The Future of Hydrogen: Framework
After years of extensive research following this energy carrier and its sector, this is the simplest flow chart I’ve come up with that’ll help us frame this Hydrogen spectacle and determine if this hype cycle is different this time:
At this point - the rest is up to you if so choose. Read on if you’d like the rough probabilities of each event likely to happen - the most likely of which have been depicted with orange arrows.
At the highest level - if we run out of fossil fuels - we absolutely need Hydrogen. It’s currently the only alternative we have for processes like steel, cement, and ammonia production. We can debate its use-case for other sectors too, but this is enough for now.
But it doesn’t seem like we’ll run out of fossil fuels.
So the question then becomes - must we continue on this path to achieving Net Zero? If not, there’s no need for the energy carrier - we can simply go about the world the same way we always have.
If we must achieve Net Zero, we then ask if producing or burning Hydrogen is clean. Each answer to these nodes’ questions are not as simple as yes or no. But we must first build a simplified framework, then add complexities later.
Assuming Hydrogen is/can be produced and combusted without emitting CO2 (Green, potentially Blue H2 pathway), we must know whether there are sectors out there that can only be decarbonized with hydrogen.
If there is a sector(s) with no low carbon alternative other than Hydrogen, we evaluate whether Hydrogen is economic.
If a sector has other low carbon alternatives, we evaluate the economics of those alternatives. If they’re better than hydrogen, it’s unlikely Hydrogen prospers.
In the long term - for any product or service - economics will determine adoption.
SO – is it different this time?
There are gray areas across, above, below, and in between each of the nodes you saw above. This is a simple framework using a principle I find helpful and broadly accurate. No one will lay this out like I have - but it’s the “proprietary framework” super-forecasting organizations use to determine Hydrogen demand by 2050 – as you’ll soon see.