Green hydrogen: A critical balancing act

Green hydrogen: A critical balancing act

Danfoss Impact No. 5

Green hydrogen will play a critical role in the transition away from fossil fuels and in decarbonizing hard-to-abate sectors, such as long-distance shipping and international aviation.

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Scaling hydrogen without breaking the bank or the grid

To keep global average temperature increases under 1.5°C, we must replace fossil-fuel technologies with ones powered by renewable electricity. Energy efficiency, electrification, and renewables will only get us part of the way to net zero. To plug the final piece in the energy transition, we will rely on alternative low-emission fuels to decarbonize the hardest-to-abate sectors. The key solution will be hydrogen.

Low-emission hydrogen is a versatile lever of decarbonization. It can be used as a means of storing excess renewable electricity in periods where supply outstrips demand. Similarly, when produced using renewable electricity, hydrogen can enable us to indirectly electrify sectors that otherwise may take decades to electrify, such as agriculture, aviation, shipping, and heavy industry.

However, while the use cases of green hydrogen are vast, so is its demand for renewable energy. By 2050, hydrogen production will require more than half of today’s total electricity demand. We must produce hydrogen efficiently and use it wisely if we are to maximize its benefits without breaking the bank or our energy grid.

By reducing overall energy demand, producing hydrogen efficiently, and using it wisely, we can effectively decarbonize the sectors and processes that currently contribute an outsized proportion of global greenhouse gas emissions.

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These are the key takeaways

Electrify and reduce demand first

Green hydrogen production is energy-intensive and expensive, and the renewables needed to produce it are not a free resource. Before deploying hydrogen, we must implement all available electrification and energy efficiency measures. Energy efficiency is the most cost-efficient way to reach net zero.

Produce hydrogen efficiently

By 2050, hydrogen production will require more than half of today’s total electricity demand, so how efficiently we convert electricity into hydrogen is critical if we are to limit energy waste. Producing hydrogen when there is excess (and cheap) renewable energy in the grid can reduce costs and stress on our electricity grids. Also, by placing electrolysis plants near existing or planned district energy systems, we can repurpose excess heat to heat water and homes.

Use hydrogen wisely

Despite projections for major increases in the future hydrogen supply, its energy-intensive production process means it will still be a scarce and expensive resource. Therefore, we must use hydrogen wisely and judiciously. When machinery and processes can be directly electrified, they should be. Hydrogen currently remains concentrated in traditional applications, and we need to see a rapid upscaling in hard-to-abate sectors like heavy industry and long-distance transport.

Green hydrogen will play a critical role in the transition away from fossil fuels. The good news is that we already have the necessary technologies to lower the cost of green hydrogen production.
Mika Kulju, President, Danfoss Power Electronics & Drives

Policy recommendations

Now is the time for decision-makers to set the right regulatory and economic framework for an efficient, large-scale rollout of hydrogen. Public support is needed at the local, regional, and national level to address regulatory barriers and improve implementation plans. Similarly, we must stimulate more international cooperation, cross-industry collaboration and synergies. These are also likely to be a driving force behind the innovation, demand, and growth of green hydrogen.

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Green hydrogen: A critical balancing act