World Economic Forum puts hydrogen decarbonisation centre stage
The annual World Economic Forum in Davos is back this week following several years of disruption thanks to the coronavirus pandemic, and decarbonisation of hard-to-abate industries with clean hydrogen is high up on the agenda.
A slew of reports from WEF in the weeks running up to this year’s event cover topics including accelerating financing for clean hydrogen projects, how to fund the decarbonisation of hard-to-abate sectors in developing economies, and a very useful piece titled ‘Everything you need to know about hydrogen in the clean energy transition’.
Clean hydrogen and hydrogen-based fuels, says WEF, “could play a central role in efforts to decarbonise the global energy system.” It cites the International Energy Agency in hydrogen and hydrogen-based fuels could stop up to 60 gigatonnes of CO2 being released into the atmosphere by 2050, equivalent to 6% of total cumulative emissions reductions.
According to the International Energy Agency hydrogen and hydrogen-based fuels could stop up to 60 gigatonnes of CO2 being released into the atmosphere by 2050, equivalent to 6% of total cumulative emissions reductions.
WEF also points out the myriad potential uses of clean hydrogen, to help decarbonise hard-to-abate industries, such as chemical manufacturing and refining, power generation and hard-to-electrify heavy mobility sectors like shipping, aviation, railways and buses.
As well as being a cheerleader for the hydrogen economy, WEF is attempting to use its influence to bring about change with the Accelerating Clean Hydrogen Initiative, through which it is aiming to bring together leaders to “identify barriers, drive collaboration and find solutions to the toughest hydrogen challenges.”
The annual World Economic Forum in Davos is back this week following several years of disruption thanks to the coronavirus pandemic, and decarbonisation of hard-to-abate industries with clean hydrogen is high up on the agenda.
The initiative has attracted more than 200 members from 60 organisations, both public and private, encouraging them to collaborate on hydrogen.
One of the main challenges the initiative is aiming to tackle is financing of hydrogen projects. While more than 500 hydrogen projects worth more than $500 billion have been announced globally, only around 5% have reached final investment decision (FID) in Europe.
That is the theme of one of its recent articles, ‘3 ways to accelerate financing for clean hydrogen projects’. First, WEF recommends that projects include a credible industrial sponsor or developer to help reduce risk for financiers. An example of this can be seen in the recent announcement by Ryze Hydrogen and UK energy giant Centrica to develop clean hydrogen projects across the UK.
The World Economic Forum in Davos is taking place from Jan. 16 to Jan. 20.
Second, it suggests Investments into parent companies, with optionality for project-level co-investment. This was demonstrated in the strategic partnership between Fortescue Future Industries (FFI) and Tree Energy Solutions (TES), which included of an equity stake in TES, as well as a direct investment into the construction of TES Green Energy Hub and terminal in Wilhelmshaven, Germany.
Third, WEF highlights the role that contracts for difference (CfDs) can play in ensuring a stable and competitive cost for clean hydrogen and the confidence that ensues for investors. The UK announced the world’s first CfD-based hydrogen subsidy scheme last year.
The World Economic Forum in Davos is taking place from Jan. 16 to Jan. 20.
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