Looking ahead, there will not be one single fuel that covers every application, said Luca Maria Rossi, vice-president of new frontiers at oil field services provider Baker Hughes, emphasising that we will need a multi-source approach. Many of the up and coming technologies like next-generation nuclear and hydrogen are not ready for widescale use yet.
The investment gaps for such an emerging technology, said Katya Akulinicheva, chief financial officer of hydrogen-electric aircraft developer ZeroAvia, tend to lie in the fact that investors are more hesitant to put money behind propositions that have lengthier innovation cycles that take longer to start generating revenue. She also said she hopes more investors will be willing to take the plunge earlier going forward.
Ian Cooper, managing director and head of CVC Europe at National Grid Partners, noted that the decarbonisation of heat poses a tougher challenge than that of electricity, which is already well underway. There are ongoing initiatives including trials to blend hydrogen and biomethane into the gas grid, though that will also require extensive hardware upgrades and smarter grid infrastructure.
It will have to take place gradually, though, as electrifying the entire grid right now would significantly impact bills before we can get the per-kWh cost down. On an optimistic note, Rossi remarked that the situation is comparable to renewable assets that could not in the past survive without government subsidies but are now cost-competitive after a sustained decrease in costs.
The government has an important role to play, particularly in the early stages – during R&D and proof of concept – to support new companies and technologies. Subsequently, it would do well to put in place funding mechanisms that could include direct equity investments, according to Cooper.
Governments’ impact as policy-making entities will also be significant – both in bringing about something like a carbon tax, which would go a long way to make new fuels more competitive while maintaining long-term regulatory certainty for investors.
For a technology like hydrogen, mentioned Akulinicheva, collaboration with the government regarding unchartered regulatory waters, like certifications for hydrogen powertrains, would streamline new transportation technology.
