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Hydrogen’s $230 Billion Funding Call Is Still Awaiting an Answer


(Bloomberg) Hydrogen projects heralded as a clean energy answer to the globe’s industrial and transport needs will need to demonstrate to lenders they can generate more certain returns, in order to attract the required $230 billion in financing this decade, according to French investment bank Natixis SA.

In the global fight against climate change governments, energy companies, banks and investors are looking for ways to cut carbon emissions and how to pay for it. While renewable energy technologies like wind and solar power have plunged in cost, hydrogen remains expensive.

Government policies that help create demand for hydrogen as an energy source will make it easier for banks, export credit agencies and infrastructure funds to provide financing, Natixis utilities analyst Ivan Pavlovic said in an interview.

“The industry as a whole is plagued by the lack of cost competitiveness” compared with other energy supply sources, Pavlovic said. Putting a cost on carbon emissions “would be a way to bridge the cost gap” between cleaner hydrogen energy and dirtier fuels currently in use, he said. The could take the form of a carbon tax or emissions trading programs, he said.

Of the $300 billion in investment — the figure industry trade group the Hydrogen Council says is needed by 2030 to develop all projects currently announced — less than a third has been pledged by governments. Nor are banks ready to take up the slack, according to the French lender.

Green hydrogen, which can be produced from renewables like solar and wind power, can serve as a source of power, energy storage or as a fuel for mobility while producing no carbon emissions. State-supported infrastructure projects could help create demand for the fuel, Pavlovic said. A project like an airport designed to be powered with hydrogen and to use the fuel for its buses and support vehicles would create a large customer for the fuel.

Natixis is among the more than 100 mainly energy and industrial companies, utilities and investment groups and banks that are members of the Hydrogen Council. The world’s largest oil company Saudi Aramco, U.S. major Chevron Corp., airplane manufacturer Airbus SE and automakers General Motors Co., Daimler AG and BMW AG are all members.



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