The industry will also need to grapple with building or sourcing enough clean energy to run these machines. Electrolyzers are extremely power-hungry: The IEA estimates that between 44 and 90 gigawatts of renewable energy will be dedicated to hydrogen production over the next four years.
Despite the difficulties, the puzzle pieces have started to come together for the supply of clean hydrogen to grow, even if the exact speed and scale of that growth remains a question mark. The generous U.S. subsidies — estimated by some to be worth hundreds of billions of dollars — have made it inevitable that the world will soon have much more clean hydrogen than it does today.
But who exactly is going to buy all of this fuel once it’s available?
Ideally, only the industries for which direct electrification is not a viable option. If batteries or renewable electricity can do the job — for instance, power a passenger vehicle or heat a home — it doesn’t make sense from an economic or energy-efficiency perspective to bring hydrogen into the mix.
In the near term, the most promising anchor customer for clean hydrogen is the fertilizer industry, which, alongside oil refining, is one of the biggest consumers of conventional dirty hydrogen. Though more hydrogen is used for refining, analysts see fertilizer companies as more likely end users for clean hydrogen; oil and gas companies are less likely to voluntarily swap their fossil-fuel-based hydrogen for a version produced with renewable energy.
BloombergNEF, for its part, foresees exponential growth in total hydrogen demand starting in the 2030s, once much of today’s planned clean-hydrogen production capacity is online. It expects industries such as steelmaking, aviation and shipping to lead the way in terms of new demand as they begin to work clean hydrogen into their processes.
