BloombergNEF Summit London 2024 using the #Hydrogen Gartner 'Hype cycle' as a backdrop to frame up the challenges. Sami Alisawi, #BNEF Hydrogen Analyst, explained highlights the fluctuating dynamics of the clean hydrogen market, both on Demand from off-takers to production and supply due to investors appetite. Despite significant capacities for green hydrogen, reaching 85 million tons, the demand forecast for 2050 under the Net Zero Scenario is over 1 billion tons. However, funding reductions since 2023 have led to a revised demand estimate of 411 million tons.
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Challenges and Opportunities:
1. Overcapacity: Electrolyser capacity exceeds immediate demand, with costs at final investment decisions remaining high.
2. Buyer Shortfall: A small percentage of clean hydrogen capacity has identified buyers, and few projects have reached final investment decisions post-Inflation Reduction Act (#IRA)
3. Project Cancellations: Economic and infrastructural barriers have caused some projects to be shelved.
Opportunities for hydrogen use remain strong, particularly in sectors like aviation and shipping, and through carbon pricing mechanisms in South Korea and Japan.
Steps to Success:
1. Finalise Policies: Develop supportive regulatory frameworks to stabilise and grow the market. #policysupport
2. Reduce Costs: Innovate to decrease production and operational expenses.
3. Increase Offtake: Secure more off-take agreements to match supply with demand.
4. Increase Investment: Attract financial resources to support infrastructure and projects.
5. Start Building (and Finish): Expedite construction and completion of hydrogen projects.
By executing these steps, the market can navigate the current "trough of disillusionment" and advance toward a sustainable hydrogen economy.
We the total announced Green Hydrogen production/ supply 200M Tons. Electrolyser over capacity, with stack assembly capacity, and since the cost of the #Electrolyzers at Final Investment Decisions are higher then expected.
The BNEF Summit in London highlights the challenges of high green hydrogen production costs and underestimated electrolyzer project expenses, complicating the path toward anticipated demand. To overcome these hurdles, the market must focus on policy finalisation, cost reduction, increased investment, and securing off-take agreements to support a sustainable hydrogen future.
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#GreenHydrogen #NetZero #RenewableEnergy #HydrogenEconomy #Sustainability #BNEFSummit2024 #BNEFSummit24 #H2 #BNEFSummit