Hydrogen production market to reach $1 trillion, says Goldman Sachs
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H2 is expected to play an important role in the world’s efforts to decarbonize several sectors.
Hydrogen production is expected to be an important part of global decarbonization and could develop into a market with a value greater than an annual $1 trillion, said Goldman Sachs.
This use of H2 will greatly include its generation using renewable energy such as solar and wind.
“If we want to go to net-zero we can’t do it just through renewable power,” said Goldman Sachs commodity equity business unit leader for the EMEA region Michele DellaVigna in a recent CNBC interview. “We need something that takes today’s role of natural gas, especially to manage seasonality and intermittency, and that is hydrogen.”
This carbon emission-free fuel has a spectrum of applications and can be used in a broad variety of different industries.
“It’s a very powerful molecule,” said DellaVigna. “We can use it for heavy transport, we can use it for heating, and we can use it for heavy industry.” He went on to argue that the most important factor is to “produce it without CO2 emissions. And that’s why we talk about green, we talk about blue hydrogen.”
There are many different ways for hydrogen production to take place, but renewably powered will be vital.
The International Energy Agency referred to H2 as a “versatile energy carrier.” While it can be generated in many ways, one of the cleanest uses electrolysis powered by wind, solar and other forms of renewable electricity. This splits water molecules into their oxygen and “green” H2.
More popular in many countries is blue H2, which is produced using methods powered by natural gas. As it uses a fossil fuel, it does produce CO2 emissions. Were they left to enter the atmosphere, it would be brown H2. However, to make it blue, most of the CO2 emissions are captured and stored.
“Whether we do it with electrolysis or we do it with carbon capture, we need to generate hydrogen in a clean way,” said DellaVigna when discussing the value of specific hydrogen production methods. “And once we have it, I think we have a solution that could become, one day, at least 15% of the global energy markets which means it will be … over a trillion dollar market per annum.”