While hydrogen is a relevant part of the decarbonization narrative, short-term market effects will likely postpone its uptake, Trend reports with reference to Norway-based Equinor company.
“Current geopolitical and energy market turmoil encumbers the development of a hydrogen market. In an uncertain context, governments could delay their decarbonization strategies, making it harder for companies to justify investments in emerging low-carbon technologies,” the report reads.
Equinor believes that power prices will remain stretched between the need for security of supply and the volatility of underlying commodities.
“Both will be dependent upon political changes emerging from the ongoing crisis and weather patterns until 2025. A combination of heightened political tension, a higher share of intermittent generation and lack of investment in dispatchable capacity over the past decade has resulted in the delay of around 10 GW of coal capacity retirements in Europe and a shift towards nuclear for reliability. Russia’s invasion of Ukraine has taken Europe from being the market of last resort for LNG and coal to a prime location. This in turn has substantially increased the fuel cost for power generation across the world. Power prices will be strongly affected by a worldwide surge in fuel prices and the current market design. The sector is expected to lean heavily towards market reforms to provide corrective measures and accelerate the energy transition.”