Hydrogen Energy: Where to Next?

Loren Henry


February 26, 2021

According to the International Energy Agency (IEA), the demand for hydrogen has nearly tripled since 1975 — and for good reason. When used to replace fossil fuels, hydrogen can be an effective tool for helping to slow global warming. In addition, hydrogen’s versatility and potential to help boost the availability and output from other renewables, such as solar photovoltaic and wind, make it increasingly valuable.

Challenges Ahead
Despite its widespread use, hydrogen energy continues to face ongoing challenges. For example, the extraction process for hydrogen can be costly. According to the website Conserve Energy Future, there remains a lot of research to be conducted and development to be done to make the harnessing of hydrogen energy more affordable. There are also issues regarding transportation and storage requirements. To ensure its effectiveness, hydrogen must be moved and stored under high pressure, making it difficult to transport the energy source in large quantities. In addition, only green hydrogen is completely carbon neutral – any other form, like blue hydrogen, still emits CO2 as a by-product.

Another key challenge lies in the production of hydrogen fuel, as it still relies heavily on fossil fuels. In fact, 95% of the hydrogen produced in the U.S. today is made from fossil fuels. So, while hydrogen is a highly sought-after renewable energy source that has a minimal impact on our environment, the process of separating it from oxygen mostly requires the use of nonrenewable sources such as natural gas, coal and oil. Encouraging a more widespread use of hydrogen energy will require less dependency on fossil fuels. Currently, steps are being taken to minimize the over-reliance on fossil fuels when processing hydrogen in an effort for it to be adopted in new sectors.

Opportunities for Widespread Hydrogen Use
Recognizing hydrogen as a powerful clean energy source, the number of countries advocating for hydrogen technologies has increased, as has the number of sectors they support. According to the IEA, the list of targets, mandates and policy incentives to directly support hydrogen use have also grown, along with a rise in spending on hydrogen energy research and development.

The IEA has identified four opportunities to help springboard hydrogen for more widespread use. The agency notes that while each option may serve a single purpose, all four have the potential to mutually reinforce one another.

  1. Making industrial ports hydrogen energy hubs. Because much of the refining and chemical production that uses hydrogen based on fossil fuels is already concentrated in coastal industrial zones, encouraging these ports to shift to cleaner hydrogen production would help lower costs, as well as fuel ships and trucks serving ports and providing power to nearby industrial facilities.
  2. Building on existing infrastructure that includes natural gas pipelines. Replacing just 5% of countries’ natural gas supplies could increase the demand for hydrogen energy and help reduce costs.
  3. Expanding hydrogen energy transport by way of fleets, freight and corridors. Powering high-mileage vehicles to transport passengers and goods along popular routes can make fuel-cell vehicles more competitive.
  4. Creating international shipping routes. Paving the way for international hydrogen trade shipping routes can help accelerate hydro energy’s impact on the global energy system.

Wherever hydrogen can replace fossil fuels, our planet benefits. And while there may be challenges for the widespread adoption of hydrogen energy, efforts are being made to find solutions as the interest of sectors of the market continue to grow.

At Worldwide Facilities, we’re helping Renewable Energy businesses nationwide meet the specialized insurance challenges of the rapidly growing Renewable Energy sector — including hydroelectric energy. To learn about our unique insurance solutions for this growing industry, contact Loren Henry at lhenry@wwfi.com or 619-541-4265.

Additional source: Bloomberg.com.

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