The Role of Hydrogen in the Global Energy Transition

The global push towards a clean energy future is gaining momentum, with hydrogen emerging as a key player in this transformation. As the world grapples with the urgent need to decarbonize and shift away from fossil fuels, hydrogen offers a versatile and sustainable energy solution that could cover approximately 15% of global energy demand by 2050. But what makes hydrogen so promising, and what challenges lie ahead for this burgeoning industry?

The Hydrogen Economy: A New Frontier
Hydrogen, particularly when produced from renewable sources (known as green hydrogen), is seen as a critical component of the energy mix needed to achieve net-zero emissions. Unlike fossil fuels, hydrogen produces no carbon emissions when used, making it an ideal fuel for a wide range of applications, from industrial processes to transportation.

The potential of hydrogen extends beyond just energy production. It can be used to create derivative products like green ammonia and e-fuels, which are crucial for sectors that are difficult to decarbonize, such as aviation and heavy industry. Additionally, hydrogen can be stored and transported, making it a flexible energy carrier that can support grid stability and energy security.

Key Drivers of the Hydrogen Revolution
Several factors are driving the rapid growth of the hydrogen economy:
1. Government Support and Policy: Seventy percent of global GDP is now backed by national hydrogen strategies, with billions of dollars in public funding allocated to hydrogen projects. This governmental support is crucial for creating the infrastructure and market conditions necessary for hydrogen to thrive.

2. Decreasing Costs: The cost of renewable energy, which is essential for producing green hydrogen, has decreased by 80% since 2010. Furthermore, the cost of electrolyzers, the technology used to produce hydrogen from water, is rapidly declining, making hydrogen more economically viable.

3. Growing Demand for Green Products: As more companies and consumers seek to reduce their carbon footprints, the demand for products and processes that use hydrogen is increasing. This includes everything from green steel to e-fuels, creating new revenue streams for companies investing in hydrogen.

4. Technological Advancements: Innovations in hydrogen production, storage, and distribution are occurring at a rapid pace, making it easier and more cost-effective to integrate hydrogen into the energy mix.

Challenges on the Path to a Hydrogen-Powered Future
While the outlook for hydrogen is positive, several challenges must be addressed to fully realize its potential:

1. Uncertainty: Investor’s risk is high as commercial offtake agreements must be put in place prior to full funding based on limited and uncertain information. Hydrogen production assets must interface with various systems, such as water and electricity and apply still maturing and rapidly evolving electrolysis technology. The variability and dynamics of these systems need to be well understood to optimize investments and ensure the reliable operation of hydrogen production facilities.

2. Complexity: Hydrogen projects often involve multiple stakeholders, including government bodies, private companies, and local communities. Effective communication and collaboration are essential to managing these increasingly complex eco-systems,

3. Performance: Green Hydrogen requires a lot of new assets and infrastructure to be put in place. Project control and performance will be essential. Sub-optimized use of resources and difficulties to gauge ‘real-time’ unfiltered project performance are still prevailing, requiring a different approach to change the results,

4. Efficiency: As the hydrogen economy grows, managing the supply chain—from raw material procurement to the distribution of hydrogen—will become increasingly complex. Companies will need to optimize their operations to ensure the efficient and sustainable production of hydrogen.

What is the future of hydrogen?
The hydrogen economy represents both a significant opportunity and a complex challenge. The companies that succeed in this space will be those that can effectively manage technological risks, foster collaboration, and optimize their operations. With the right strategies and investments, hydrogen has the potential to play a transformative role in the global energy transition, helping to create a sustainable and carbon-free future.

Infrastructure, Energy & Materials Industry Business Value Consultant Expert, Dassault Systèmes

Stefan Ceulemans joined Dassault Systèmes to lead the infrastructure, energy and materials industry solutions and technical teams before moving to his current role as an industry business value expert focusing on clean energy transformation. His industry experience is rooted in oil and gas through a wide variety of engineering and operational leadership roles. Sustainability has been a continuous point of focus and interest in his career, with successful leadership in energy efficiency programs. Over the last decade, Stefan Ceulemans has been an industry consultant, manager and director on the forefront of business development and customer engagement activities. He focuses on helping owner-operators leverage technology to improve project execution and controls, asset information management and other tactical and strategic initiatives, such as transitioning to a clean and sustainable energy economy.