Page 22 - Impiantitica industriale

NEW RESOURCES

iron process in steel production), short-term oppor- potential for hydrogen to play a meaningful role in
tunities may be found in other industrial or power the energy transition, companies should get star-
applications. ted now to define how they will participate and
However, given the uncertainties in the uptake of take advantage of this massive opportunity. Here
technologies and relative competitiveness of hydro- are five ways to get started.
gen, adoption could be much slower, which would
result in something closer to our focused uptake Think future-back to understand hydrogen’s
scenario with an estimate of 185 Mtons by 2050. potential. For every participant in the market,
Both blue and green hydrogen (that is, hydrogen the first step is understanding which applications
from low-carbon and zero-carbon sources) make across sectors have the greatest potential to adopt
up less than 1% of total hydrogen production today. hydrogen, and recognizing the underlying drivers.
Significant advances in technology and experience This involves looking not only at costs, but also at
will have to occur to make these competitive, along competitive alternatives, sources of supply, ena-
with more renewable energy, infrastructure for the bling technologies and regulatory policy, both inter-
transport and storage of hydrogen, and a large national, federal, and local.
installed base of industrial applications to nurture Across applications, demand will be driven in two
growth. Public investments will be required to crea- ways:
te the right initial opportunities and catalyze market • In some cases, hydrogen could be the single
growth until hydrogen, blue or green, can be com- best solution to reduce emissions, where cu-
petitive at scale on their own. stomers are willing to pay for it—for example,
blast furnace-based steelmaking or cement
Five imperatives to win production. Adoption is predictable, but de-
pends on the business case, ease of transitio-
Figure 3 - Hydrogen could in the hydrogen value chain ning, and asset replacement schedules.
be cost competitive with • In other cases, hydrogen will need to be cost
some low-carbon substitutes All this may look very far away, and many compa- competitive against other low- or zero-carbon
by 2030 nies have pressing priorities in 2021. Still, given the solutions. Here, adoption speed will depend
on factors like the availability of low-cost re-
newable energy to make green hydrogen and
the availability of alternative supply chain infra-
structure for hydrogen (see Figure 3).

Long-term competitiveness needs to be ba-
sed on market forces, but in the near term po-
licymakers can help shape the development
of the hydrogen economy by encouraging in-
vestment or direct funding that may allow hydro-
gen to move quicker along the experience curve.
The development of renewable power generation
offers an analogy. Direct subsidies from federal go-
vernments (for example, wind and solar tax credits
in the US) helped accelerate adoption of renewa-
ble technologies down a steep learning curve such
that they are competitive today, without subsidies,
with fossil generation in many markets around the
world. The creation and maturation of the hydro-
gen market will require similar support, and we are
already seeing budding examples in the European
Union and specific European countries, including
the UK, the Netherlands, Denmark, Germany and
Poland.

Choose your focus and participation model.
As the hydrogen market’s value chain develops,
so too will supply, production, and logistics choke-
points that influence the pace of adoption. To gain
a sustainable competitive advantage, companies
need to understand these chokepoints and how
they influence the relative attractiveness of partici-
pation models.
Effective participation models start with strong po-
sitions that capitalize on existing capabilities and
expertise, while setting a trajectory toward future

18 Impiantistica Italiana - Marzo-Aprile 2021