Hydrogen and artificial intelligence (AI) were the hot topics at the Baker Hughes Annual Meeting 2021. While hydrogen makes up only a small part of Baker Hughes’ annual revenues, the company predicts there will be a mass market for it in ten years. However, regulatory and market incentives have to be put in place quickly to drive adoption.

One of the key messages from the meeting was Baker Hughes’ three-pillar strategy for the future: driving efficiencies that decarbonise energy systems; building clean value chains; and recognising there are technologies in the pipeline that, while they may not be viable for decades, the company needs to position itself for now.

“We have been in the hydrogen business since 1962—where the narrative is changing today is around green hydrogen,” said Uwem Ukpong, executive vice president for regions, alliances and enterprise.

“If we do not start having that [hydrogen] conversation now… we are not going to be ready when the market picks up” Ukpong, Baker Hughes

“As with every nascent technology, the cost point is going to be high and then you have to walk through the technology over the ensuing years to get it to the point where it is profitable. If we do not start having that conversation now and creating alliances with relevant partners, then we are not going to be ready when the market picks up.”

Michele Fiorentino, executive vice president of strategy and business development at Baker Hughes, pointed out that, for green hydrogen technology to take off, there needs to be a level playing field in terms of regulation and incentives to encourage growth.

“We have to ask ourselves what is needed, not just for hydrogen, but for other technologies that will underpin a decarbonised world,” he said. “What needs to happen is for a system to develop, and for that we need a concerted effort for a level playing field that allows accurate pricing of the cost of pollution.”

While Fiorentino claims markets are the best arbitrators when it comes down to choosing technology, solutions and capital allocation, the trick is to create the right market incentives.

“When markets go wrong it is typically because the regulation has created a skew in the risk/reward benefit that drives specific outcomes. Without the establishment of some form of carbon pricing, it will be difficult to see any of these technologies taking hold.”

Fiorentino stressed that timing is crucial—if the incentives are put in place quickly, hydrogen could become a mass market in ten years.

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Author: Che Golden