Ecosystems hold a particular fascination for me. The ecosystem approach has the potential to tackle and help resolve some of the more complex issues we face.
We increasingly are using the word “ecosystem” to describe our environment that we operate within, but often we are diluting its accurate positioning or understanding.
Indeed unique ecosystems are hard to find and certainly to manage. One I really feel reflects a collaborative model worth explaining is the ones that are forming around Hydrogen as the alternative energy vector based on renewables. To replace or become a significant part of any entrenched energy system requires a system design approach. This part of the energy transition fits within the ‘greater’ energy system design.
Let’s look at this with some context and then the clarification that approaching Hydrogen needs a unique Ecosystem design. We are presently building a unique ‘nested’ Hydrogen Ecosystem within the Energy Transition, and it is interesting to explore, firstly, here and then in a follow-up post on one of its specific parts, the Hydrogen Council.
Firstly the big picture needs us to radically change our energy sources due to global warming.
To tackle full decarbonization is one of the world’s most significant challenges over the next 30 years. In the historical Paris Agreement or known in French: L’accord de Paris is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016.
One hundred ninety-five countries signed the accord to address climate change that requires deeper emissions reduction commitments from all countries—developed and developing. It brings us much closer to a safer climate trajectory and creates an ambitious path forward for decades to come. The agreement includes commitments from all major emitting countries to cut their climate-altering pollution and to strengthen those commitments over time.
The energy transition is to re-design around a global energy system built on clean energy.
A really unique part of any energy transformation is how complex this really is. The change requires a massive overhaul to reduce not just our carbon emissions but to put in place radical solutions on how we generate, distribute, store, and consume energy. Our present dependence on fossil fuels needs us to drive exponential growth in renewable energy, such as wind, solar, and the use of water.
Today we are pushing for a carbon-neutral economy as fast as we can. We require wind and solar replacing coal, oil, and gas. Yet this only goes part of the way within the energy system. Delivering clean sources of electricity are well on the road to a sustainable and growing future, increasingly cost-competitive to eliminate large sectors based on coal, oil, and to some degree, natural gas. The hard one to crack is changing the gases we rely upon and currently use in a number of high-level CO2 emissions industries.
We need to find a climate-friendly energy source that overcomes those current end-use sectors that are hard to electrify as they need to require high-intensity heat levels than coal and natural gas provides. These high-grade industry heat sectors, known as hard-to-abate, such as steel and chemicals, some heavy transport, aviation, shipping, agriculture, and industrial feedstocks, need to put in place a clean energy carrier.
Enter Hydrogen, reinvigorated and repurposed based on Renewables and new Technology designs
Presently Hydrogen is the only feasible route for at-scale decarbonization. It is a highly versatile, clean, and flexible energy vector. So many have evaluated the potential of hydrogen sector by sector that ramping up Hydrogen is needed to achieve any energy transition in an efficient and economically attractive way.
The problem today is that Hydrogen is simply not (yet) fit for large-scale deployment. The accepted wisdom is Hydrogen is a really good solution as a clean energy carrier, feedstock, and fuel. It can facilitate the extensive scale integration of renewables through conversion from H2O to pure Hydrogen (H2). The potential to store Hydrogen as renewable Hydrogen can decarbonize the gas grid and can progressively convert incumbent natural gas and coal to this needed low-carbon through working in concert with gas reformation with carbon capture, utilization, and storage solutions (CCUS). It can tackle transport, heating, and cooling in the present energy-intensive industries and is relatively compatible with end-users and offering convenience in any replacement to the existing end-user application.
Hydrogen has been around for years.
It is part of the industrial process today. Arguable it is regarded as a mature business. Today there is a hydrogen market well established, currently estimated at US$135b per year, growing 6 to 8% annually. It is 95% based on fossil fuel extraction due to the intensity of heat required. It is used in the hard-to-abate sectors of chemical refining, iron and steel production, and high-temperature heat applications, including melting, gasifying, drying, and mobilizing a wide array of chemical reactions.
Natural gas is the primary source of hydrogen today, then coal, then oil. In processes through steam methane reforming, it is for producing ammonia and methanol. It is within industries where CO2 is emitted in the atmosphere, significantly contributing to global warming. Although there is limited carbon capture for such products as urea fertilizer, these hard-to-abate industries are being forced to change to the use of clean resource energy. That is likely to be hydrogen due to its heat-generating properties.
Many Industries today do know a lot about the properties of hydrogen and has been “handling” it for decades. Can they change and what level of investment and system re-design does this incur to accelerate its adoption? The challenge is a big one to turn the present reliance on fossil fuels alongside present limited use of hydrogen, into processes where it is hydrogen as the central energy source produced from clean energy or renewables. Hydrogen solutions will need to be radically different.
The push today and in the future is Hydrogen will be based on clean energy sources, renewables.
Today predictions are suggesting an ambitious scenario for hydrogen deployment that Hydrogen could provide up to 24% of total energy demand alone by 2050 (BNEF analysis) and a similar share in one recent estimate provided by Hydrogen Europe for Europe.
The challenge is to balance the seeking of low-carbon electricity through fossil fuels with carbon capture, utilization, and storage with replacing it with green Hydrogen, all generated by renewables. The essential need is to achieve in any replacement of existing fuels or process a minimize disruption and replacement, the same or better return, or provide a compelling logic to make the necessary change such as a clear need to switch to clean energy for competitive or societal pressures.
Today Hydrogen solutions are going through varying levels of proof of concept.
Delivery beyond a promise that Hydrogen based solutions are the viable replacement will need to be a massive ramping out in the commitments. scope, impact, and scale of Hydrogen solutions. These solutions need to keep pushing compelling business cases for gaining industrial commitments to clear energy-friendly alternatives, and this means to get there, there is required significant cost reduction in “all things Hydrogen.” to bring this into realization. Today this is the intent but not the reality.
The ability to scale is exciting in the next two or so decades.
The Ecosystem for Hydrogen needs to offer vision, substance, and all the necessary connected parts.
To undertake such a change from fossil fuels to renewable clean energy needs real organization, it needs a new system to come into play. Each sector cannot leverage something as radical as changing our energy system; it requires global collaboration. To leverage Hydrogen, we need a highly collaborative world, based on an Ecosystem design set of principles.
The conditions for change are driven by the Paris Agreement, signed in 2016 that we need to reduce our greenhouse gases to reverse the global warming effect. To achieve this, we need climate-friendly solutions that reduce all the greenhouse gases of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3).
To tackle something as significant as replacing an established energy system with another, across all its parts of the value chain, is daunting and incredibly complicated.
Complexity needs intense coordination.
To imagine how complex this change to delivering a shift of this magnitude is, one that moves away from a global fossil dependence into the Hydrogen economy in such an ambitious time scale of thirty years needs exceptional design, to give the Paris Agreement a chance to achieve its goals.
Can you imagine a Hydrogen Ecosystem being created and organized, that needs to influence and shape national strategies for energy, provide education and understandings, suggest and provide regulations, standardization, infrastructure, and incentive suggestions?
Shifting the Energy System to Scaling Hydrogen
A shift to a critical energy vector is undoubtedly no easy task in a short period of gaining the required momentum over the next 10 to 20 years. This current decade is designated “the H2 decade” to provide Hydrogen with the momentum, global awareness, and design of the pathway to scaling, and focus it needs. This focus needs to be put in place in these next ten years so it can become an irreversible momentum and proven suggested energy source force by 2030, to gain global recognition and adoption.
To build momentum in any evolution, you need forces that are pushing in the same direction, and the ecosystem design lends itself in a structure that provides the environment for a collective response. Any dynamic environment needs to recognize all of its parts.
Ecosystems need to be orchestrated and implemented in staged, evolutionary ways. Concepts and solutions need to be promoted, debated, and then tested, validated, where eventual winners are determined (Darwin’s evolutionary theory applies). The proposed solutions need to have clear business case validation for making the change, validated in many diverse situations, so the scale and delivery is based on the promise made.
By forming an Ecosystem approach, in the partnerships needed, previous structures formed and built out over a hundred years or so can only succeed by being broken down and reformed around common goals and understanding and that requires having both the incumbent and disruptors working within the same Ecosystem.
This level of collaboration requires something special. An ecosystem to function requires all of its essential parts to function and be an active part, be these regulators, industry, and investors to build, relate, and invest in this ambitious concept. To work towards common goals, in this case of reducing carbon, working towards (eventually) zero emissions.
***The second part of this Ecosystem view looks specifically at the Hydrogen Council that forms the vital role as the catalyst or orchestrator for advancing the changes Hydrogen requires.
***You may like to visit and follow my dedicated #energytransition site for my thoughts on a wide range of topics related to the energy system @ innovating4energy.
