Hydrogen Economics: New Hopes for Success

10 july 2019

Hydrogen economics, renewable energy sources, aviation fuel and its impact on the cost of flights: those are the topics of the June energy bulletin of the Analytical Center.

Hydrogen technologies are gaining more and more relevance as the global energy sector looks for new sources of energy, the authors of the bulletin write. In their opinion, an increase in the output of hydrogen should help drive demand for it in both traditional and new sectors of the economy, such as: transport, heat and electricity production. For the time being, according to the experts, about 2% of global energy resources is spent on the production of hydrogen but more and more countries are beginning to support hydrogen at the state level. Russia, with its huge potential to produce a lot of hydrogen, is not one of them yet, even though some initiatives have already been put forward, the bulletin says. Meanwhile, according to expert estimates, hydrogen production only at the existing Russian generation facilities could allow Russia to grab a sizable market share in the global market of hydrogen fuel by 2030.

The use of solar and wind power in Russia does not make much sense because of the low cost of other types of energy, the experts continue. They note that in order to cut costs and boost efficiency a broader domestic market is required as well as an increase in exports. In Russia, one of the priorities in the development of renewable energy is expansion of domestic competencies and manufacturing capacity for making power plant equipment. At the moment several new manufacturing facilities have been opened with state support for making solar and wind power plant components and foundations were laid for new facilities that should start making wind power units in 2020.

An increase in air travel around the world in recent years has considerably driven up demand for aviation fuel, the experts write. In the foreseeable future air travel is set to remain a key segment of the global economy where demand for petroleum products is going to continue to grow. As more and more people choose  to travel by air, aviation fuel consumption grows, the experts say this is a result of growing global communications, trade and tourism, especially in Asia, as well as the recent emergence of a large number of low cost air carriers, rising investments in aviation infrastructure and an increase in the number of people who can afford air travel. In the long run, demand for air travel and aviation fuel is going to be driven by further optimization of costs by air carriers to make their offerings more affordable, rising household income resulting in more people choosing air travel as their preferred mode of transport, further growth in global trade, construction and expansion of airports in various parts of the world. The authors prognosticate that the constant rise in air travel in Russia should not have a major impact on ticket prices as aviation fuel is being subsidised in this country.

For more see the bulletin Hydrogen Economics: New Hopes for Success.

Other energy bulletins can be found here.