• Hydrogen
  • Hydrogen infrastructure
  • Energy Industry
  • Energy Ecosystem

More Stakeholders Likely to Invest in Hydrogen Power Generators

Pritil Gunjan
Jul 13, 2021


The energy transformation is causing massive disruption across the entire energy value chain. Decarbonization and multilateral clean energy efforts, which have been widely encouraged to address climate change, have created an irreversible shift toward an increasingly intelligent, resilient, and distributed energy ecosystem. Power generation ecosystems are moving toward a multidirectional network that supports two-way energy flows in which customer applications, low carbon emissions, innovation, and resiliency will be the key technology drivers. The electric power generation industry is accelerating toward diverse sources of generation as well as asset ownership, price deceleration, incremental research and innovation, and regulatory support. 

New Technology Paves the Way for Future Investment

In a recent virtual tour of the Zero Emission Hydrogen Turbine Center at Siemens Energy’s gas turbine test facility in Sweden, the company demonstrated a potential sustainable and flexible energy system that integrates renewables, hydrogen-ready turbines, and energy storage. At this facility, excess energy from gas turbine tests and electricity from solar panels is used to produce hydrogen in an electrolyzer. The energy is then stored as compressed hydrogen and batteries. 

The market for hydrogen is transitioning toward wider adoption, driven by improving economics, growing government support, and a demand for clean and reliable power. In recent years, hydrogen has gained significant momentum as countries, cities, organizations, and industries plan to decarbonize.

Since the combustion of hydrogen produces no CO2, displacement of natural gas fuel with hydrogen is a viable means of enabling carbon-neutral power plant operation. Additionally, blending natural gas and hydrogen can substantially lower carbon emissions. Substituting natural gas with hydrogen over time means that investments in gas power plants today will have an extended lifetime viability. 

Increased Government Focus on Hydrogen

Regulatory and legislative incentives continue to encourage technology deployments as interest in greenhouse gas emission-reduction targets, energy security, and economic growth are resurging within governmental landscapes. In 2020, the European Union proposed nearly $500 billion as part of its economic recovery plan and unveiled a sweeping hydrogen strategy with 40 GW of electrolyzer capacity to be installed by 2030. The US Department of Energy (DOE) announced $64 million worth of funding for 18 projects that will support the H2@Scale vision for affordable hydrogen production, storage, distribution, and use. The DOE also plans to invest up to $100 million over 5 years in two new National Laboratory-led consortia to advance R&D for hydrogen and fuel cell technologies.

Nearly all hydrogen produced today is used for refining petroleum, treating metals, producing fertilizer, and processing foods. While hydrogen demand has traditionally been concentrated in the industrial sector, the power generation industry is beginning to recognize hydrogen’s value. Hydrogen has the potential to be competitive for high value, flexible generation and a longer-term energy storage asset to provide short-term, multi-hour balancing when coupled with storage solutions.