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Green hydrogen is a green energy vector that can only be produced from the electrolysis of water to extract its energy. It is therefore considered a renewable energy. Its use has become, according to UBS experts, essential for states wishing to drastically reduce their carbon footprint.
Although its use remains limited for the moment because it is still not profitable due to the high production and installation costs, future technological progress allows us to foresee the possibility of seeing this energy develop its full potential with the appearance of so-called « blue » hydrogen from natural gas.
The Winners:
Nowadays, we are witnessing an increasing awareness that an energy transition is necessary but above all that it can even be interesting for economic actors. The use of existing infrastructures to use natural gas is one of the explanations. We can see a growth in the number of companies that are betting on strategies based on hydrogen.
Experts believe that the best positioned to take advantage of this hydrogen trend are renewable energy producers, wind and solar. Integrated power producers as well as shipyards and equipment manufacturers are also well positioned in this race.
Among these winners, several projects should be launched soon. This is the case with Air Liquide, which is planning to build a renewable hydrogen electrolysis production unit in Germany, which should be operational in 2023 and which has received public funding, further demonstrating its desire to focus on this energy.
The “France Hydrogène” study also reveals several projects with 2 scenarios emerging. The first one would be a deployment of 680k Tons of hydrogen by 2030 divided between the industrial sector (70%), mobility (23%) and energy (7%). Moreover, this objective could be increased by 50% in case of favorable progress and the second scenario would support more mobility (30%) and energy (12%) although the industrial sector (58%) would still be privileged.
These ambitions could generate an annual market of 2.5 to 4 billion euros in hydrogen sales and deployments would take place in 7 major French basins (North, South-West, Rhone-Alps, Great West, Moselle, Mediterranean and the Seine Valley) representing 85% of total demand. The remaining 15% will be covered by other projects mainly focused on the deployment of hydrogen vehicles. The deployment of the national hydrogen supply chain presents a financing need of 7 to 12 billion euros that can be supported by the State or by regulatory incentives because the price of carbon and its commercialization for an estimated 4 to 5 billion euros will not cover all the costs associated with it estimated at 11 to 17 billion euros.
While some industries may rejoice in the hype surrounding hydrogen, there will also be losers and it is the steel industry that seems most exposed to potential carbon taxes.
Why?
This global trend can be explained by factors other than the simple use of existing infrastructures, which would make it possible to avoid building them. It is mainly due to the forecast of a significant drop in production costs in this sector of 75% between 2020 and 2030, supported by a second drop of 50% between 2030 and 2050. Transportation costs will also be an explanatory factor for an increase in the use of hydrogen as they are expected to decrease by 30% by 2030.
The combined decrease of these two costs could make this market much more competitive and attractive than it was before and will inevitably interest new players who will bet on it, contributing even more to its development.
Really Winners?
Nevertheless, despite these hopes, there are still uncertainties. This is notably the case for the airline sector where long-distance flights could not be ensured by hydrogen for the moment. The objective remains to democratize the use of hydrogen because the alternatives seem far away in this sector. For so-called « heavy » vehicles such as trucks or buses, hydrogen has a real role to play and could impose itself thanks to the autonomy it can provide, which is without equivalent.
Limits as well as substitutes are also being developed in parallel, such as direct electrification, which has demonstrated its potential in the automotive and rail sectors with a more efficient, less expensive and therefore economically profitable solution, and even greener because it does not emit greenhouse gases.
Thus, despite the hopes glimpsed, hydrogen still raises a certain number of questions, mainly focused on its profitability but also on the necessity of its use in the face of emerging alternatives.
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