to drill for oil and gas and colossal new fossil fuel investments have been announced across the Middle East and Africa.
In a few years when these new sources come onstream, and particularly if economic growth continues to slow and depress energy demand, gas and oil will become cheaper again – until the next price spike prompts new rounds of investment, and the infernal cycle continues. The owners of newly-built wells, pipelines and terminals will fight to defend those assets and stall decarbonization..
The approach to electricity pricing also needs to shift, to decouple the prices of electricity generated from renewables and fossil gas. The marginal pricing system hugely benefits renewable project owners, since they profit from high electricity prices and effectively zero input costs.for generators according to their average costs plus a slight surplus which could be reinvested into deploying more renewables and other green technologies, providing consumers with cheap electricity.
These interventions would give green hydrogen a competitive advantage over blue or grey variants, one that could be furthered with other subsidies, such as tax credits on the model of the U.S.. Above all, energy demand must be reduced to ease upward pressure on price. In any future energy system, hydrogen will have a role. But its expansion must be carefully designed, to prevent the promise of green hydrogen disguising the risks of its blue and grey cousins.
I do know it's a leak waiting to happen. Hydrogen is small and will find a path.