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Rystad Energy industry analysis reveals that green and blue hydrogen projects that are poised to be developed could unlock US$400bn worth of spending for the service industry between 2020 and 2035

Of the total pipeline, Rystad Energy has recently projected that about 30GW of green hydrogen capacity is expected to be operational by 2035. Blue hydrogen initiatives are also growing in popularity, with several mega-projects being discussed at present. For all of these planned projects to be realised, substantial investments would need to be made over the next few years.

For the projected development that Rystad Energy expects through 2035, as much as US$400bn worth of investments would need to be deployed into the hydrogen market globally. The figure excludes separate carbon capture and storage (CCS) development contracts, which could reach US$35bn for Europe alone. Transport and infrastructure will take the largest share, as this market segment is forecast to reach an attractive total of US$130bn.

Facility construction costs are next on the list, with suppliers targeting an estimated US$120bn. Equipment costs will reach some US$70bn, while engineering costs and maintenance, modifications & operations (MMO) will amount to about US$25bn each. All other categories of costs are calculated at below US$10bn per segment.

Audun Martinsen, head of energy service research at Rystad Energy, said, “At present, hydrogen projects, especially green hydrogen, are centered in Australia and Europe. In Asia, meanwhile, Japan and Korea are looking into importing hydrogen and developing international supply chains around the gas, especially within transportation. Hydrogen is also expected to feature in China’s forthcoming five-year energy plan, as well as in the plans presented by provincial authorities in the country.”

In Europe, a group of 11 gas infrastructure companies has come up with a proposal for the development of EU hydrogen infrastructure starting with key renewable energy regions in Europe, such as the North Sea. Under the proposed infrastructure strategy, a 6,800km pipeline network will need to be built by 2030 to facilitate transportation. 

Around 75% of this network will come from existing gas pipelines, which will be converted to carry hydrogen instead. Nevertheless, an estimated 800,000 tonnes of new large-diameter linepipe will still need to be installed to connect and extend the existing system by 2030.

When it comes to hydrogen storage, large scale storage locations – salt caverns, aquifers or depleted hydrocarbon fields – will be needed, involving either locations already in use for other purposes or developing new ones. Storing and retrieving hydrogen in this manner will require the drilling of a large number of wells – both injectors and producers – thereby creating opportunities for drillers and well service companies to join in on the great hydrogen wave.

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