Can hydrogen bring about true transformation of our energy systems?

Growing interest in hydrogen’s potential as a low-carbon energy vector has been gaining ground. What trajectory would these system decisions take us on? Annabel Johnstone, Forum’s Project Officer, explores more in this blog. 

Redesigning energy systems is no mean feat, but it does get a lot more exciting when we engage our imagination. Envisioning future energy usage opens endless opportunities for positive impacts, creating ripple effects on our lives through the energy sector's transformative potential. 

Hydrogen has risen to the fore as a promising low-carbon energy vector, touted to be able to “drop-in” to existing infrastructure without the need for consumer behaviour change. It does not emit carbon dioxide when combusted and provides a more flexible energy supply solution, unlike electricity generated by renewables which must be fed into a network immediately or used and/or stored on site. As a result, billions of dollars are beginning to flow into new hydrogen projects and new regulations are being drafted rapidly to keep the development truly aligned towards Net Zero goals. 

But does hydrogen, as an energy carrier, support our most hopeful imaginations? Can it really create a future that is just and regenerative, fundamentally changing how we perceive, produce, consume and energy?  

Can hydrogen bring about true transformation of our energy systems? 

Hydrogen is set to be a central pillar of many countries’ de-carbonisation plans and it is also a major feature of green growth plans. Its investment and innovation are thus moving fast.  

The ‘hype around hydrogen’ is quasi-business tongue for a flurry of big investments in new innovations enabled by favourable legislation. To realize hydrogen's potential at scale, infrastructure and market development are crucial. However, current technology development remains niche, with hydrogen mainly used in rocket fuel, refining, and chemical fertilizers. This raises questions about whether hydrogen is a universal solution. While the future hydrogen economy promises job creation and emission reduction, does it truly stand out compared to other decarbonization pathways like wind and solar? 

Nonetheless, an influx of innovation is far from a true transformation of the energy system. Our energy system is currently facing a need to transition away from carbon-based fuels, but there are other aspects of the energy system that need transformation too, and for this transition to be a just one, they likely cannot be ignored. These aspects include: 

  1. Justice: Some areas of the world have access to Power (kW) that is beyond comprehension to most of us, and some areas have access to very little. Even within countries, inequitable access to energy is growing and energy has tremendous impacts on our ability to create. This must be addressed in the transition, and there is less discussion on how hydrogen can leverage change apart from when it’s part of decentralised, locally owned systems. 

  1. Transparency and participation: There is very little open dialogue on the rationale and implementation involved in planning the energy transition, which is often embedded into existing political and social regimes, and this appears to be par for the course. The benefits of participation in the energy system are clear from the grassroots groups pushing for community energy systems. But in these developments, where low costs are critical, it’s rare to see a strategy of developing hydrogen as a predominant energy carrier. 

  1. Consumption: Discussions around hydrogen rarely mention a deceleration of energy demand. Indeed, hydrogen developments usually enable decarbonisation of energy intensive activities such as luxury transport and industrial processes. Hydrogen’s popularity as a drop-in solution actively steers conversation away from engaging with where our energy comes from, and how it’s generated—something that, in centralised systems, is rarely considered by the consumer. An understanding of limits to supply will be important, particularly from industrialised nations for a Just Transition according to the Paris Agreement. It is clear that industrialised nations are consuming far too much resource and need to re-think the extractive linear growth model that has brought them to this point. However, discourse around the future hydrogen economy is largely coming from a mindset of green capitalism. 

Put simply, there is a risk that big hydrogen development could be seen as a quick substitute for fossil fuels. This may hinder the transition away from carbon-intensive energy generation while allowing existing non-physical structures like norms, policies, and mindsets to remain in place, blocking positive shifts.

Hydrogen’s potential—positive or negative? 

The Three Horizons framework by Bill Sharpe provides a useful tool for transition planning according to a desired future goal. Within it, there are three horizons: Horizon 3, which is the desired end state of the transition; Horizon 1, which is the state of play today; and Horizon 2, which represents the transitionary period to get from Horizon 1 to Horizon 3. 

Horizon 2 can be approached in two ways: H2+ innovations are those that genuinely move on from Horizon 1 and make Horizon 3 more likely. On the other hand, H2- innovations are the 'band-aids' that either sustain a failing Horizon 1, or get absorbed into it and end up losing all their innovative power. 

Assuming Net Zero aligned with a just and regenerative transition is the desired end state, there are a few worrying signs of hydrogen being an H2- innovation:  

  • Blue hydrogen – touted as the transition tool towards green hydrogen – can and will act to enable a lock-in of fossil fuel infrastructure. Currently, 99% of hydrogen produced is made using fossil fuels, and will likely take too long to start seeing better ratios of blue/green hydrogen in a way that’s meaningful for meeting the Paris Agreement. What’s more, blue hydrogen likely won’t have valuable carbon emissions savings compared to renewable energy technologies, and risks diluting investment in green hydrogen developments.  

  • Hydrogen powered energy is likely to be more expensive relative to today’s energy supply due to increased shipping costs, leakage and less favourable energy density. Doubts over green hydrogen’s viability are building – whatever colour hydrogen it is, hydrogen gas and/or liquified hydrogen has a low volumetric energy density so it takes up a lot of space per a unit of energy, which hampers the economics of global supply routes and just-in-time supply. Other energy sources however, like wind and solar, will be relatively cheaper or no more expensive than today. 

  • The hydrogen that is currently in use in today’s economy is used in high precision technical environments, and its application in mass deployment is raising doubts on its safety given how flammable it is. 

  • Large amounts of land are being designated for green hydrogen development creating tensions over resource-use prioritisation. Similar concerns are rising in regards to the need for clean fresh water when creating green hydrogen – is hydrogen the best use of this valuable and increasingly scarce resource, especially when the hydrogen development is in land vulnerable to drought? 

What about H2+? 

  • The difficulties in hydrogen transportation means that energy systems could become a lot more decentralised. Decentralised energy systems are known to provide greater co-benefits to its users: increasing jobs, diversifying skills, enabling resilience and community cohesion. 

  • Green hydrogen, once its Capital Expenditure is paid off, uses renewables and accessible resources– it’s powered by our common goods (water + weather). If we depend on hydrogen for our energy systems, it would make economic sense to tackle the degradation of our natural resources and shrinkage of access to commons such as water. While it’s not a certainty that increased need for clean water in the energy system would engender a mindset towards the (massive and growing) business case of regenerating our natural resources, it is a clear example of the dependencies that many of our services and utilities have on renewable natural systems. When that dependency is clearly acknowledged in the business model, it becomes a business risk to not invest in its resilience. 

Creating a better energy future 

Ultimately, while hydrogen can provide useful shifts in greenhouse gas emissions when done right (though this is still debated), developing hydrogen as a drop-in solution for systems with a singular goal of reducing emissions is unlikely to lead to just and regenerative systemic change.  

Hydrogen development can be used to prop up the system we are trying to transition away from, and it is worth bearing in mind that hydrogen itself is neither good nor bad – it's a natural element which we can find value in using. Hydrogen can be the right choice, when the environmental, social and private sector conditions are favourable to it being used in a low-cost, responsible manner. It is how we choose to plan and deploy hydrogen that makes it a H2+ or H2- element of energy supply.  

In a time where investment in hydrogen is rocketing, it is worth remembering the future we are creating. We have the chance to design for justice and regeneration in the energy system, and there are pockets of this mindset emerging. What would you choose if you could design the energy system, if you let your imagination run without inhibition? What is its value to you or your neighbour, what is its cost, and what does that tell you about what matters most to you?  

Hold onto those principles and apply them to the transition. Talk to others about it and hear their point of view. We have a lot of work to do. 

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