Posted on 15 Mar 2022
Demand for low-carbon hydrogen could grow at least four-fold - and up to seven-fold - by 2050 as the global energy system shifts away from fossil fuels, bp forecast on Monday.
According to its annual Energy Outlook 2022 report, there will be modest growth in hydrogen demand over the next 10 years because low-carbon hydrogen is used mostly as feedstock and new projects have a long lead time to come online. The pace of growth, however, should sharply accelerate in the 2030s and 2040s. That’s because falling production costs and stricter carbon emission policies will make low-carbon hydrogen competitive with “incumbent fuels,” it adds.
The annual forecast led by chief economist Spencer Dale offers two energy transition scenarios – Accelerated and Net Zero. By 2030, demand is set to reach 90-100 million tonnes/year. By 2050, low-carbon hydrogen demand is expected at 280m t/y under the Accelerated scenario, and at 450m t/y under the Net Zero scenario. Supply is set to grow in line with demand, with bp not indicating signs of unbalance, Kallanish notes.
The future for low-carbon hydrogen will be dominated by green and blue hydrogen, with a small amount coming from so-called BECCS hydrogen. This is produced from bioenergy with carbon capture and storage technology.
In terms of costs, bp says the cost of producing blue hydrogen is lower than green in most parts of the world now, this is already changing.
“This cost advantage is gradually eroded over the outlook as improvements in technology and manufacturing efficiency reduce the price of both wind and solar power and electrolysers,” the report states.
On the other hand, costs of blue hydrogen will remain flat given the limited scope for gains in technology and efficiency.
In 2030, green hydrogen will account for 55% of total low-carbon hydrogen production, before rising to 65% by 2050. Yet, hydrogen will be mostly used to decarbonise heavy industry and long-distance transportation.
Source:Kallanish
