Liebreich: 'It will take until 2030 to rein in the current bout of hydrogen mania… cult deprogramming takes time'
Influential analyst and investor spells out views on how the clean H2 market will really develop in the coming years
Hydrogen: hype, hope and the hard truths around its role in the energy transition
“Let me be quite clear — we will need clean hydrogen. But fantasies of a hydrogen economy, hydrogen society and globally traded hydrogen market need to be abandoned. There will be a global market in ammonia, but mainly for fertilisers, chemicals, shipping fuel and some [energy] storage.”
“There’s an element of cult deprogramming required — it takes time. Once people have become convinced of something, they don’t suddenly become unconvinced the next day. It just takes time,” he explains, adding that some people “in the cult will never relinquish those beliefs”.
“[For blending] if it’s blue hydrogen [made from fossil gas with carbon capture and storage], we take natural gas and remove half the energy, and if it’s green hydrogen [produced from renewable energy], why would we do it when we can use the electricity directly?”
Liebreich’s issues with hydrogen is not related to the cost of the molecule.
“You can try to get round these fundamental physical problems by using hydrogen derivatives like ammonia or methanol, or by using funky storage technologies like hydride or organic liquids. All these introduce process steps, capex, losses, weight, toxins or other nasties.
“Of course it would be nice if this were not the case, but it is. Wishful thinking, policy papers, models and tweets don't create reality. Nor does lobbying, in the end. Physics does. We don't use steam engines because physics. We mainly won't use hydrogen because physics.”
He added that this has “uncomfortable implications”.
“We are going to need a bigger [electricity] grid and we have to start building it now. That means challenging bureaucracy, NIMBYs [not-in-my-backyard opponents] and contrarians. Blink and use hydrogen because of grid constraints, and you lock in a crappy solution forever.”
“As I said, it will take until 2030 for the current hype cycle to die away, leaving only a focus on decarbonizing current hydrogen production and a number of hard-to-abate sectors. There will be vast noise and lobbying along the way, but bit by bit #HydrogenReality will bite.”
(Copyright)