Why such demand for one product?

Clean hydrogen has the potential to decarbonise chemical, cement, iron and steel production and provide combined heat and power from a single source. Hydrogen will enable surplus energy from other sources to be stored and circulated across sectors and regions, creating a circular economy of renewable energy where wasted energy is continually recycled into power.

This is why hydrogen is critical to the EU strategy of energy system integration, as it can produce heat and power from multiple sources. It’s also a prime electrofuel, a renewably-sourced drop-in replacement fuel to rapidly decarbonise sectors such as shipping and aviation. And crucially, hydrogen can provide renewable fuel for sectors from freight transport and shipping, which are unsuitable for direct electrification.

Recent international climate agreements have accelerated the demand for clean hydrogen. Yet there is a growing gap between supply and demand, with the world needing 500 million tonnes of green and blue hydrogen by 2050. In a microcosm of the global shortage, current hydrogen capacity would need to be scaled up by a factor of 100 to power the commercial truck fleet in a country like Germany alone. This is driving increasing industry demand for a more competitive levelised cost of hydrogen to encourage the necessary investment in extra capacity.

So how can we reduce the cost of hydrogen to make it more competitive?

Cross-sector energy convergence

Ramping up clean hydrogen production will require a mix of energy sources underpinned by cross-sector collaboration and integration. This is because clean hydrogen will require a blend of power sources, such as solar and offshore wind, and a parallel convergence of previously separate sectors and specialisms from electrolysers and petroleum to offshore wind and gas. A fragmented, siloed hydrogen value chain could act as a significant drag on development speed at a crucial time when we need to scale up production.

Hydrogen-based energy convergence is already taking shape in combined heat and power plants, offshore wind-to-hydrogen projects and hydrogen-fuelled household heating and transport. We similarly see cross-sector consortiums of chemicals, heating, electricity and green energy producers making e-methanol and pioneering partnerships between fossil fuel and renewable energy firms to produce green hydrogen. Firms spanning industries as diverse as renewables, water, power and fertiliser have formed a Green Hydrogen Catapult to reduce development costs through combined economies of scale. The European Commission’s Hydrogen Strategy similarly outlined plans to integrate the EU’s entire energy system across sectors and regions.

Breaking down sector silos

Yet this involves the challenge of breaking down national and sector silos and uniting industries that have never worked together, as identified in From Ambition to Reality, our ground-breaking paper written in collaboration with Princeton University, USA. The widely varying standards, cultures, tools and technologies across relevant industries from electrolyser to petrochemicals could create disjointed development. For example, we could see conflicting business models, design approaches and engineering methods across industrial clusters or partnerships. This means incompatible tools and technologies could hamper cross-sector collaboration and data-sharing. Similarly, we could see a culture clash between project partners with contrasting corporate cultures such as chemicals or wind.

Hydrogen standards

There is a growing demand for global standards to make sure there are consistencies with technologies, processes, safety and sustainability across the hydrogen value chain. Cross-sector energy system integration requires cross-sector oversight and harmonised standards or regulations.  If EU hydrogen legislation was streamlined and aligned under the umbrella of the Hydrogen Act, this would make sure there’s consistent safe and sustainable production across sectors and countries. This would provide a benchmark for best practice across all industries involved in clean hydrogen and help harmonise diverse efforts around common objectives.

Connecting a diverse ecosystem

Integration also requires project management specialists spanning every relevant sector to act as an ecosystem hub connecting all hydrogen tools, technologies, sectors and suppliers. Neutral conveners would help make sure there’s the seamless integration of diverse project partners, policies, people and processes. This would enable the industry to avail of ‘optioneering’, drawing on the full array of tools to find the optimal mix of best-in-class solutions for everything from cost to carbon efficiency.

For example, we provide asset integration services, including selecting the best blend of technologies to develop Shell’s pioneering Holland Hydrogen I green hydrogen facility. The project will draw on our experience across multiple relevant sectors from offshore wind to electrolysis to coordinate collaboration between Shell and an offshore wind farm to produce 50,000–60,000 kg of hydrogen per day.

This demonstrates how neutral conveners straddling multiple sectors can drive the holistic, ‘whole-system’ asset integration and cohesive collaboration necessary for hydrogen. It offers a microcosm of how the wider energy sector could be managed as an interconnected ‘system of systems’ feeding clean hydrogen.

Importantly, this project shows how independent third-party organisations can provide neutral consultancy to help industrial clusters or consortiums select the optimal mix of products and processes from all sectors for any hydrogen application. Vendor-neutral ‘open’ design standards for hydrogen could similarly create a shared ecosystem of hydrogen technologies so that all projects can draw on a best-in-class blend of solutions.

The hydrogen revolution

The clean hydrogen revolution will require an unprecedented effort uniting industry, academia and government and bringing together a massive value chain spanning multiple industries and sectors.  This energy system integration has the capacity to simultaneously decarbonise various industries from transport to heating and store and spread clean power and heat across our economy. Yet a fragmented and siloed hydrogen value chain will mean new generating capacity cannot keep pace with demand for decarbonisation.

Speeding up development will require us to harmonise diverse practices and technologies through common standards, regulations, project management models and cross-sector specialists bridging multiple industries. We should create industrial clusters, catapults, consortiums and public-private partnerships uniting industry, investors, governments and regulators to drive collaborative research and development.

Finally, we also need overarching frameworks for standardisation and coordination of hydrogen production, storage and distribution. Ultimately, the aim is to manage the energy sector as a single interoperable ecosystem where energy sources, expertise and assets can circulate freely across sectors.