The importance of hydrogen will continue to grow

Read the Swedish version here.

Why is hydrogen important for the Swedish energy system?

“Hydrogen is above all an energy carrier and transporter of all kinds of fossil-free electricity production. Hydrogen indirectly leads to securing the future of existing and new industry, as it creates the conditions for replacing fossil based raw materials that are otherwise used in these processes,” says Oskar Almén.

What challenges can hydrogen solve?

“Fossil-free hydrogen can be used in, for example, steel production, liquid fuel and for fertilizer production. The cost of producing hydrogen has fallen somewhat recently, and technologies for using it have been given a major boost through, among others, the Hybrit project. Initiatives that are leading the development of electrofuel plants are also driving the profitability of hydrogen-based production processes,” Oskar continues.

What are Sweden’s particular issues around hydrogen use?

“Sweden has comparatively little experience of nationwide gas infrastructure and therefore needs to build up knowledge and expertise on a large scale. The situation in other countries is partly different, with players who, in addition to working with fossil fuel gas, are also central to the hydrogen market. On the other hand, Swedish industry has understood the value of restructuring early on, and therefore shown a great willingness to make up for the knowledge gap that exists.”

Should we build a new infrastructure for hydrogen?

“Electricity and hydrogen are used in different ways, but complement each other as a substitute for fossil fuel energy sources. Green hydrogen is relatively expensive and is best used for processes where other solutions are not suitable. But costs will decrease for both hydrogen production and distribution as the market and volumes increase. Initially, relatively large and risky investments must be made in infrastructure and individual facilities before the technology reduces to lower levels of cost. We recognize this from other innovations such as mobile telephony. This was an extremely expensive way of communicating until it became widespread.”

How much money is invested in hydrogen today?

“Globally, it is astronomical amounts, and in the EU alone, it is estimated that the total investment needed for the production of renewable hydrogen by 2050 will amount to EUR 470 billion. In Sweden, Hybrit and H2GS are major players, while Ovako in Hofors was the first in the world to heat steel with fossil-free hydrogen before the rolling process.”

What can you expect as an energy customer?

“It all depends on your profile and focus. If you benefit from hydrogen in your production or can produce it, it can give you a great advantage over your competitors to act early. We are seeing proposals in the transport sector, for example, where factors such as the emissions reduction obligation are forcing changes that can only be implemented with the help of hydrogen.”

It sounds obvious that everyone should work with hydrogen. Why isn’t it moving faster?

“We feel that there is a lot of activity among energy companies and in industry, but an important issue to consider is in how each player should act. Business models for economically sustainable and long-term participation in a hydrogen economy are difficult issues to define. Everyone wonders what the actual value of fossil-free hydrogen is. The energy sector and wider industry are used to reasoning about spot prices and making advanced price forecasts for electricity, but now the complexity is increasing as technical risk, market risk and other elements have a greater impact.”

”In addition to the market's actions, it is of course very important that policies and regulations catch up and keep up. As I said, we have a greater experience of electricity than gas in Sweden and there is a lack of guidelines to meet the needs of the market so it can dare to make multi-billion investment decisions. Several brave actors have taken a position, but more will as regulations and political ambitions become clearer.”