energy to reach the best possible impact. If we want to create competitiveness and pave the way for an effective transition into a sustainable energy system, we need to develop and combine different tools like material efficiency and capacity optimisation, sector coupling, improving market drivers and updating the legal framework.
Hydrogen will be one important tool in our quickly expanding toolbox. As we increase our use of renewable energy, we will also need energy storage. This is one of the domains that creates massive opportunities for green hydrogen. The combination of relatively cheap renewable energy and the declining cost and improving efficiency of electrolysers will make green hydrogen a highly competitive option.
2. Hydrogen can become an alternative to fossil fuels
False! Hydrogen is here, not just to be an alternative to oil, but to replace it. The targets we see today are just the beginning of a much larger transformation. By taking the right steps that are both ambitious and concrete, we can create significant change on the global scale.
As new technologies continue to develop, we can replace fossil fuels with hydrogen in existing installations, such as heavy industries or refineries. And what is potentially even more exciting, we can also create entirely green hydrogen-based systems that do not emit CO2.
A scenario developed by the European Union suggests that the market potential for hydrogen can surpass 800 billion euros in less than three decades and provide approximately a quarter of Europe’s final energy demand. We can expect a lot already from the coming decades, but in an even longer perspective, hydrogen is in the business of replacing oil.
3. We should wait until the technology is more mature
False! The time to act is now. Some large companies may have the luxury of waiting as they watch the industry develop, and then buying out someone else’s hydrogen business at a more mature state. However, for most, being the first mover will secure the benefits of the transition.
Throughout history, we have seen examples of new technologies and transitions that have disrupted entire industries and societies. Whether it was steam, electricity, electronics, or the internet, the early adopters benefited.
Being a pioneer requires courage and ambition, but early movers also secure most of the rewards. New projects, investments and ecosystems are springing up around the globe, but there is still room for more players to get in the mix and a lot of ground to cover. If you want to be among the first to grab the business, the time to move is now.
4. Hydrogen has potential for some industries, but not ours
False! The odds are that there is a niche for your company in the future hydrogen economy. The European Union has committed to reach carbon neutrality by 2050, and similar goals are in place around the world. Renewable energy is expected to decarbonise a large share of the EU energy consumption, but the increasing use of solar and wind creates a demand for energy storage solutions, and this is one of the applications where hydrogen holds a lot of promise.
Hydrogen, however; is not for hydrogen business only. The growth of the hydrogen market will create opportunities across the value chain from the production of green fertilisers and green steel to manufacturing new hardware, planning and building new infrastructure, preparing new regulations, transforming transportation, and changing the energy systems of industrial plants. There will also be opportunities for continued research, specialised engineering, project management and delivery, consulting, and more. These developments will directly or indirectly affect and create opportunities for most industries, so figuring out your niche could pay off.
If your company’s interest in hydrogen has not yet turned into a roadmap, there is no reason to be left behind. At VTT, we help companies explore the possibilities of hydrogen technology in their operations. We manage a fully automated research infrastructure and combine excellent hardware technology and experimental knowhow about FC&H2 domain to create economically viable and environmentally sustainable solutions.