Now that hydrogen is a reality in the energy transition, keep calm and keep deploying

In an exclusive interview with Energy Connects Editor-in-Chief Chiranjib Sengupta, Ivana Jemelkova, the CEO of Hydrogen Council, spoke about the fast-maturing hydrogen project pipeline as revealed in the Council’s latest Hydrogen Insights report, and outlined why the pace and scale of deployment need to accelerate dramatically to meet global climate goals. That’s despite a sevenfold growth in FID to $75 billion in committed capital and a 92% growth in new project investments in the last six months. Here are the edited excerpts:

What are your thoughts on the role of hydrogen as an essential enabler of the energy transition?

Hydrogen has a key role to play in the energy transition. It is not a silver bullet, it is not the only solution, but we really do see it as a critical enabler and contributor to the fundamental change that we are driving in the energy system. And the benefits span climate, which we have been talking about the most, but other aspects too. We are really looking at impacts on efficiency, on resilience, and those are really important in the immediate, not only looking at the 2050 trajectory.

And that brings me to the latest report from Hydrogen Council that you launched recently…

That's right. So we're really excited to share the latest data and the latest insights from the industry. Our Hydrogen Insights 2024 looks at the global state of play. And as we discussed earlier, there are some good news, which we're very excited about. And there are, for sure, sobering realities, which I think we have to be very aware of and very clear eyes.

Let's hear the good news first.

Yes… I just wanted to get in there. So let me pick one good news. We continue to see growth in terms of projects announcements, which is fantastic. But to me, the most interesting and exciting thing is happening under the surface. So what we're seeing is that clear shift from press releases, ideas, you know, PowerPoints to projects execution and growing maturity of the pipeline. We are now looking at a real shift into FIDs that is very, very interesting. We've been tracking since 2020, so we have really good data on the last four years.

And what we have really seen is a sevenfold growth in FID, sevenfold growth to now $75 billion in committed capital. So that's real projects, real investments. It's working. And we have that literal proof that it's really moving. In just the last six months, we've seen a 92%, I believe, percent growth in FID. So it's picking up pace, it’s moving, and it's very real – which I think is exciting.

So what are the sobering thoughts?

Ah, where shall we begin? Look, I mean, the broader context is that things are not going that well for the energy transition. We are not moving fast enough to meet net zero. And that is true for the energy transition at large. And that is certainly true for hydrogen as well – facing macroeconomic headwinds, facing issues with inefficient or lacking regulation.

The Hydrogen Council was founded in 2017. Around the 2020s, we saw a massive surge in national hydrogen strategies. We are four years in, three years in, two years in some cases. And we are seeing that massive effort to really implement legislation, but in some cases it's missing. In the US, for example, two years post-IRA we still don't have the rules for 45V.

And we’ve really seen our reports, the direct line from policy to project execution, where policy is effective and efficient, projects are flying, where policy is missing, we are really seeing that chunk of projects waiting to get over the FID line. So I think it's interesting because we have in many ways normalised the hydrogen conversation. But now we really need to do the work that's perhaps a little less glamorous – less headlines but more execution.

That's an excellent point that you made about normalising the conversation. Now it's the phase of getting to the trenches and... getting the job done.

That's exactly right. We need to roll up our sleeves and someone joked with me recently: keep calm and keep deploying.

In that process of deploying and looking forward, what other sort of challenges do you foresee in terms of macroeconomic factors and how can companies and the industry do more to make sure that there are no project delays and that they're in alignment with their climate goals?

It's a great question and I think we see three key priorities. One is that regulation, we just talked about it, those effective, efficient incentives that we know have made such a big difference for other technologies historically. Solar and wind did not happen organically, it was pushed, it was pushed with government incentives, government mandates, government targets in different parts of the world. So we really need to keep working on the regulatory aspect and demand side visibility to ensure a match between what's happening on the supply side and what's happening with offtake. That's extremely valuable and clearly driving uptick in project execution – we are really seeing that in our data.

And then the last one I would mention and that is where Hydrogen Council plays a key role is to effectively align on a language or an approach that we use when talking about hydrogen when creating a global market. Right now we're seeing so much fragmentation in terms of even how we describe hydrogen, how we describe, measure value, its attributes, its environmental attributes.

For example, this notion that we need to focus on carbon and carbon intensity as opposed to the different colour ways and different pathways and go into those rabbit holes. Aligning on that common language and standardisation needs to occur so that we can start thinking globally about the flow of hydrogen – that’s a huge priority as well. Thankfully, we are making good progress. We made some big announcements at COP28 last year and we are again rolling up our sleeves and getting things done.

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