Hydrogen could become a leading energy resource as the world transitions away from carbon-based emissions, according to panellists speaking at Infrastructure Investor’s Global Offsite conference on Wednesday.
As governments and investors around the world seek to mitigate the impacts of climate change, natural gas has been touted as a bridge fuel between carbon-heavy energy sources, such as oil and coal, which are being phased out, and cleaner sources of power generation. But according to Jaroslava Korpanec, head of infrastructure at Allianz Capital Partners, hydrogen could become one of the emerging pollution-free resources that powers homes and offices in the future.
“As we became more familiar with the gas industry, it became clear that gas [networks] will play an important role in the transition to net zero emissions, mainly through the role of transmitting hydrogen,” Korpanec told online attendees during a panel discussion focusing on energy transition.
“A significant investment will be needed from the private sector to prepare distribution grids to transport hydrogen.”
Korpanec added that, in some countries, hydrogen could account for up to 50 percent of energy demand by 2050, with the UK leading the way in implementing these investments.
Another panellist, Basil Scarsella, chief executive of UK Power Networks, the UK’s largest distribution network operator, agreed.
“Yes, hydrogen is in the early stages, but I think it will come to pass that hydrogen will become a big part of the solution,” Scarsella said during the panel discussion. “We’re not going to get to 2050 net zero emissions by not using the gas networks,”
But hydrogen is not an opportunity that all infrastructure investors will pursue.
“So far, we don’t see too many investable opportunities in [hydrogen],” Pooja Goyal, a partner at The Carlyle Group, remarked. “These transactions tend to be operationally intensive. We don’t think we’re the right capital provider for that type of operational complexity.”
She added, though, that the ongoing energy transition continues to present new and exciting opportunities in the asset class. “Disruption always leads to opportunity. There is a tremendous amount of creativity among entrepreneurs and we’re very excited about backing some of these companies,” Goyal said.