Green hydrogen will decentralise global energy supply, potentially reducing the need for international trade and diluting the influence of the established energy superpowers, according to speakers at the FT Hydrogen Summit.

The ability to produce green hydrogen in multiple countries using low-cost wind and solar power will remove the need to trade large volumes between regions, as with oil and gas.

“The intensity of international energy trade will be less,” said Adair Turner, chair of thinktank the Energy Transitions Commission.

“But [renewable power] cost differences between regions mean there will be an arbitrage.”

“The advantage of green hydrogen is that you do not need energy superpowers” Papathanasio, World Bank

Turner points to the falling cost of solar power to 2¢/kWh and even lower in some regions, and the “collapsing” cost of electrolysers as drivers of low-cost green hydrogen production that can be coupled with local demand.

Decentralised green hydrogen production could break up the value chain in industries such as steel, Turner says.

For example, hydrogen-fuelled production of sponge iron could be relocated to be close to where iron ore fines are mined and where cheap renewable power is available, rather than shipping fines over long distances to be processed at steel production centres such as China.

Intra-continental

Only about a third of hydrogen will be traded between regions in future, and that trade will be split 50/50 between pipelines and ammonia shipments, Elizabeth Press, the International Renewable Energy Agency’s director of planning and programme support, told the summit.

Piping hydrogen from North Africa to Europe may be one example of interregional trade that does become established over the long-term, but green hydrogen is likely to remain more locally traded, according to Martin Lambert, head of hydrogen research at the Oxford Institute for Energy Studies.

“I struggle to see how hydrogen will can become a globally traded commodity,” he says.

Production of green hydrogen using renewable resources can fundamentally change the energy system, according to Demetrios Papathanasiou, global director of the energy and extractives global practice at the World Bank.

“The advantage of green hydrogen is that you do not need energy superpowers,” he says.

Papathanasiou says he is optimistic that hydrogen use can grow to about a fifth of global final energy consumption by 2050. Turner estimates hydrogen’s share will be close to 15pc, with Press forecasting 12pc. Lambert is less bullish and says hydrogen will struggle to get to 10pc by 2050.

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Author: Stuart Penson