As the world begins to emerge from the initial impacts of COVID 19, the hydrogen industry is being presented with an unexpected opportunity. Economic stimulus, as the global community promote a green recovery, is providing the chance to accelerate hydrogen’s role in global decarbonization.
Supporting this opportunity, global energy demand, led by the world’s developing economies, is expected to grow at just under 1% per year to 2040. In order to align this with the need to lower carbon and further greenhouse gas emissions, we need to enact change today. Hydrogen will play a role across multiple sectors including industry and heating but has a big role to play in heavy-duty transport.
BloombergNEF estimates that hydrogen could meet 24% of the world’s energy needs by 2050, with annual sales of $200 billion to $700 billion. – at the top end almost half the size of today’s oil market. To get there though Hydrogen needs to overcome a number of obstacles and realize it’s strengths.
First of all, there is still a public concern about safety. Until people are convinced of the safety of Hydrogen as a fuel, it will be more difficult to grow the industry. Luckily this is a case of perception lagging behind the reality that hydrogen vehicles are as safe as internal combustion engines. Nevertheless, it is down to us and others in the industry to show the public that hydrogen is here and it is safe.
Collaboration will be key for hydrogen to move from being a nascent fuel to an established option for individuals and fleets. To that point, there is a growing network of refueling stations in Europe and North America, predominantly driven by coalitions aiming to drive supply and demand at a roughly similar pace. The H2 Mobility partnership in Germany, which will pass 90 Hydrogen stations this year, is a good example of what can be achieved through collaboration. In order to progress infrastructure at the required rate, vehicle manufacturers, energy companies and government need to continue to work together.
Doing this will help the industry to scale up. Shell has published research on the future of hydrogen in transport that found that in 2050, 113 million fuel cell electric vehicles (FCEVs) could save up to 68 million tons of fuel and almost 200 million tons of carbon emissions. This may seem a long way off but growth can be rapid once society reaches a point of mass adoption.
To get there we must lower the cost of a hydrogen vehicle. The California Energy Commission recently released a report stating that hydrogen can reach price parity with gasoline vehicles by the middle of this decade. Once this is achieved, the decision to switch from gasoline to a fuel that only emits pure water is much easier to make.
In the meantime, it will be important for governments to provide subsidies to drive uptake of hydrogen vehicles and provide confidence to those delivering the necessary infrastructure, that there will be customers to serve.
Today these customers are likely to own heavy duty road vehicles and in the longer-term hydrogen will begin to fuel an increasing number of ships and planes. While battery-electric vehicles, that deliver greater energy efficiency, may dominate the passenger vehicle market, hydrogen has a distinct advantage for freight – it is the world’s lightest element. Contrast this fact with the increasingly sizable batteries required to power larger vehicles and it becomes clear that hydrogen is a more suitable fuel for many larger vehicles.
2019 was a big year for the industry; more than one gigawatt of hydrogen fuel capacity was added globally, the first time this has happened. Now the industry must build on this start and the increased attention on hydrogen as a fuel.
It has been brilliant, in recent weeks, to see major financial support from governments around the world and an increase in private investment, but most importantly concrete orders for hydrogen vehicles. Countries such as Germany and China adopting national hydrogen strategies is hugely promising for hydrogen as a fuel. However, seeing orders for hydrogen buses across Europe and Asia and funding from the Australian government is, for me, a bigger positive.
The emergence of new markets shows me that hydrogen is growing. A consortium that aims to build the largest European green hydrogen project capable of producing 800,000 tons of green hydrogen in the Netherlands by 2040 is evidence of this, along with significant hydrogen projects in the UK and Canada.
I have spent 8 years working in this space and it seems that the industry has real momentum. The past couple of months have reinforced my belief in hydrogen as a fuel and I am confident that in another 5 years, we will see significant investment and build out of the hydrogen fuel supply chain.
By Oliver Bishop
Oliver Bishop is the General Manager for Shell’s global activities in hydrogen. His team runs Shell’s hydrogen stations in Germany, the UK and North America, and he is also responsible for product development as well as research and development.
He is responsible for Shell’s participation in the H2 Mobility Germany Hydrogen station joint venture which was launched in 2015 and is now rolling out stations across Germany; the 100th station should open by the end of 2020. Besides Germany, Mr Bishop has overseen Hydrogen station openings in the US, the UK and Canada. Besides his hydrogen activities, Mr Bishop is a Director of several Royal Dutch Shell companies.
During his 21-year career at Shell, Mr Bishop was General Manager for Shell’s trading business in Switzerland, held a post as M&A Manager in Shell’s Mergers & Acquisitions team, and has had previous roles in Fuels Retailing, Finance, Strategy and Consulting.
He holds a degree in electronics engineering and is based in Switzerland with his wife and two children. He holds dual Swiss and British citizenship.