Written by – Chandrashekhar Chincholkar on Digilah (Tech Thought Leadership)
The World is going through a serious climate crisis, and it is important to start addressing the issue. Paris Agreement signing by 194 Nations and subsequent submission of INDC (Intended Nationally Determined Contributions) has set the ball rolling.
COP 26 strengthened commitments from various countries further to Energy Transition. The move towards complete Green / Renewable Energy is the need of the hour. Solar, Wind, Renewable Fuels like Hydrogen is the real need of the hour. Solar prices per unit have dropped significantly in the last 10-12 years and it is important to move faster to further penetration in power generation through Renewable Power.
Hydrogen as a fuel of the future has a lot of promise but the initial costs of Hydrogen Green are higher. The Green Hydrogen prices are in the range of $ 5-8 per Kg. Further reduction in electrolyzer power consumption required per Kg of Hydrogen needs to drop at least 20-25%. Also, the technological advancements to reduce the cost of Electrolyzer is also the biggest need for low cost of Hydrogen / Kg.
Decarbonization which is the biggest need for the World today has two major areas from Energy perspective:
- Mobility related Decarbonization – which is approx. 22%.
- Manufacturing related Decarbonization – which is approx. 78%.
Both these phases of Decarbonization needs huge capex going ahead and as per recent reports from IEA and Mckinsey, the funding requirement will range from $ 150 to $ 270 Trillion over the next 30 years. This is going to be biggest challenging area for the World as Corporates gear up for Decarbonization in every activity. This move towards Decarbonization will address the biggest concerns faced by Institutional Investors as ESG (Environmental, Social and Governance) reporting and disclosures becomes deeper day by day.
Challenging times ahead for Global Economies and Corporates.
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