Survey: How Is the Global Market Preparing for Hydrogen Deployment?
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As the world transitions to cleaner energy, hydrogen is considered the next primary fuel of the twenty-first century. Hydrogen fuel cells produce energy, minimal heat, and water from natural gas reforming, electrolysis, solar-driven, and biological processes. It is a clean energy that can be transported, stored, and delivered for use in many applications.
But how many market sectors are familiar with the different types and forms of hydrogen and the impact hydrogen will have on their industry?
GLG recently conducted a survey to discover how the global market is preparing for successful hydrogen deployment.
About the Survey
Starting in September 2020, GLG sought global players in energy, manufacturing, transportation, and other general industries to discover their key insights on making hydrogen deployment work. Participants were screened carefully to find the hard-to-reach decision-makers relative to using hydrogen technology.
This resulted in responses from 44 C-suite or senior managers from six countries in various sectors. Nearly 60% had a major influence on their decision for hydrogen, and just over 40% were the final decision-makers. A quarter of the recipients came from the U.S., and the rest consisted of an even mix from Europe, including France, UK, Spain, Italy, and Germany.I
Surprising Results on Hydrogen Knowledge
While over 90% of the respondents agreed that there was going to be some impact and major issues moving to hydrogen, many were unaware of the different types of hydrogen production, or how to actually dispense and use hydrogen. In fact, over 80% understood that you can get hydrogen from electrolyzers or electrolytic processes and that it can be delivered as a stored compressed gas. However, most reported limited knowledge on how to actually dispense and use hydrogen.
Steam-methane reforming (SMR) is the most widely used method for making hydrogen today, but only about a third of respondents were familiar with this process. The area least understood was kilns/high-temperature processes.
And while respondents weren’t fully knowledgeable of how hydrogen is made, 90% did know of processes that were going to be impacted relative to transporting hydrogen via the natural gas network of the future.
“This is really important because this is happening whether people want to use hydrogen or not,” said Brendan Bilton, former Managing Director at ACAL Energy. “There are a number of projects around the world in play at the moment looking to inject hydrogen into the natural gas grid and move it to 100% hydrogen at some point in the future. For industrial processes that use natural gas, this can have a big impact on how they operate.”
Another interesting insight revealed that while using hydrogen to reduce emissions was a large priority for most of the respondents, a quarter of those surveyed who had manufacturing knowledge didn’t feel it was going to be a priority. In fact, some in the energy and heavy industries thought it was a low priority, showing that there is a need for education in these sectors.
Hydrogen Impact — Good or Bad?
When asked how hydrogen would impact their own sectors, more than 61% of the respondents indicated that it would be a big, positive impact. This was especially true for the metal-making industry because it would potentially experience huge benefits from reduced carbon emissions, hydrogen supply costs, and more ease in obtaining hydrogen going through the gas grid.
In contrast, two-thirds of people in the ceramic processing market felt it would have a negative impact. This is probably due to the fact that they will have a huge capital expenditure on upgrading their kilns and furnaces to be able to accommodate hydrogen and natural gas mixtures.
Respondents were also asked about additional impacts in being hydrogen competent. The top concerns were increased production costs, safety procedures, and personnel training, with only 23% reporting quality control problems.
While hydrogen is cheap to produce, it’s expensive to transport and store. Over a third of respondents understood that people need to have a significant amount of training to be able to operate equipment using hydrogen.
Surprisingly, 7% of respondents didn’t have any concerns, presumably because they’re already in sectors that use a lot of hydrogen.
The results indicate that the majority also see benefits from using hydrogen, such as reduced emissions costs and improved process efficiency.
Hydrogen Types, Price, and Competition
Most respondents are aware of the differences among green hydrogen (made from renewable fuels with zero carbon footprint), gray hydrogen (made from fossil fuels), and blue hydrogen (made from fossil fuels with carbon capture), and over three-quarters realize the premium price placed on the cost of green hydrogen today.
However, the majority of respondents thought that that price differential would drop to less than 20% in the next 10 years (which is the price needed to become a widely used fuel in the future).
In addition, respondents indicated they were well aware of the electolyzer suppliers and competitive landscape in the global hydrogen market. But the big finding was that the U.S. is actually a major player in the hydrogen sector.
Big industrial gas companies were prevalent in the survey, but an American company also appeared that recently signed an agreement to convert its gas turbines from natural gas to pure hydrogen. “If successful, this can be a good way to have zero-carbon-emission electricity fill in for the off periods when renewables aren’t available,” states Bilton.
The Hydrogen Transition Is Here
Overall, the survey results indicate that the key players in the global market are aware that the hydrogen transition is coming with numerous benefits to offer. But in order to have a positive impact across all sectors in all regions, an increased focus on education, safety, and reducing production costs is needed.
If you need insights from a hard-to-reach niche audience, contact GLG to learn more about its new Network Surveys. And if you’d like to access the full research results for the Hydrogen Survey, click here.