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The pressing need for new clean energy economic model

The pressing need for new clean energy economic model

OPINION | By Paul McCormack, CEO, Hydrogen Ireland.

Trying to integrate clean energy vectors such as hydrogen, wind, solar etc, into today’s fossil fuel informed energy economy is akin to the old idiom of trying to fit a square peg in a round hole. The two do not align and if we continue to force the issue it will result in failure and significant delays in tackling the energy trilemma of climate change, energy cost and energy access. Developing and delivering a balanced pathway to net zero requires the basic recognition of the need for a completely different energy equation and then the need to construct one that realises the full environmental, economic and societal benefits of the clean energy vectors.

The transition to net zero is a journey that requires the full implementation of zero carbon technologies and vectors such as green hydrogen, not merely the addition of these to a traditional energy process.  Successful energy transitions are not demand led they must be leadership led, with policies, new innovative products and strategies that lead to changes in usage. If we adhere to the current model where renewables and other clean energies like green hydrogen are merely add on’s then the system will not deliver the results to meet our carbon targets.

The pathway to net zero with the Paris Agreement milestones at 2030 and 2050 is well identified but it is the fossil fuel companies that are setting the pace and already changing the narrative and targets.  The news from COP28 highlights that the bar has been set lower than expected and instead of having an incrementally faster route to net zero by 2050  this is being postponed, we are adopting a slower route and we will still be burning fossil fuels well beyond 2050. Most oil and gas companies are watching the energy transition from the side-lines and paying scant attention for urgent need for action.Postponing action and taking a slower route to the Paris Agreement targets of 2030 and net zero emissions by 2050 will only serve to worsen the climate crisis, restrict clean energy technology research and restrict the widespread benefits of a clean energy economy.

If we are serious about providing clean energy solutions to tackle the climate crisis, deliver energy security and achieve sovereignty for non-fossil fuel countries then we must look to the how, where and when we can devise a new energy model that is fit for purpose.

There are several factors that are highlighted as to the perceived unsuitability of the current energy economic model for clean hydrogen integration. These include production costs, infrastructure challenges, market incentives, technology development and policy and regulation. These at first appear to be significant challenges on their own and in totality present substantial obstacles in achieving a clean energy economy. However, if we were to  change the benchmark metric from that of the current energy model to one where we should embrace all clean energy potential then these obstacles are not insurmountable.

The GenComm hydrogen hubs successfully illustrated the build out of renewable energy generation including Off shore wind, Solar Farms and Anaerobic Digestion systems, demonstrating how hydrogen as an energy vector can capture curtailed and constrained energy and be used in achieving increased energy system efficiencies.

A new energy model would include a combination of policy interventions, market reforms, and technological advancements. Some potential strategies that do not ‘fit’ the current model would include implementing carbon pricing mechanisms, providing financial incentives for clean hydrogen production, investing in research and development, and fostering international cooperation on hydrogen standards and trade. It has to be recognised that governments, industry stakeholders, and researchers are actively working on developing new frameworks and policies to facilitate the integration of clean hydrogen, but they are shackled with trying to get them to fit into the existing energy economic model. As clean energy technologies evolve and mature and obstacles such as cost are reducing through competition, then we must witness the evolution of a new economic model to better accommodate and incentivise the clean hydrogen revolution and meet the real challenges of sustainability. Implementing a new economic model for clean hydrogen integration requires a step change in the current approach. It needs an holistic and coordinated approach involving government policies, regulatory frameworks, industry collaboration, and public support. We are living in times that require action and as such the energy landscape and technologies will continue to evolve, therefore flexibility and adaptability are key. Crucial for the success of the new clean energy economic model will be the provision of regular reassessment and adjustment of policies based on technological advancements and market developments.

In conclusion we must develop a dedicated clean energy route to net zero and not settle on the current position of being in the slow lane of the current fossil fuel highway. It is widely agreed that there are many challenges associated with transitioning from traditional fossil fuel-based energy systems to cleaner and more sustainable alternatives. However, we must ‘treat the symptom, not the cause,’ and address the challenge that we cannot retrofit clean energy solutions into an energy model that is outdated, polluting and runs contrary to our long term environmental. economic and social need. We must construct new and not have a sequential retrofit that maintains the CO2 status quo.