80% of the world’s energy still comes from oil, gas and coal. The decarbonization of the economy is a great need, not only for sustainability, but because this change also generates new industries and an economic development model that will provide greater security and energy independence. Continuing to depend on fossil fuels makes us slaves to price volatility and geopolitical conflicts.
However, the transition to a decarbonized economy is a great challenge in which where we are going matters as much as how we are going to achieve it. Our project prospecting team, specialized in scientific and technological venture capital, analyzes hundreds of proposals each year from companies with innovative technologies that promise to change the future. However, it is important to delve into whether the solution they offer is in line with real macro indicators and scientific solutions that truly offer improvement for people in the long term.
A $1.4 billion market
Green hydrogen through electrolysis is a good example. A powerful energy vector that will be key in decarbonization, since it is produced sustainably and has great potential. Consulting firm Deloitte predicts that hydrogen will surpass liquefied natural gas by the end of the decade and will become a $1.4 billion market by 2050.
The era of hydrogen is approaching, but for it to truly be sustainable and its use to become popular, greater innovation in its production process is necessary for it to be cheap and democratized. Technology and science, if they do not have their application and their correct technological transfer processes, do not develop completely or become popular.
Geothermal hydrogen
As an alternative with great potential, geothermal hydrogen arises, which is produced using geothermal energy. This process takes advantage of the Earth’s natural heat to generate electricity, which will then be used in the electrolysis of water.
Geothermal energy is an ancient energy source that involves exploiting hot water deposits beneath the Earth’s surface. Our international team based in Singapore and London, agreeing with the most reputable voices in the sector, believes that it will play an increasingly important role in the global energy mix, if companies manage to effectively exploit the resource on a large scale.
Geothermal energy is obtained by drilling in areas with high geothermal activity to access hot water or steam. Typically, they are found near tectonic plates. Different technologies can be used, which have in common the conversion of the mechanical energy of the vibrating heat particles into mechanical energy of the rotary movement of the turbine. Another method could be the extraction of hydrogen directly from geothermal gases in power plants, but at the moment it is not as widespread or as profitable as the electrolytic production method.
It is estimated that up to 70% of geothermal resources have yet to be discovered. Currently, more than 80 countries have documented reserves of geothermal water and steam. Of said countries, 72 use geothermal energy directly and 24 countries use it to generate electricity. An example could be Iceland, where electricity generated from geothermal energy at competitive prices could be used to produce hydrogen and could supply the entire transport sector.
Another interesting example is that of CeraPhi and Climate Changes Venture, who have partnered to develop and implement a scalable, zero-emission green hydrogen production method using electricity extracted from geothermal sources to power the electrolysis process. This project uses a patented closed-loop technology with a system designed to supply the continuous electrolysis process with the necessary base energy.
The storage of the final product is the same as that of the rest of hydrogens: it is stored in tanks or transformed into vectors for its transport and subsequent use, such as ammonia or methanol.
Among its benefits are sustainability, since it uses renewable energy and low in emissions, availability and complementarity, since it can be integrated with other renewable energy sources to ensure a continuous and stable supply of electricity.
It should be noted that the International Renewable Energy Agency (IRENA) states that geothermal energy has the potential to cover up to 17% of global energy needs.
This type of hydrogen will have an increasingly important role in the global energy mix, if the resource can be effectively exploited on a large scale. Among the challenges that must be faced are the high costs of drilling geothermal wells and building geothermal plants.
It will also be necessary to take into account that not all regions have access to adequate geothermal resources and that the efficiency of this process depends on the temperature and quality of the available resources.
A great asset for international investment
If we analyze business movements and investments, we can affirm that geothermal hydrogen will be very profitable. For example, early last year, Masdar entered the geothermal sector with a major investment in Pertamina Geothermal Energy in Indonesia.
Therein lies the secret, the push from private capital. According to Deloitte figures, significant investment is needed in the supply chain to help optimize the global value of clean hydrogen. More than $9 billion dollars of cumulative investments are needed in the global clean hydrogen supply chain to help meet the goal of net zero emissions by 2050, including $3.1 billion dollars in developing economies.
One of the main obstacles that geothermal energy presents is the obtaining process itself: drilling. So far, drilling accounts for up to 75% of the project cost.
However, great innovations are emerging, combining drilling with robotics and sensing technologies, making it easier, more efficient and faster. Another sector full of opportunities: technologies linked to geothermal energy, key to propel the sector and very profitable for investors.
A large emerging market that needs capital and offers very interesting investment opportunities. However, you must be critical and really bet on projects that are not a fad, but rather, provide value, profitability and are truly capable of transforming the world. And that, without the help of professionals with talent, experience and knowledge of such complex sectors, is not feasible.
El hidrógeno que vino del mar
Geothermal hydrogen will not be the only advance we will see in this field. In fact, recently in China, scientists from Shenzhen University and the Dongfang Electric Innovation Institute have discovered a way to produce hydrogen thanks to the oceans.
It is not a new method, since it has been tried on other occasions, but what is truly innovative is that wind energy has been used in the process and they do not need to do prior desalination to produce electrolysis. In tests, energy consumption reached 5kWh/Nm³ and produced high purity hydrogen (>99.9%), allowing comparison with traditional water electrolysis.
However, this type of hydrogen has its own challenges to face, such as the undersea cables needed to transport the energy to the electrical grid. A challenge that, once again, will require technological developments, innovation and capital to carry it out.
The decarbonization of the economy is not only a necessity in order to have a more sustainable society and reduce carbon dioxide emissions, but it is also a great opportunity for economic growth. Both public and private investors must commit to innovation and work together to promote new sources of energy by land, sea and air.
