Energy Outlook 2023: Hydrogen

Produced by using renewably generated electricity that splits water molecules into hydrogen and oxygen, green hydrogen holds significant promise to help meet global energy demand while contributing to climate action goals.

Hydrogen production market was valued at $130 billion and is estimated to grow up to 9.2% per year through 2030. Although over 95% of current hydrogen production is fossil-fuel based, green hydrogen is the corner stone of the energy transition and it’s use cases are expanding across multiple sectors.

The following trends might shape the hydrogen economy development path in the coming year:

Offshore hydrogen production

The European Commission’s expects renewable energy projects to become increasingly important in most sea basins in Europe, including innovative projects such as on site offshore hydrogen production. Hydrogen may be produced offshore by achieving an association between wind turbines and electrolysers by various approaches. These could include retrofitting an electrolyser to an existing oil & gas platform, building a renewable hydrogen production hub on a man-made island (see energy islands below), building a new platform close to an offshore wind farm, or integrating the electrolyser and wind turbine into one offshore assembly. Moreover, offshore produced hydrogen may be exported via existing repurposed or new pipelines or by dedicated ships; and a platform may be used for grid balancing and for refuelling ships offshore. The ambition is set, and offshore hydrogen is expected to support mainstream production at scale.

Energy islands and integrated local solutions

The Energy Islands and hydrogen valleys projects signal a new, integrated approach to generating renewable energy and hydrogen. Such projects can be high scale and local scale.

The artificial North Sea and Baltic Sea Islands have the potential to supply electricity to several countries alongside Denmark, including the Netherlands, the UK, and Belgium. Smaller locally focussed Hydrogen valleys will provide a local integrated approach to not for export but for a local consumption approach.

Hydrogen in Transport Vehicles – trains

The next transport trend will evolve around hydrogen cars and trains whereas Hydrogen fuelled airplanes might see their deployment on a longer horizon.

There are still significant challenges such as high cost, low range, difficulty in meeting commercial use cases or slow rollouts of charging infrastructure.

There is now a growing interest in hydrogen vehicles, with manufacturers starting to invest. Manufacturers will benefit in the longer term, as they will have more diverse vehicle portfolios, but users will benefit too from having a greater choice of vehicle type. Finally, commercial fleets will be able to be decarbonised more easily.