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Hydrogen is gaining prominence as a critical component of the energy transition as significant policy support and government commitment to deep decarbonization are spurring investments in hydrogen. This momentum that has been built along the entire value chain is accelerating cost reduction in hydrogen production, transmission, distribution, retail, and end-applications, says GlobalData, a leading data and analytics company.
The company’s latest report, ‘Global Hydrogen Market Report, 2021 – Market Outlook, Trends, and Key Country Analysis, reveals that with hydrogen rapidly becoming popular as a low- or zero-carbon energy source, most countries are considering a hydrogen-based economy as a solution to the increasing carbon emissions, energy stability, and climate change issues.
Bhavana Sri Pullagura, Senior Power Analyst at GlobalData, comments “Large-scale adoption of hydrogen can fuel a significant increase in demand for renewable power generation. Also, large hydrogen production could help reduce curtailment in grids with a high share of variable renewable electricity. Hydrogen output can be used as a ‘smart’ load to help decarbonize the economy and improve power system flexibility.”
Currently, hydrogen is largely used as a feedstock for industrial processes, in the production of ammonia for fertilizers, refining, and in food, electronics, glass, and metal industries. With global leaders in the energy industry in search of solutions that help them achieve decarbonization or enhance energy security, hydrogen seems to be on track to becoming an energy vector and its use is gathering momentum.
Hydrogen is likely to play a crucial role in clean energy transition in sectors such as transportation, buildings, and power generation. Interest in the use of hydrogen technology is increasing in a range of niche transport market segments, besides other applications. By 2070, global demand for hydrogen is expected to increase sevenfold, with transport, industry, and power being the main users. Hydrogen’s role in the power sector is predicted to have a share of 15%, allowing for more flexible electricity generation.