DNV: Energy executives planning for hydrogen growth

July 12, 2021

Energy professionals identify lack of investment in infrastructure as the joint-highest risk their organizations face in relation to hydrogen, and a large majority (78%) say repurposing existing infrastructure will be crucial to developing a large-scale hydrogen economy, according to a new report from DNV.

DNV’s report, ‘Rising to the Challenge of a Hydrogen Economy,’ draws on a survey of more than 1,100 senior energy professionals and in-depth interviews with industry executives regarding emerging hydrogen value chains, from production to consumption. It suggests that the hydrogen pledges, plans, and pilots of recent years are no longer just ambitions, but have evolved into concrete commitments, investments, and full-scale projects.

Some 84% of senior energy professionals believe that hydrogen has the potential to be a major component of a global, low-carbon, energy system, while three quarters (73%) say Paris Agreement targets will not be possible without a large-scale hydrogen economy.

A strong majority of energy companies (71%) only began their involvement with hydrogen within the past 5 years, according to the report, while 55% only commenced within the past 3 years. For many in DNV’s survey (45%), hydrogen accounts for less than 1% of their organization’s revenue today.

By 2025, 44% of energy companies involved in hydrogen expect it to account for more than a tenth of their revenue, rising to 73% of companies by 2030. This is up significantly from just 8% of companies today.

On the other side of this new energy value chain, 33% of hydrogen consumers expect hydrogen to represent more than a tenth of their organization’s energy or feedstock spending by 2025, rising to 57% by 2030. This is up from just 9% today.

Taking revenue earners and consumers together, a quarter (26%) of energy professionals expect hydrogen to account for half of their organization’s revenue-spending by 2030.

Several questions remain, DNV said, with the view split inconclusively on whether hydrogen trade will become a fully globalized market (42%) or regional market (52%), or whether hydrogen will be priced like oil and gas with free-market forces (41%), or like electricity with a regulated or stable rate of return (43%).

DNV conducted its survey in May 2021. Respondents came from the oil and gas industry (37%); electricity industry (26%); service companies, contractors (52%); transport and heavy industry (19%); and governance, finance, strategy (28%). Respondents were able to select multiple options, with some being involved in several sectors.