The Hydrogen Economy #58
Green Lightening: The Hydrogen Focus Switches to Transport
Key Points
- The increase in news flow around hydrogen for transport initiatives makes sense given that they require smaller scale hydrogen investment, but we see most transport applications uneconomic and prefer drop-in fuels.
- Transport projects in the US are grant supported and largely “vanity” in nature, while more ambitious plans in Europe will need infrastructure and vehicle investments, and it is unclear whether this is the best path
- Hydrogen handling is the major issue, as well as the implication for vehicle weight – hub and spoke operations make much more sense, as they have for CNG applications. Electric power still makes most sense for autos
- Given we like large scale US blue projects, with the view that blue ammonia will be in short supply, we like the Woodside deal – the project is largely derisked and has the right partners. Cost controls from here will be key.
- We look a couple of results from hydrogen builders, a few new projects, again mostly in Europe and heavily subsidized, a weakening ag market, and why some renewable power prices are rising near-term
Exhibit 1: This IEA analysis suggests that we will fall very short of hydrogen demand based on its NZE forecast, but we may not fall short of transport initiatives in Europe, even though the hydrogen supplied will be very expensive.
Source: IEA
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