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Business of climate change
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Climate change: Why green hydrogen is a long way off replacing fossil fuels in power plants

  • Even though its potential as a clean energy has been well known in the sector for many years, mass commercialisation has yet to happen
  • It will need to overcome technical complexities, supply chain risks and high costs to meet global climate goals, say experts

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Last year power plants accounted for 40 per cent of global energy-related emissions, according to the International Energy Agency. Photo: Corbis via Getty Images
Eric Ng

Green hydrogen, a promising energy for replacing fossil-fuelled power plants, will need to overcome technical complexities, supply chain risks and high costs to meet global climate goals, according to experts.

Despite the fact its potential as a clean energy – through direct combustion – has been well known to the power sector for many years, mass commercialisation has yet to happen.
“At the moment there is no economic benefit to shift to hydrogen, but policies will drive this change,” said Kevin Snowdon, Asia director of risk and analytics at insurance consultancy WTW.
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Increasing global efforts to fight climate change through policies that incentivise greener energy production will see hydrogen gradually replace natural gas in power stations, he said.

Last year power plants accounted for 40 per cent of global energy-related emissions, according to the International Energy Agency. China contributed nearly all of the global increase in electricity and heat sector emissions between 2019 and last year.

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The industry already has the capability to upgrade equipment so that power stations can run on 30 per cent hydrogen, 70 per cent natural gas commercially, Snowdon said.

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