According to the International Energy Agency (IEA), electricity produced from renewable energy has expanded faster than ever in the last four years. The IEA believes global renewable electricity could increase by 50% in the next five years, partly supported by more affordable solar energy. A further study by Carbon Brief shows that electricity from renewables exceeded gas and coal for a whole quarter for the first time ever. Renewable energy is forecast to grow by 1,200 gigawatts (GW) over the next five years, equating to the total electricity capacity in the United States.

Can hydrogen follow a similar path to solar?

Renewable energy sources make up approximately 26% of the world’s electricity, and studies suggest it will exceed 30% by 2024. Global solar capacity is due to rise by 600GW within the same period. When considering the progress of the solar industry, nations like China must be mentioned for their impact on accelerated solar development. China expanded the scale of solar adoption worldwide, and some energy analysts believe hydrogen can follow a similar path.

While wind and solar may continue to dominate the renewable energy scene, hydrogen is rapidly growing and has become a critical part of the renewable energy mix in many countries. The IEA suggest that low-carbon hydrogen production has increased from 0.04 million tonnes in 2010 to 0.36 million tonnes in 2019. Studies indicate this figure will reach 1.45 million tonnes by 2023 based on existing and planned hydrogen facilities worldwide.

More importantly, the cost of hydrogen production is declining at a pace, with studies from the US Department of Energy forecasting prices to drop from $6kg-1 in 2015 to $2kg-1 by 2025. There is hope that hydrogen will become a vital source for achieving our global climate targets.

With these industry developments, countries like China have expanded their efforts in the hydrogen industry and intend to reduce their dependence on fossil fuels, particularly coal. China now leads the world in hydrogen production, with an annual output of 20 million tonnes, equating to over 30% of global hydrogen production. The challenge, however, is that the bulk of their production is fossil fuel-reliant hydrogen. Despite its significant potential, hydrogen faces the challenge of distinguishing itself between "grey" and "green" hydrogen.

According to the International Renewable Energy Agency (IRENA), 95% of global hydrogen production is grey, which relies on natural gas as a feedstock to produce hydrogen and carbon monoxide. Grey hydrogen can combine with carbon capture and storage facilities, but the fact remains that most global hydrogen production is still associated with natural gas.

Despite the challenges, there is optimism around hydrogen, especially with energy leaders like China and their dominance of the solar industry as an example of how hydrogen could expand worldwide. Installed solar capacity in China increased from 4.2GW in 2012 to nearly 205GW in 2019. At the same time, prices declined from $3.57 in 2016 to $2.91 per watt in 2019. The decrease in costs associated with hydrogen fuel cells could mean hydrogen follows a similar path to solar. The Hydrogen Council explains that the price of 1kw of stored hydrogen decreased from $500 in 2010 to $60 in 2020. The global industry group anticipates a further decline to $30 by 2050.

Is hydrogen critical in establishing a renewable energy future in Europe?

EU climate chief Frans Timmermans believes hydrogen is a critical part of the future economy in Europe, particularly for storing and transporting green energy. Timmermans explained to the European Parliament that he strongly believes in green hydrogen as the core of their future energy system.

Bloomberg New Energy Finance (BNEF) recently produced two alternative energy futures for Europe - an “Economic Transition Scenario” and a more ambitious “Net Zero Scenario”. In the Economic Transition Scenario, fossil fuel use in Europe drops 28% by 2050. A significant reduction in coal use is the biggest contributory factor, while the rise of electric vehicles reduces oil demand by 30% by 2050.

In contrast, the Net Zero Scenario for Europe sees fossil fuels removed from the energy mix altogether by 2050, enabled by a transition to electrification and the support of green hydrogen. Wind and solar represent the core energy sources in this scenario, replacing fossil fuels and removing energy-related carbon emissions.

To achieve this Net Zero Scenario, Europe requires a significant decline in oil and gas consumption and accelerated wind and solar production. To continue on this path towards net-zero, Europe needs to double its solar and onshore wind power capacity by 2025, compared with 2016-20.

BNEF highlights that most new gas facilities constructed in Europe must be hydrogen-compatible. Europe must focus on developing hydrogen-ready infrastructure to enable continued reductions in emissions across all industries.

Additional wind and solar infrastructure is required to produce the scaling of green hydrogen generation. According to BNEF, Europe requires $3.8 trillion of investment in new power generation projects, particularly wind and solar, between now and 2050. Europe also needs to invest $1.5 trillion in clean hydrogen facilities.

The cost has presented a historical challenge for hydrogen development, but studies show that prices are declining and have accelerated global hydrogen capacity. While wind and solar still represent the most important sources of renewable energy based on investment and capacity, the success of solar could be replicated with hydrogen. Accelerating our journey towards net-zero requires a collaborative approach toward wind, solar, and other emerging clean energy industries.

The biggest challenge ahead for hydrogen is transitioning towards green hydrogen. This industry shift will require significant investment in wind and solar and securing the necessary support to enable these projects to progress. Energy infrastructure plans must ensure that green hydrogen represents a vital part of our future energy mix.