Investing in clean hydrogen – a global, diversified energy source
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Investing in clean hydrogen – a global, diversified energy source
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19 February 2024
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Infrastructure
Reading time: 3 minutes
Amir Sharifi
Energy Transition Lead & Infrastructure, Senior Managing Director at Ardian and CIO at Hy24
For Amir Sharifi, Ardian’s Energy Transition Lead and Infrastructure Senior Managing Director, and Hy24’s Chief Investment Officer, hydrogen’s long-term future will have to be a global one.
Government regulatory and financial support, coupled with green hydrogen’s flexibility to dovetail with other renewable output, has put clean hydrogen on a strong growth trajectory.
But what will a clean hydrogen-powered world look like in the future? Where will clean hydrogen be produced? How much will it cost, and can it address current concerns around energy security?
For Amir Sharifi, Ardian’s Energy Transition Lead and Infrastructure Senior Managing Director and CIO at Hy24, hydrogen’s long-term future will have to be a global one.
It will be essential to source clean hydrogen from the cheapest sources of production, which will necessitate the development of a global supply chain.
A hydrogen economy supply will be significantly more diversified than it is in the current hydrocarbon model today.
Maximizing renewable energy in hydrogen production
Hydrogen is produced with electrolysers, machines that use electricity to separate hydrogen molecules from water. Powering these machines using hydrocarbons is counter-intuitive if one of the main reasons for upscaling hydrogen production is carbon emissions reduction.
Clean hydrogen production, however, can be powered by output from wind solar projects, and by locating hydrogen production close to these sites, renewables offtake can produce clean hydrogen that can be stored and transported from the solar or wind farm to where it is needed.
This solution addresses the grid connection and electricity storage challenges facing renewable energy supply as well as ensuring that production costs are lower. Delivering this will require an international approach.
“The cheapest hydrogen with the lowest environmental impact will be produced in hot, dry desert areas like Namibia, western Australia, the Middle East, and Chile. These are the ideal places to build large scale renewable plants that can green hydrogen production,” Sharifi says.
You can’t decide to produce locally and multiply the cost of production by two. If you want to serve people with energy at the cheapest cost, you need to globalize it.
At a time when energy sovereignty and domestic energy production is a big priority, international hydrogen networks may seem far from ideal, but Sharifi points out that, in a hydrogen economy, supply will be significantly more diversified than in the current hydrocarbon model.
There are about seven or eight countries that account for almost four fifths of oil and gas supply. With clean hydrogen it will be at least 20-25 countries that emerge as major players. In that scenario energy dependency reduces massively.
By taking a global perspective on hydrogen production, governments and investors can tackle the pressing risks of climate change.
Green hydrogen: a compelling investment case
The road to mass production and consumption of green hydrogen will be a long one, but by taking a global perspective on production capacity governments and investors can tackle the pressing risks of climate change at the same time as unlocking new opportunities to grow the world’s economies and create value for stakeholders.
Discover our latest conference dedicated to Data Intelligence for Clean Energy here
We suggest you to read or re-read the first two article of this series of three articles exploring investment in clean hydrogen:
Investing in clean hydrogen – why solar and wind cannot do it alone
Investing in clean hydrogen – the capital outlay required
