Green hydrogen will play a disappointingly small role in global decarbonization between now and 2030, according to International Energy Agency executive director Fatih Birol.
Despite a plethora of projects and “huge excitement” around green hydrogen, Birol said IEA research had found a significant gap between the hype and the reality.
Speaking at a press conference for the launch of the IEA’s Renewables market report, Birol said: “Of all the projects today in the pipeline, only 7% will see the light of day and come online before 2030.”
He said this was “disappointing news”, because green hydrogen “can and should play a very important role to address our climate challenge and diversify the energy mix”.
Birol said the hydrogen bubble had burst because of a slow pace of projects reaching an investment decision, combined with a limited appetite from off-takers and higher production costs.
To fully convince investors, Birol said ambitious project announcements should be followed by consistent policies supporting demand, adding that he hoped “to see governments take steps to create demand for hydrogen”.
Green hydrogen reality check
Heymi Bahar, senior renewables analyst at the IEA, confirmed that he expected a “small” number of green hydrogen capacity to become operational in the next five years, and added that, “compared to last year, we are less optimistic [on green hydrogen].”
The hydrogen story was, however, the downbeat note of an otherwise extremely positive review of the performance of renewables in 2023.
In fact, Birol said it was “a wow effect” as the world added almost 50% more renewable capacity (nearly 510GW) than it did in 2022. “This is a historic jump,” he stated.
Birol said many nations broke records in 2023, however he stressed that “if there is one country I need to single out, it is China”.
“China is the single most important driver of this spectacular growth in 2023. This is great news for people who want to see a better planet and a better future for everyone.”
China commissioned as much solar PV in 2023 as the entire world did in 2022, while the country’s wind power additions rose by 66% year-on-year.
Europe, the US, and Brazil also hit all-time highs, and India is also enjoying a surge in clean energy investment thanks to attractive incentive policies.
Globally, solar PV and wind accounted for 95% of the expansion, and the IEA expects renewables to overtake coal to become the largest source of global electricity generation by early 2025.
Birol said that the new report “shows that under current policies and market conditions, global renewable capacity is already on course to increase by two-and-a-half times by 2030”.
This, he added, was not enough to reach the goal set at COP28 in Dubai in December to triple renewable capacity, “but we’re moving closer – and governments have the tools needed to close the gap”.
“Onshore wind and solar PV are cheaper today than new fossil fuel plants almost everywhere and cheaper than existing fossil fuel plants in most countries,” said Birol.
However, he added that there are still “big hurdles to overcome”, including what he called a “difficult global macroeconomic environment”.
“For me, the most important challenge for the international community is rapidly scaling up financing and deployment of renewables in most emerging and developing economies, many of which are being left behind in the new energy economy. Success in meeting the tripling goal will hinge on this.”
The report also highlights that 2023 saw the role of biofuels “come to the fore”. It states that emerging economies, led by Brazil and India, are expected to drive 70% of global demand over the next five years, as the IEA expects biofuels to “start to show their true potential in hard-to-abate sectors such as air travel and as a replacement for highly polluting fuels like diesel”.
To access the report click here.
Originally published in Power Engineering International.