Green hydrogen, produced using renewable electricity from wind and solar energy, is presented as a complementary energy carrier, particularly for hard-to-electrify sectors such as steel, cement and long-distance transport. However, the report: 'Electricity, Green Hydrogen, and the Energy Transition' from the Oxford Institute for Energy Studies highlights key challenges, including high production costs, limited infrastructure and competition with direct electrification, which is often more energy efficient, and calls for targeted policy measures to accelerate the adoption of green hydrogen in those sectors where it can have the greatest impact on decarbonising the energy system.
Principles
The Oxford Institute for Energy Studies report “Electricity, Green Hydrogen, and the Energy Transition” explores the crucial and interconnected roles of electricity and green hydrogen in the energy transition, produced from renewable sources such as wind and solar.
The report provides insights into how energy sources and carriers can contribute to the transition to a low-carbon future and what policies and business models are needed to support their development.
Electricity versus green hydrogen
Electricity from renewable sources and green hydrogen both play a crucial role in the energy transition. An integrated approach, supported by technological innovation and effective policies, is essential to achieve the transition to a low-carbon future.
Electricity generated from renewable sources is seen as the primary carrier for decarbonisation. Green hydrogen, produced via electrolysis using renewable electricity, acts as a complementary energy carrier, especially in sectors where direct electrification is challenging, such as heavy industry and certain transport sectors. Green hydrogen production can also help balance the electricity grid by storing and later using excess renewable energy.
Integrating green hydrogen into the energy system can help solve renewable energy intermittency issues by serving as a form of long-term storage and balancing supply and demand.
Innovation and policy
A key challenge is the competition for renewable electricity between direct electrification and green hydrogen production. The report suggests that policy support should focus on markets with the greatest growth potential for green hydrogen, using competitive mechanisms to stimulate innovation and cost reductions.
The report highlights the importance of technological innovation and appropriate policy measures to stimulate the development of green hydrogen. Key strategies include scaling up renewable energy, optimising the efficiency of electrolysers and developing hydrogen storage and transport infrastructure;
A phased approach is advocated, starting with projects where the use of green hydrogen is necessary or highly likely and where demand can grow. In addition, lessons learned from the electricity sector are recommended to foster innovation and cost reductions in the hydrogen sector.
Read the full report here.
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