Whitaker Irvin, Jr. is CEO of Q Hydrogen, which is developing a new technology for turning water into clean, efficient, renewable hydrogen.
The global desire to transition from fossil fuels toward alternative energy has gained significant traction, with governments, international organizations, businesses and individuals actively participating in efforts to promote and accelerate energy evolution. While addressing climate change and saving the planet is the overarching concern for finding alternative energy solutions, shifting to hydrogen-based solutions can also offer governments and businesses numerous benefits beyond environmental considerations.
For industries heavily reliant on energy, such as agriculture, long-haul transportation, aviation, logistics, supply chain and manufacturing, hydrogen could present a viable alternative to existing carbon-based fuels and help compensate for the inconsistencies of solar and wind power.
Here are five ways that hydrogen adoption can benefit businesses:
1. Energy cost stability: Considering today’s fossil fuel and natural gas energy prices, renewable hydrogen may become a more cost-effective alternative, especially in the long run. By generating hydrogen on-site or using hydrogen produced from a commercial hydrogen power plant, businesses can hedge against fluctuations in fossil fuel and natural gas prices, creating greater energy cost stability. As of 2022, the cost of green hydrogen created using electrolysis was more affordable than natural gas in the U.K., Sweden, Italy, Spain, France, Germany and Poland. If more countries invest in the hydrogen market, its price will likely continue to decrease.
2. Government incentives and support: The U.S. government and several governments around the world offer financial incentives, tax breaks and grants to businesses that invest in renewable and clean energy solutions. On July 5, 2023, the Biden-Harris administration announced a highly anticipated clean hydrogen strategy and roadmap to meet America’s decarbonization objectives of a carbon-free grid by 2035 and net-zero emissions by 2050. Historic investments have been made through the Bipartisan Infrastructure Law, which authorized $62 billion for the U.S. Department of Energy and allocated $9.5 billion in funding for clean hydrogen. The Regional Clean Hydrogen Hubs program, or H2Hubs, has allocated up to $7 billion to establish six to 10 regional clean hydrogen hubs in the U.S. By adopting hydrogen power, businesses may be able to benefit from clean energy investments, become eligible for various government support programs and receive funding to empower their companies’ future.
3. Reduced regulatory risks and future-proofing. As governments worldwide enforce environmental regulations, businesses that proactively transition to clean energy sources like hydrogen can mitigate future regulatory risks and avoid potential fines or penalties for non-compliance. Governments may tighten regulations and controls to push for less carbon-based existing fuels and more clean energy production. For example, governments may tighten offsets, add qualifications and even tax less desirable fuel use. Businesses can preemptively address environmental regulations by transitioning to different energy sources and reducing emissions, mitigating potential legal and financial risks.
4. Advantages over solar and wind energy: Hydrogen presents unique advantages over solar and wind energy for business owners to consider. Wind and solar energy can face capacity issues due to the sporadic nature of daily and seasonal fluctuations, as well as their dependence on sunlight and wind availability. All of this negatively affects power grid stability. They also require large investments in land or expensive capital-intensive offshore construction operations. Hydrogen’s ability to provide continuous power generation and serve as a reliable energy storage medium can compliment the intermittency of solar and wind sources.
5. New revenue streams: Businesses can explore new revenue streams by venturing into the hydrogen economy. In a report by IDTechEx, the global low-carbon hydrogen market could reach a value of $130 billion by 2033. The hydrogen economy envisions a future energy landscape where clean hydrogen plays a vital role in decarbonizing heavy industries and long-distance transportation, meeting the growing interest in sustainable energy solutions. As an emerging market, there are substantial opportunities for businesses to build infrastructure across the entire hydrogen supply chain.
Leveraging Hydrogen: Advice For Business Leaders
Adopting hydrogen as an energy source requires dedicated planning and serious commitment. A good plan would evaluate the energy needs and processes compared to available hydrogen solutions. While hydrogen solutions may appear to be in their infancy, the opportunities in this sector are growing in number every day. Using progressive engineering consulting firms would be a great starting point for developing a technical feasibility study to shed light on the benefits and economic viability for your individual business.
As hydrogen infrastructure is only starting to be practically laid out, it is incumbent upon the adopter to plan for the required safety, storage and transportation infrastructure. Adopters can do this in concert with hydrogen producers, who can aid in analysis and help identify areas where infrastructure may be shared with others.
Selecting energy generation technology that best matches your goals is essential. If CO2 is not a significant concern, steam methane reforming may produce the hydrogen required at a lower cost but with some emissions. There are ways to capture or sequester those emissions, which will impact cost. The projects people are contemplating today typically look at electrolyzers for energy generation. Keep in mind that powering electrolyzers is not a trivial matter. And it’s not just dollars and cents that must be considered. These decisions could impact the adopter’s social license to operate. Equipment manufacturers are a great source of information and support in this area if you have technical people available to separate sales pitches from facts.
Compliance with regulations and permitting is also in its early stages. As a result, it is essential to find a trusted partner as a consultant in this area. Federal, state and local governments may not yet be equipped with enough expertise in this area, so jurisdictions may tend to err on the side of much stricter requirements than will ultimately be necessary. Select a consulting firm that best matches your physical footprint, as regulations can vary significantly by country.
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